What if real estate could be as dynamic and accessible as trading stocks or cryptocurrencies?
Imagine a world where owning, managing, or even repurposing buildings happens seamlessly through digital platforms, powered by blockchain and the tokenization of real-world assets (RWAs).
This isn’t a distant dream—it’s a revolution already underway, transforming one of the most traditional industries into a tech-powered ecosystem of transparency, efficiency, and limitless opportunities.
Leading this charge is Matthieu Merchadou, the visionary CEO of Magma, who has redefined how we think about real estate with his groundbreaking Digital Twin Tokens (DTT®). In our exclusive interview, Merchadou shared his journey from finance and real estate into the blockchain space, the inspiration behind Magma, and the transformative power of tokenization.
Could you share a bit about your journey from finance and real estate into the blockchain and the real world asset industry? What inspired this shift?
Transitioning to real-world assets was a natural step for me because I learned early on about both the financial and technological aspects. I started my career as a stockbroker trading Nasdaq securities in 1998, following my law studies. I earned my Series 37 license on the New York Stock Exchange and traded Nasdaq securities.
This role gave me exposure to the financial and technological worlds simultaneously. I worked in this capacity for about three years until the bank I was with was acquired by UBS, the Union Bank of Switzerland, in 2000. I then shifted to Paris to work with UBS as they were opening a new office. They offered me a position as a financial advisor, and I began working closely with their real estate department, focusing on real estate investments for their clients. That marked the start of my career in real estate.
After two years with the bank, I decided to pursue independence. I left UBS with the director of the real estate department, and together we founded Meridian Invest in 2003. This was my company for over 10 years, during which we redeveloped properties for high-net-worth individuals and small institutions. Essentially, we purchased real estate assets and repurposed them. For example, we would buy office spaces overlooking Parisian monuments, redevelop them into residential apartments, and sell these to high-net-worth individuals. We also worked on commercial real estate projects.
During those years, I gained a deep understanding of the real estate process—from sourcing deals, securing financing, and managing building renovations to obtaining permits and commercializing assets. This included finding new buyers or tenants. My financial background complemented my expertise in real estate, providing me with a comprehensive understanding of the field.
In 2013, I decided to return to Miami. I created a fund and acquired three buildings, which we redeveloped. By 2016, I transitioned to where I am now. My journey into blockchain started that year. Blockchain technology was gaining traction in the US, and a friend of mine who was mining Bitcoin at a high level introduced me to the concept. Initially, I didn’t understand it and thought it was crazy. However, after further research, I realized how transformative this technology could be, particularly for the real estate sector.
Around that time, I worked with a property owner who had purchased 40 adjacent buildings in downtown Miami, spanning a million square feet. We developed a good rapport, and he asked me to help redevelop his portfolio and create a transformative project for the city of Miami. Back in 2016, Miami was very different, and we conceived a project called "Miami Beta City." This initiative aimed to create a new digital infrastructure for the city’s downtown, incorporating blockchain technology and a 3D model of the assets to link stakeholders in a digital ecosystem.
We spent a year developing the project and creating a 3D digital model of the 40 buildings. When we presented the project to the city, they found it highly innovative, even though it was considered futuristic at the time. In 2018, the city awarded us the Keys to Miami for this effort. This project became the foundation for what I’m doing now with Magma. Magma enables building owners to create 3D digital models of their properties, which are recorded as digital assets on the blockchain.
What advice would you give to individuals who are just starting their journey in blockchain, especially if they come from a finance or real estate background?
First, you need to have an open mind. You must be able to think outside of the existing model—outside the box. Blockchain is a transformative technology that reshapes business models and how we interact with objects and assets. It is inherently collaborative.
For those new to blockchain technology, my advice is to start by educating yourself. Listen to podcasts, explore online resources, and gather as much information as possible. Begin with a small project to gain hands-on experience. If you’re in real estate, for instance, consider tokenizing a building or studying what others in the field are doing and replicating their approaches. Blockchain adoption is inevitable, and understanding it early will position you for success.
What was the initial vision behind founding Magma, and how has that vision evolved as DTT technology developed?
The initial vision began as a personal journey when I was working in real estate in a way that felt very repetitive. I was buying assets, transforming them, and selling them, but each time, I experienced a sense of emptiness. Every sale required starting over from scratch, and it felt like I wasn’t leaving anything lasting behind. It was frustrating because, while I was redeveloping buildings and making them new, it wasn’t deeply fulfilling on a human level.
I also realized that the world was changing—we were entering a new era where "business as usual" would no longer suffice. We couldn’t just patch things up to continue as before because the systems we relied on weren’t functioning as they should. This realization set me on a transformational journey, prompting me to engage with the city of Miami to explore the future and how industries, especially real estate, were going to evolve.
As I delved deeper, I realized the future would require embracing perpetual change. To thrive, we need to be agile and capable of making informed decisions quickly. This agility depends on digitization. Digitization allows us to know what we have, where it is, and what can be done with it. The world is already undergoing this transformation—paper-based contracts are being replaced by digital records, and everything we do is now documented digitally. This is becoming the foundation of modern contracts and processes.
