Market Problems

Traditional investments bring with them a number of serious problems for investors and beneficiaries. These problems prevent many sectors from being accessible to a wider audience of investors worldwide. Fexse’s goal is to eliminate these problems and create a more accessible, liquid and transparent system by digitizing real estate investments and creating new opportunities for investors. These problems can be summarized as follows:

• Large Capital Requirement: Traditional investments in real estate, artwork, precious metals (gold, silver), company shares, antiques, and energy facilities (such as dams) are often closed to most small investors due to the need for a large amount of capital. For example, the purchase of assets like an apartment, a piece of art, or a commercial property often requires hundreds of thousands of dollars. Similarly, investing in gold reserves, energy infrastructures, or rare antiques demands significant financial resources, creating a barrier for retail investors.

  This substantial capital requirement makes it nearly impossible for retail investors, aside from wealthy individuals and large investment firms, to take advantage of the opportunities these sectors offer. Moreover, investors are often restricted to generating income from physical assets through means such as rental income, property appreciation, or royalties, which are unavailable to small investors due to high costs and time constraints.

• Low Liquidity: Real estate, artwork, precious metals (gold, silver), company shares, antiques, and energy facilities (such as dams) are inherently illiquid asset classes. When retail investors wish to sell these assets, they often face complex transactions that can take several months or even longer. For example, selling a property, a piece of art, or an energy facility involves finding suitable buyers, completing legal processes, and obtaining necessary approvals or financing. This illiquidity makes it challenging for investors to meet immediate cash needs, resulting in their funds being locked up for extended periods.

• Lack of Transparency and Dependency on Centralized Intermediaries: Traditional investments in real estate, artwork, and other high-value assets often involve complex transaction processes and limited transparency, particularly concerning the true value of the asset. Investors must rely on centralized intermediaries or third parties to obtain information, verify ownership, or ensure accurate distribution of income (such as rental returns, royalties, or dividends). This reliance results in time delays, trust issues, and increased vulnerability to fraud or misinformation, leading investors to make suboptimal decisions.

• High Transaction Costs and Commissions: Investments in real estate, artwork, and other asset classes incur high transaction costs due to the involvement of brokerage firms, legal advisors, and compliance with tax regulations. For example, commissions ranging from 3-6% can be charged during property or artwork sales, alongside costs such as title deed registrations, appraisal fees, notary fees, and logistics. These costs significantly reduce profits, creating financial strain for both asset owners and investors.

To solve these problems, Fexse uses tokenization technology to provide faster, lower cost and aims to create a transparent system.