From Theory to Practice: Introducing the RWA DeFi Demo Platform

By Nadine Loepfe

REITs in Web3

Part 8 of our Web3 Real Estate Series

Part 1: How Would We Build a REIT Today Using Web3 Technologies?
Part 2: How Is Tokenization Changing The Way We Invest?
Part 3: How Can We Model a Building in Web3?
Part 4: How Can We Model a Building in Web3? (Continued)
Part 5: Reimagining REIT Cashflows: Managing Revenue and Expenses in Web3
Part 6: Governance & Jurisdiction in Tokenized Real Estate
Part 7: Slices: Building The Web3 Real Estate Index Fund
Part 8: From Theory to Practice: Introducing the RWA DeFi Demo Platform

REITs in Web3: Part 8

From Theory to Practice: Introducing the RWA DeFi Demo Platform

Throughout this series, we have explored how a tokenized Real Estate Investment Trust (REIT) can work in the real world, not just on paper. In parallel, we have been building the rails to make it possible, continuing to advance the development of Hedera Asset Tokenization Studio, with the recent integration of the ERC-3643/T-REX token standard to expand Hedera’s tokenization toolkit and support more compliance-aware issuance and management flows. You can read more about the ERC-3643/T-REX integration here.

We have examined how Web3 technologies could reshape real estate investment in practical terms: rethinking REIT structures, designing automated cash flow systems, modeling buildings on-chain, and creating diversified investment vehicles like Slices, our Web3 index fund. Along the way, we have dug into governance frameworks, compliance considerations, and the mechanics of tokenization itself.

However, there’s always been a gap between understanding the concepts and seeing them run. It is one thing to read about smart contract–mediated revenue distribution. It is another to watch rent hit the treasury and flow automatically to token holders. It is one thing to grasp the theory of fractional ownership, but how does an investor actually browse properties, make a purchase, and start earning yield?

Today, we bridge that gap. Welcome to the RWA DeFi Demo, a working reference platform that turns the ideas from this series into something you can actually use, powered by Tokeny’s ERC-3643 standard and Hedera Asset Tokenization Studio.

Why build a working demo?

The path from whitepaper to implementation is littered with obstacles. When we started this series, we knew that explaining tokenized real estate in writing was only half the story. Developers need to see working code. Enterprises need to understand integration requirements. Investors need to experience the user journey firsthand.

The RWA DeFi Demo is not a simplified prototype or a proof-of-concept with placeholder functionality. It is a reference architecture that demonstrates how to build a complete tokenized asset platform on Hedera. Almost every feature we have covered in this series is implemented end-to-end, from token creation to vaults, from auto-compounders to slices, and are ready to use — DAO governance will be coming soon!

Think of it as the GitHub repository that comes with the textbook. The blogs explain the “why” and the “what.” The demo shows the “how.”

More than just tokenization

When most people think about asset tokenization, they focus on the moment a property becomes a token. That is the starting point, but it’s far from the full picture. The RWA DeFi Demo builds the ecosystem around that token, including the infrastructure required to make tokenized real estate work as a real investment vehicle.

Let’s walk through what that means in practice.

The token architecture

Each property in the demo is represented by multiple token types, each with a clear role.

Building Tokens are ERC-3643 tokens created with Hedera Asset Tokenization Studio. They represent fractional ownership in a specific property. When you invest in a building, these are the tokens you receive, and they map directly to your proportional exposure to that building’s performance.

But ownership alone does not generate yield. That’s where Vault Tokens, or vTokens, come in. When you deposit Building Tokens into a property vault, you receive vTokens in return. These represent your staking position and define how revenue flows to you. As rent is collected, expenses are paid, and surplus is distributed, vToken holders receive their proportional allocation.

For investors who want optimization without constant manual intervention, there are Auto-Compounding Tokens, or aTokens. They work similarly to vTokens, but instead of receiving distributions that you manually reinvest, the yield is automatically compounded back into your position. Your stake grows continuously without any action on your part.

Finally, there are Slice Tokens, which represent diversified portfolios that automatically allocate capital across multiple properties based on predefined strategies. A conservative slice might lean toward stable, cash-flowing assets, while a growth-focused slice might prioritize appreciation potential. The slice re-balances to maintain target weights as property values and allocations change.

How money actually moves

One of the biggest challenges in traditional real estate is tracking cash flows. Where did the rent go? What were the expenses? How much profit is available for distribution? In most REITs, you’re waiting for quarterly reporting and trusting that the ledger is being kept correctly.

Our Web3 REIT flips that model entirely. Every building has its own treasury, an on-chain smart contract that receives revenue and manages expenses with full transparency. Let’s trace what happens when a tenant pays rent.