With this understanding, I decided to contribute to the digital transformation of cities. I worked with the city of Miami on the "Miami Beta City" project and became the co-chair of innovation for the Miami-Dade Beacon Council, which is the economic development partnership of Miami. I also engaged with universities to understand new curriculums and the perspectives of students, who are digital natives. This new generation sees the world differently from older generations, and their approach inspired me.
What truly motivates me is this ongoing transformation of the world. I wanted to create a tool that could serve future generations, something that could be used to develop new ways of conducting business in real estate. My goal was to establish new methods for assessing, transferring, and creating trust in real estate assets. That desire to leave something meaningful and transformative behind is what ultimately drove my decisions.
Could you explain how Digital Twin Tokens (DTT®) work, and what differentiates them from other blockchain applications in real estate?
The term "digital twin tokens" hasn’t been widely used because we coined it in Europe. When I realized digital twins would play a significant role in the future, I saw the tokenization of these digital twins as a natural evolution. But what exactly is a digital twin?
A digital twin is a digital representation of something, typically an asset of value. This asset could be a car, a building, a diamond—essentially anything valuable. The representation can be created using a data room, which includes all relevant information such as the title of ownership, invoices, and product specifications. It can also include a 3D representation of the asset.
For us, a digital twin is a combination of the building's data room—which contains all the information describing the building, such as the title, lease agreements, rental details, and other relevant documents—and a digital 3D representation of the building and its components. We believe this concept will form the foundation of future real estate management. Every building or real estate asset will have a digital representation that follows it throughout its lifecycle.
This approach eliminates data loss. Typically, when a building changes ownership, the new owner must recreate a new set of information, which is a repetitive and costly process over the building's lifecycle. By transferring digital information seamlessly, we can save time, resources, and create digital value. This digital value can even be monetized.
In our digital twin model, we’ve identified the stakeholders who can interact with it. These include the building’s owner, asset manager, property manager, tenants, service providers, observers, and financial institutions. All these personas can interact with the digital twin by uploading or requesting information as needed.
Can you share examples of how DTT® technology is currently being used in Magma’s projects, especially in Europe, the USA, or the GCC?
Just to wrap up the concept of the digital twin token (DTT), I’ve explained the digital twin itself. The token, however, represents any information that has been validated by the stakeholders. While digital twins will be widely used, there’s currently no guarantee that what you see digitally aligns with the real-world asset. To address this, we’ve developed a protocol for validating information among stakeholders.
For example, if an architect makes updates to a building, this information can be validated by the property manager or tenant. Once validated, it becomes part of the token. The token can then be shared with other stakeholders who need access to that information. This is essentially what the digital twin token represents.
At Magma, we’ve structured the architecture of the digital twin token into five indexed layers, each corresponding to specific elements of a building. These layers help isolate the stakeholders responsible for particular data and ensure compliance with relevant regulations and rules. The layers include:
Currently, we’ve developed the genesis level, which manages the data room. We’ve delivered a prototype in Paris that is fully functional for recording and validating documents as part of a digital asset. This system allows users to track the state of documents, including when they were issued and if updates are required.
Our next step is integrating a 3D viewer into Magma. This will allow users to navigate a 3D model of the building and attach specific objects to it. For example, the structural level will display the building’s foundational elements, the architectural level will include doors and walls, and the wired level will show equipment and furniture. We are gradually integrating these layers, starting with the data room functionality.
Additionally, we are signing agreements with real estate companies for future software integrations. For instance, once the DTT is implemented and devices are installed in a building, it becomes possible to monitor various parameters, such as temperature, and act on energy performance.
We are also partnering with one of Europe’s largest digital twin companies to deploy suites focused on energy performance, CO2 emissions, waste management, and predictive maintenance. These partnerships are in place, and we are actively working with real estate companies to adopt and deploy these solutions.
As for formal partnerships, yes, we’ve already signed several agreements. However, we are waiting to announce them strategically. We aim to maintain a consistent flow of information as we prepare to launch our utility token. Over the coming months, we’ll share details about these significant partnerships, including technological collaborations, platform integrations, and real estate companies adopting our solutions.
What do you see as the greatest opportunities and challenges for tokenizing real estate assets in today’s market?
The opportunity right now clearly lies in the digitization of the real estate space. As I mentioned earlier, we are witnessing a period where industries are undergoing a digital transformation, and real estate is no exception.
This shift is also driven by market conditions. Over the past four to five years, both in Europe and the US, the real estate market has changed significantly. We’ve seen rising interest rates, increased vacancies in buildings—particularly commercial properties due to COVID and the rise of remote work—and a need to reposition assets. For example, some empty office spaces are being converted into residential properties.
Additionally, stringent regulations regarding energy performance and CO2 emissions have been introduced in many countries. These regulations mandate reporting on energy usage and emission reductions, further emphasizing the need for digitization. To repurpose or optimize the use of a building, agility and detailed knowledge of the asset are essential, which can only be achieved through digital tools.
Real estate, however, has been slow to adopt digitization. It is often seen as a "dinosaur" industry in this regard. In terms of digital progress, it’s almost as if we’re just moving past the era of "fishing and hunting." That’s why this transformation is both necessary and inevitable. This presents a clear opportunity for Magma, as we aim to play a pivotal role in driving this change.
The market is also being shaped by emerging technologies such as urban tech and proptech, which include tools like image scanning, photogrammetry, and video documentation of properties. These tools allow us to create digital assets by compiling and organizing digital files, photographs, and videos.
Despite these opportunities, challenges remain. Real estate is slow to adapt, partly due to generational gaps. Many players in the industry belong to older generations, who have not felt an urgent need to change their traditional ways of working. The attitude has often been, "My business is functioning well as it is, so why change?" However, with younger, tech-savvy generations like Gen Z entering the market, the pressure for transformation is mounting. This generational shift, combined with market demands, is gradually overcoming the resistance to change.
In what ways does DTT® support the monetization of real estate assets, and how does it make real estate investment more accessible or liquid?
Monetization begins with the creation of a Digital Twin Token (DTT), which generates digital value by consolidating all validated information into a single digital asset. This digital asset, the DTT, can be transferred to the next buyer. When purchasing a property, you don’t just acquire the physical asset—you also gain access to all the associated data.
This is valuable because it ensures no data is lost, providing a clear and comprehensive understanding of the property. With this foundation, you can implement various smart contracts to optimize energy performance, reduce CO2 emissions, and enhance the recyclability of materials. Since you now have detailed knowledge of the materials used in a building, this information can be leveraged for further efficiencies.
At a larger scale, aggregating this data across districts or cities enables planning for retrofits or recycling initiatives for materials across multiple buildings. This aggregated data can also be sold, effectively transforming buildings into data banks. This approach unlocks a world of possibilities and new opportunities for value creation.
As Magma expands into Europe, the USA, and the GCC, what do you see as the biggest regional challenges and opportunities?
There are very few new construction projects in Europe right now due to current challenges such as high construction costs, strict regulations, unfavorable market conditions, limited buyers, and rising interest rates. As a result, our focus in Europe is on deploying tools to assess existing buildings. Deploying Magma in a building allows us to gather comprehensive information about it.
Many real estate companies and property owners don’t fully understand what they own. While they may know they own a building and its rental income, they often lack detailed knowledge about the equipment, materials, or condition of the assets. In Europe, Magma is primarily used for assessing properties and providing this crucial insight.
In contrast, markets like Dubai and Miami are experiencing a different scenario, as the construction sector remains very active. There is a significant amount of new construction, as well as numerous existing high-rises. In these regions, we deploy Magma not only to assess assets but also to optimize building performance.
The challenge with many of these buildings lies in data management. With so many parties interacting with a building, the data is often outdated. Energy performance is difficult to control, and many buildings require retrofits because they were constructed at the same time and now need upgrades.
This situation presents an opportunity to create liquidity by leveraging blockchain technology and crypto asset pools. Owners of cryptocurrencies could contribute to liquidity pools that fund retrofits in cities like Miami or Dubai. Tools like the Digital Twin Token (DTT) ensure transparency in how these funds are spent. With DTT, stakeholders can be confident there is no greenwashing; they can track where the money is going and ensure commitments are being fulfilled.
In the future, money will become programmable, and this programmability has the potential to revolutionize sectors like real estate. In regions that are already promoting digital assets, this is a significant opportunity to transform the market using advanced digital tools.
You’ve been an advocate for blockchain-driven innovation in real estate—what trends or changes do you anticipate in the industry over the next 5 to 10 years?
First of all, I see tokenization as one of the biggest topics of this century. It’s not just my view—you can hear the same sentiment from companies like BlackRock and Narithink, which believe that tokenization represents the next major financial cycle. It’s essentially the new form of asset securitization. A good example is what’s happening with treasury bills.
Right now, treasury bills are among the first assets being tokenized. Why? Because they are highly liquid and easy to collateralize. They’re not necessarily replacing anything, but they are being utilized as a stablecoin equivalent for investment purposes. You can use them as collateral, and they provide a reliable financial tool in the tokenized space.
I foresee the tokenization of treasury bills, the growing use of stablecoins, and the emergence of CBDCs (Central Bank Digital Currencies) as key trends. The entire financial sector is slowly transitioning toward tokenization and blockchain. As this transition occurs, the money flowing through tokenized assets will naturally start to impact other industries.
For real estate, I believe tokenization represents the next wave following the financial instruments. Real estate, being the largest asset class in the world—valued at $300 trillion—has enormous potential for tokenization. Even if just 1% of real estate is tokenized, that would amount to $3 trillion, which is already equivalent to the total value of the crypto asset class today. Now imagine if 10% of real estate were to be tokenized—the possibilities are immense.