Tokenisation is moving steadily into real estate, equities, music and other real-world assets, but for Brian J. Esposito and Tyler Vinson, the more important question is no longer simply whether an asset can be tokenised. It is whether the underlying asset is worth owning in the first place.
Esposito, CEO of DiamondLake, a public company based out of Salt Lake City Utah since 1954 trading under the symbol DLMI, approaches tokenisation across a range of real-world assets and intellectual property, while Vinson, co founder & CEO, REtokens, works directly with tokenised real estate. The two also have business agreements in place, giving them overlapping but different perspectives on where the market currently stands.
Exact Mirror
For Vinson, tokenisation of real estate should not fundamentally change what an investor owns. He describes it as the “exact mirror” of the position an investor would have in a traditional real-estate syndication, typically structured through an LLC or special purpose vehicle rather than by attempting to put the property deed itself on-chain.
The investor can still participate in the cash flow and equity of the underlying property, but tokenisation can make that ownership more mobile and potentially easier to trade or use in other financial structures in the future.
“The pathway to liquidity is available,” Vinson says, pointing to one of the more obvious attractions for an asset class in which investors have traditionally had relatively few ways to exit before the underlying property is sold or refinanced.
For buyers, he sees access as equally important. An investor who might previously have put $100,000 into one private property deal could potentially spread that capital across several investments with different cash-flow, equity or tax characteristics. Tokenisation, in his view, gives both sides greater access: owners to their equity and investors to deals that have historically been difficult to enter.
Proceed with Caution
Esposito is noticeably more cautious when it comes to tokenising public equity. Diamond Lake received approval around two years ago to tokenise its public shares, but he chose not to activate it.
He acknowledges the potential advantages, including immediate settlement, fractional ownership and round-the-clock trading, but says: “I don’t really love the idea of a tokenized equity besides a buzzword. I don’t really see the benefit of it in today’s market.”
His interest instead lies at the asset and subsidiary level, where tokenisation can be attached to businesses and assets with genuine operations, management and revenues behind them. He also remains cautious about the developing US legal environment and says there is little value in rushing simply to be first.
“We’re not in any hurry to do anything wrong,” he says. “The key to this whole thing is bringing great assets to the market.”
That principle also informs his interest in music and intellectual property.
Esposito sees music catalogues as particularly suited to tokenisation because they combine existing IP, revenues and an established relationship between creators and their audiences. He believes tokenisation could give independent musicians another mechanism for financing their careers while allowing fans to participate more closely in the journey, whether an artist has ten followers or 10,000.
For established artists, he sees another potential liquidity opportunity, while blockchain could also provide greater accountability around where music is played and consumed and how its value is recorded.
But what is the Asset?
But both men’s comments ultimately return to the asset beneath the technology.
Vinson’s real-estate model is designed to mirror an existing investment rather than invent a new one, while Esposito argues that secondary-market liquidity will not emerge simply because something has been tokenised.
When poor assets are put into the market and fail to attract liquidity, he says, sometimes the explanation is straightforward: “It’s garbage.”
His preferred model starts instead with assets that are earning, have strong balance sheets and may eventually even be sufficiently robust to support borrowing by token holders against their holdings.
For an industry that has spent years talking about what can be put on-chain, that may be a useful marker of where tokenisation is now heading. The technology and infrastructure matter, as do regulation, settlement and liquidity, but Esposito’s test is considerably simpler.
Bring good assets to market first – then decide whether tokenising them makes them more useful.