Rent arrives as USDC directly into the building treasury. Before anything gets distributed, the system deducts approved operational expenses automatically. That can include property management fees, insurance, maintenance, or utilities. Each expense is authorized through governance, or via multisig approval for routine items under a defined threshold.

Once expenses are settled, the remaining surplus flows into the building’s vault. This is where the magic of smart contracts really shines. The vault calculates each token holder’s proportional share based on their staked position and updates their claimable balance immediately. There’s no waiting for quarterly distributions, no reconciliation of who owns what. The math happens automatically, transparently, and instantly.

For vToken holders, yield accrues and is available to claim at any time. For aToken holders, yield is automatically reinvested to grow their position. Compounding happens at the smart contract level, with no manual steps and no friction from repeated reinvestment transactions.

The platform experience

Now, let’s walk you through what it’s actually like to use the RWA DeFi Demo.

You start by connecting your wallet using either HashPack or MetaMask. The platform supports both, so you can use whichever you’re already comfortable with. Once connected, you land in a portfolio-style view where you can browse available properties.

Each building has its own dedicated page with the details that usually get buried in paperwork. You can review historical performance data, occupancy, rental income trends, and expense breakdowns. The key difference is that the financials are not locked away in PDFs. They are presented as interactive charts driven by on-chain data, so you can see what revenue came in, what was paid out, and what yield was distributed to token holders.

When you are ready to invest, you choose how much you want to contribute. Minimums are designed for real fractional ownership, not the five-figure entry tickets that are common in traditional real estate funds. You receive Building Tokens immediately, then you choose how you want to manage yield.

If you want hands-on control, you stake Building Tokens into the property vault and receive vTokens. Your claimable yield updates as the building generates income. You can claim when you want, or let it accumulate.

If you prefer a passive approach, you choose the auto-compounder. Your tokens go into the vault, you receive aTokens, and yield is compounded back into your position automatically.

If you want diversification without managing individual allocations, you can create or join a Slice. You set target weights — for example, 40% in Property A, 35% in Property B, and 25% in Property C — and the Slice handles allocation and rebalancing as values and balances change.

For developers: open-source and ready to build

Everything described above is open-source. The smart contracts, the frontend code, the integration patterns — it’s all available on GitHub for you to explore, fork, and adapt.

The RWA DeFi Demo follows modern best practices. The frontend is Next.js 15 with TypeScript for type safety, TailwindCSS for responsive design, and Viem for blockchain interactions. The smart contracts implement established standards like ERC-3643, ERC-721, and ERC-4626, with additional compliance layers where needed for regulatory requirements.

The architecture is modular by design. Buildings are separate contracts, vaults are independent, and governance is decoupled. That makes it easy to reuse parts without rewriting the whole system. You can swap governance rules, reuse the vault mechanics, or adapt Slice logic to a different asset type without starting from scratch.

While the demo is built around real estate, the underlying patterns translate directly to other asset classes: commodities, equipment, art, revenue-generating businesses. The vault logic still manages inflows and distributions, governance still handles decisions, and compliance still enforces constraints. What changes is the asset model, not the architecture.

Experience it yourself

This series has never been about theory alone. We have walked from first principles to implementation. Now you can interact with the system directly.

If you are an investor curious about tokenized real estate or any real-world assets more broadly, the RWA DeFi Demo offers a risk-free environment to explore how it works. Connect a wallet, browse properties, simulate investments, and see vaults, auto-compounders, and Slices operate in practice. You are using real transactions on Hedera testnet, without real capital at risk.

If you are a developer building tokenization platforms, the open-source repositories are a complete reference implementation. Study the smart contracts to understand vault mechanics and distribution logic. Review the frontend code to see how we handle wallet connections and blockchain state management. Fork the repos and adapt them to your use case. The codebase is designed to be modular and readable, and contributions are welcome.

If you are an enterprise exploring asset tokenization, the demo showcases what is possible with today’s technology. Use it to evaluate technical feasibility, demonstrate concepts to stakeholders, or jumpstart your own development process.

We have shown you how real estate investment can work in Web3. Now you can see it working today, on Hedera.

Explore the RWA DeFi Demo

Demo Platform: https://rwa-defi-demo.hashgraph.com/
Demo Video: https://youtu.be/Sj4-m7FxAUU
Frontend Repository: https://github.com/hashgraph/hedera-accelerator-rwa-defi-fe
Smart Contracts: https://github.com/hashgraph/hedera-accelerator-rwa-defi-be
Asset Tokenization Studio: https://hedera.com/asset-tokenization-studio
Join the Community: https://discord.com/invite/hederahashgraph

From Theory to Practice: Introducing the RWA DeFi Demo Platform was originally published in Hedera Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.