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MAG Group Holding, a player in the United Arab Emirates’s property development scene, tapped layer-1 blockchain Mantra to tokenize $500 million worth of Dubai-based real estate assets, the companies said in a July 3 joint statement.

The initial phase of this tokenization project will start with MAG Group’s residential properties Keturah Reserve in Meydan, Dubai and Keturah Resort in Dubai Creekside, in which assets will be accessed through a vault on the Mantra Chain, the announcement said.

The vault is over-collateralized by a $75 million mega-mansion at The Ritz-Carlton Residences, Dubai, Creekside development, part of the Keturah Resort, and backed by MAG’s corporate credit.

Investors participating in the vault will receive yields in both stablecoins and Mantra’s OM tokens. Stablecoin yields are projected at approximately 8% APY, with the potential for additional returns through OM token rewards.

MAG and Mantra are reportedly finalizing the details regarding the specific stablecoin to be used and the amount of OM tokens to be allocated for yield generation.

Mantra (OM) saw slight volatility on the back of the news, trading at 85 cents and down to over 70 cents before climbing back to the 80-cent mark, per CoinGecko data. 

Tokenizing RWAs

The tokenization of real-world assets (RWAs), utilizing cryptocurrency and blockchain technology, is gaining traction within the crypto industry and finding support in some traditional sectors. In a June report, McKinsey suggests the market for tokenized assets could reach $4 trillion by 2030 under optimistic conditions.

The Boston Consulting Group, meanwhile, projects the value to hit $16 trillion by the same period.

The slowly but growing appetite for tokenizing RWAs brought Mantra to the Middle East to explore opportunities there. On March 19, the company announced closing an $11 million investment round spearheaded by Shorooq Partners, an Abu Dhabi-based venture capital firm.

Other major players have also ventured into the region to bring traditional finance assets on chain. Coinbase in December last year launched Project Diamond to issue and trade digital debt instruments using its Ethereym layer-2 Base.