# Fractionalizing

When a real-world asset is **tokenized**, it is immediately broken down into **security tokens**, with each token representing a **fraction** of ownership in the asset. These security tokens are digital representations of the asset's equity, allowing the asset to be **divided** into smaller, more tradable units.

For example, imagine a real estate property valued at $1,000,000. After tokenization, this property could be divided into **100,000 security tokens**, each representing **0.001%** of the property’s ownership. Investors can then purchase as many tokens as they like, with each token representing a share in the property’s value and future income (such as rental payments).

This process of **fractionalization** unlocks liquidity for assets that are usually difficult to trade, like real estate or business equity. Instead of needing to sell the entire asset, the owner can sell portions of the asset by offering these smaller units of tokenized ownership. This makes it possible for asset owners to **raise capital** without losing full control of their assets.

For investors, purchasing these **security tokens** means they can own a fraction of the asset, making it easier to invest in high-value properties, businesses, or other assets with a smaller initial investment. Investors can buy as many tokens as they want, giving them **flexibility** to invest at their own pace and within their financial capacity.

Token **distribution** and transactions are automated through **smart contracts** on the blockchain. These smart contracts ensure that all actions are **secure**, **transparent**, and executed automatically according to pre-defined rules, eliminating the need for intermediaries and significantly reducing the risk of fraud or human error.