Lumia has partnered with Polygon Labs to establish the world’s inaugural crypto real estate initiative, Lumia Towers. Following this announcement, we had a chance to engage in a Q&A with Boris Spremo, Head of Enterprise and Financial Services at Polygon Labs, and Lumia CEO Kal Ali.
Covering over 50,000 square meters in Istanbul, Turkey’s largest city, this ambitious $220 million development is slated to feature 300 residential and commercial units, positioning itself as a potential global crypto center. Lumia CEO Kal Ali noted that the twin skyscrapers are expected to be completed and fully tokenized by the second quarter of 2026.
Ali stated that Lumia Towers represents a significant advancement in how individuals perceive property ownership. By leveraging a tokenization model, they aim to enhance accessibility and streamline the real estate market for retail investors.
According to recent data, the market for tokenized real-world assets currently stands at approximately $187 billion. Projections suggest this figure could soar to anywhere between $3.5 trillion and $10 trillion by 2030, indicating a potential 50-fold increase. This rapid growth is largely propelled by efforts to fractionalize high-value assets via blockchain technology, enabling investors to acquire shares in both commercial and residential properties through tokens.
Yet, despite the potential for democratizing real estate investment, various challenges remain, including regulatory hurdles, market liquidity concerns, and the technological integration of physical assets with digital tokens, all of which could pose risks in the future.
For instance, the actual liquidity of tokenized real estate remains contingent on the establishment of active secondary markets. Without significant trading volume, investors may encounter difficulties in buying or selling real estate ownership tokens, thus limiting the expected liquidity advantages. As of now, the Lumia team has not addressed how these challenges might be resolved.
Previously, other tokenization efforts have focused on existing structures. In the U.S., Tokeninvest tokenized a $740,000 property in Longmont, Colorado, enabling third-party investors to provide 97% of the purchase capital directly.
In contrast to earlier initiatives, Lumia Towers will represent the first large-scale real estate endeavor created by a web3 company.
Boris Spremo from Polygon Labs remarked that real estate has always been a sector with “sky-high” barriers to entry.
In Turkey, where Lumia Towers will be situated, real estate prices have consistently risen. Analysts have forecasted an increase in property values by 10% to 15%. Additionally, there is considerable demand from real estate investors in the area. In January 2025, house sales surged by 39.7%, reaching 112,173 units—marking the second-highest figure for January on record. Mortgage-backed sales also saw a significant increase of 182.8% from the previous year.
Spremo is optimistic that this project will enhance affordability in property ownership, as RWA tokenization can convert physical assets into fractional ownership opportunities starting from as low as $1. However, the final cost of each unit will still depend on ongoing regional property pricing trends, which have shown little indication of decline recently.
How will ownership rights be allocated via blockchain?
Ali explained that ownership rights for the tokenized twin skyscrapers will be organized through Special Purpose Vehicles (SPVs), which will acquire the tokenized property. Shares of these SPVs will be minted on-chain as ERC-20 tokens.
“Token holders will possess governance rights, enabling them to vote on key decisions about the property, including whether to rent or sell,” stated Ali.
He added that Lumia Towers tokens will be launched on the Lumia Chain, providing easier access for retail investors. These tokens will also interact with DeFi protocols through the Lumia Stream and the Lumia Ecosystem.
During the tokenization process, Polygon’s role is to ensure that developers like Lumia can tailor their blockchain for this particular application. Spremo elaborated on how Polygon successfully minimizes the cost of tokenizing ownership for a $220 million development without sacrificing security.
“Polygon’s infrastructure is specifically designed to handle high-value applications where Ethereum alone may be prohibitively expensive or slow. When fractionalizing ownership for a $220 million real estate project, exorbitant transaction fees and prolonged confirmation times are unacceptable,” remarked Spremo.
The prospects and pitfalls of real estate tokenization
Looking ahead, Lumia CEO Kal Ali expressed aspirations to replicate the Lumia Towers model in regions beyond Turkey, particularly in the Middle East, North Africa, the United States, and Europe.
“Our expansion roadmap aims to introduce innovative tokenized real estate to a worldwide audience, facilitating a transformation in real estate investment and ownership,” stated Ali.
Boris Spremo anticipates three major trends will emerge in RWA tokenization going forward.
“The first involves the tokenization of entire neighborhoods or districts rather than just individual buildings, fostering community governance and aligning investor and resident incentives,” Spremo noted.
Secondly, he believes that real estate tokenization will increasingly integrate with other financial products, such as mortgages and insurance. This would allow developers to directly link blockchain technology with tokenized properties.
Finally, he envisions this technology serving as a pathway for traditional financial institutions, like banks and investment funds, to engage with the web3 space.
While Spremo is hopeful that real estate tokenization can “lower barriers” for aspiring investors, numerous potential challenges loom over such projects. These include vulnerabilities related to smart contracts and technology, as well as the risk of overvaluation stemming from speculative trading. As is typical with tokens, prices could fluctuate significantly in response to market activity.
Moreover, the tokenization of real estate does not eliminate traditional risks associated with real estate investments, such as management issues, tenant turnover, and maintenance expenses.
Recently, a Florida-based crypto real estate firm, RealT, introduced a real estate tokenization initiative that they claimed would “transform real estate investment,” targeting around 1,200 housing units across 800 properties in Detroit.
Sadly, this project encountered severe difficulties for tenants, who struggled with the blockchain ownership model as they had no clear entity to pay rent, given that the properties were owned by numerous anonymous token holders worldwide, identified only by a series of numbers and letters in the blockchain.
As reported, RealT’s real estate division in Michigan reportedly owes the city of Detroit at least $2 million in back taxes and has 1,000 blight tickets pending. Furthermore, the firm has around 200 properties facing potential closure due to unpaid debts. However, a spokesperson for RealT has refuted these claims, asserting that the real estate acquisition companies operate independently from the firm.