Fraktion Gains Momentum, Raises $1.1M to Boost Tokenized Investments

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The Tezos-based tokenization platform Fraktion is advancing the idea of fractional ownership for high-value assets like real estate and precious stones after securing $1.1 million in seed funding. 

This funding round includes contributions from strategic investors such as Cabrit Capital and the Tezos Foundation, along with Vox Capital and several angel investors. 

Fraktion is developing a platform designed to simplify the tokenization of assets, allowing them to be divided and sold as digital tokens on the blockchain. This approach aims to make financial markets more accessible, liquid, and transparent, especially for retail investors who are often excluded due to the high capital requirements. 

For example, investing in real estate typically requires purchasing an entire property, which involves substantial funds or long-term mortgages, making it inaccessible for many retail investors. 

Tokenization offers a new approach by creating digital tokens on the blockchain, each representing a small share in a luxury property like a rental home or resort. This allows retail investors to own a fraction of the property. A property valued at $1 million could be divided into 100,000 tokens, each representing a 1/100,000th share, drastically lowering the investment threshold. These tokens can be traded in a decentralized fashion, with transactions completed in seconds, removing the extensive paperwork typically associated with such deals. This innovation enhances liquidity in the real estate sector, where transactions usually take weeks to finalize. 

“By offering a platform for secure tokenization and investment management while ensuring regulatory compliance, Fraktion is fulfilling one of blockchain technology's early promises, democratizing investment in tangible assets,” said Jean-Frédéric Mognetti of the Tezos Foundation.

Fraktion has built its tokenization platform on the fast and cost-effective Tezos blockchain, launching in mid-2023. With the new funding, the platform aims to broaden its capabilities to support the development of private, decentralized financial markets. 

The platform has already achieved some success, such as hosting a private network for French real estate investors known as “Kapi Club,” enabling members to own shares in high-value projects. Lauren Dannay, CEO of Kapi Club, mentioned that Fraktion facilitated the launch of their compliant investment platform with full KYC/AML within days. 

"Fraktion has allowed us to advance significantly in structuring our investment projects,” she stated. “Their platform offers a modern and efficient solution that meets investors' growing demands for simplicity, transparency, and performance.” 

Fraktion's leading white-label platform is versatile, applicable beyond real estate to areas like tokenizing precious stones, fine wine, luxury art, and more. Additionally, it has developed a crowdfunding platform for entrepreneurs to create and sell tokens to raise capital for their initiatives. 

With its financial resources now bolstered, Fraktion is positioned to pursue key initiatives to expand the concept of fractional, tokenized investing, thereby increasing capital and liquidity within its efficient, decentralized financial markets. 

Fraktion's initial plans include scaling the commercial rollout of its platform, targeting private market companies seeking efficient asset tokenization methods. It also aims to expand globally, focusing on markets in Europe and Asia. Furthermore, the company is exploring ways to integrate traditional finance with decentralized finance, featuring collateralization support and tools for compounding interest.

Fraktion CEO Vincent Pastor envisions the company leading the charge in democratizing access to previously unreachable investments, a view shared by Cabrit Capital's Omar Khalouti.

“Tokenization will gain widespread acceptance through B2B channels, with companies like Fraktion enabling businesses to effortlessly structure tokenized offerings,” Khalouti said. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice