Dubai: Real estate will most likely be the first sector to widely adopt non-fungible tokens (NFTs) for real-world applications. That is according to an online survey conducted by Ali Sajwani, General Manager – Operations at Dubai’s DAMAC Properties.
The poll, which garnered 4,225 responses from Arabic and English-speaking Twitter users, saw almost a third of respondents tout the property sector as the most likely to capitalise on the potential physical applications of NFTs. Sports and entertainment ranked second (with 26 per cent), while the automotive and luxury goods industries placed third and fourth, securing 22 per cent and 21 per cent of the votes, respectively.
“While I don’t believe the property industry is ready to migrate to the metaverse en masse just yet, I think we are at the verge of a breakthrough,” said Sajwani. “My Twitter followers are right to identify the real estate sector as the first to combine digital and physical assets on a commercial scale.”
At present, NFTs, which perform a similar function to traditional certificates of authentication, are used in conjunction with digital assets. Due to their ‘non-fungible’ nature, they cannot be swapped for an equivalent token or tokens, meaning each NFT is unique.
In the last year, however, the number of uses for NFTs has grown significantly, with applications ranging from the ownership of digital assets and the protection of artists’ work to real-world activities. “Today, NFTs are most commonly tied to virtual art and collectables, but there are several examples wherein digital tokens have been deployed in tandem with physical assets,” said Sajwani.“One advantage for the property market is that royalties can be built into these tokens, meaning they have the potential to be used alongside Real Estate Regulatory Authority (RERA) title deeds, or for the automatic collection of levies such as the 4 per cent Dubai Land Department (DLD) fee, for example.”
“I have no doubt that traditional property deeds and mechanisms will continue to be used for many years to come, but I certainly see blockchain-enabled technology, such as NFTs, as the future of our industry.”