When talking about investing with TokenKey, it is essential to understand what their tokens represent from a financial point of view. Unlike other traditional investment models, TokenKey tokens are fixed income financial instruments backed by investments in real estate projects in the completion and sales phase. In a separate section, we will explain in a simple way what type of financial asset they are and how they work within the European regulatory framework.
What is a fixed income financial asset?
Fixed income financial assets are instruments that generate a pre-established return, that is, they offer an interest payment in a given period. Unlike equity assets (such as shares), where the return depends on the performance of the market, in fixed income the investor knows the conditions of the return from the beginning of the investment.
Common examples of fixed income assets include:
Government bonds (loans that governments issue to investors and repay with interest).
Corporate bonds (debt issued by companies to finance themselves).
TokenKey investment tokens (instruments that represent a fraction of the investment in real estate projects).
How do TokenKey tokens work?
Tokens issued by TokenKey represent a fraction of the investment in a property flipping project. They are not shares in a company nor do they represent direct ownership of a property, but rather a financial right to the return on the investment.
The process is as follows:
Selection of the project: TokenKey presents investment opportunities in property projects in the completion phase.
Issuance of tokens: Each project issues tokens that investors can acquire.
Use of capital: The money raised is used for the completion and sale of the properties.
Payment to investors: Upon completion of the sale of the project, investors receive their capital along with the interest generated within the agreed term.
Benefits of TokenKey tokens as fixed income assets
Predefined return: Investors know in advance how much they will receive at the end of the investment.
Clear business model: The capital is allocated to real estate projects in the completion phase, reducing execution risks.
Regulation and security: TokenKey, in collaboration with its partners, operates and complies with MiFID II regulations.
Accessibility: It allows investing in real estate with lower amounts than in traditional investment.
Differences with other types of financial assets
Characteristic | Tokens from TokenKey | Shares | Government bonds |
Profitability | Fixed | Variable | Fixed |
Regulation | Compliance with MIFID II | Depends on the market | Issued by governments |
Liquidity | Only in primary market* | Securities market | Bond market |
Ownership of assets | No | Yes | No |
(*) TokenKey is working on strategic alliances to facilitate a secondary market in the future.
Based on the explanation in the previous paragraphs, we can summarise that TokenKey tokens are fixed income financial assets, which means that they offer investors an established and predictable return within a real estate investment model. Thanks to the MiFID II regulation, investors can be confident in the security and transparency of their investment.
If you would like more information on how these tokens work and the opportunities available, check out our platform or contact our advisory team.