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Khaleej Times
03-04-2025
- Business
- Khaleej Times
There's a new way to afford a horse in Dubai with blockchain tech
Investing in racehorses has traditionally been the preserve of the super wealthy and elite. While it continues to attract this crowd, there's a new way to invest in racehorses that massively brings down the cost and ease. Basically, you buy a fraction of a racehorse and are given a token that represents a share of it. It's called tokenisation and the concept is becoming popular in the property sector. Those who can't afford it, or don't want to, invest in a whole villa or penthouse apartment can now own a share of it via tokenisation. And the idea has found its way into other expensive assets like racehorses. One of the emerging players in racehorse tokenisation is a company called Tokinvest. It is launching a new racehorse tokenisation scheme that is built on blockchain technology. Most people associate blockchain with cryptocurrencies, but the technology can do so much more. Matt Blom, co-founder and chief strategy officer at Tokinvest, said he expects people will be able to invest in racehorse tokens starting from around Dh1,000. 'It's all about giving people access to the economic performance of the horse without needing to own it outright. The token represents fractional exposure to the costs and potential rewards of training and managing a racehorse over a one-year term.' With your token, you own a stake in a basket of professionally selected racehorses for one racing season, thereby spreading your chances of success. If a horse in the basket performs well or is sold, investors may receive a payout. Tokinvest said the full structure will be detailed in its whitepaper before launch. It's all about giving people access to the economic performance of the horse without needing to own it outright' Matt Blom, Co-Founder And Cso At Tokinvest UAE-regulated Tokinvest partnered with a New Zealand-based tokenisation firm called DSG Group to launch the investment opportunity. Ryan Johnson-Hunt, co-founder and CEO of DSG Group, said: 'Racehorse ownership is just the beginning – together, we're unlocking new asset classes and expanding access to investment opportunities that were previously out of reach for most investors.' Under this scheme, investors don't actually own a piece of the horse. Instead, they get access to potential economic upside during the season. 'It's more like being part of a performance-linked fund than owning the horse directly. We're also exploring ways to offer race-day updates and exclusive content as part of the utility in future versions,' Blom explained. Syndicates Purchasing a racehorse outright can range from tens of thousands to several million dollars, depending on the horse's pedigree, training, and racing history. This high entry level led to the creation of syndicates. In this arrangement, multiple individuals share ownership of a horse, dividing expenses and potential returns. One such company based in the UAE is called Racing Life Dubai, which pools together racehorse investors and says it only selects 'racehorses with genuine winning potential, offering members the thrill of competing at the highest level while enjoying the rewards of success'. Ownership extends beyond the track, and members gain access to an exclusive circle, enjoying VIP privileges at Meydan, private invitations to premier events, access to the Winner's Circle restaurant, and trackside experiences. But the starting price for investment is much higher than for tokenisation. Racing Life Dubai offers shares starting at £5,000 (Dh24,000) for a five per cent stake in a young horse with promising potential. A five per cent stake means up to 20 people can own one horse. Racing Life Dubai's top trainer is Bhupat Seemar, who trained Dubai World Cup-winner Laurel River last year. Another popular racehorse ownership provider is UK-based Deva Racing. Tokenisation With tokenisation, the entry costs are much lower compared to sole ownership and syndicates. But your token represents a much smaller share of the horse. Depending on the fund, hundreds of people could hold a share in the same group of horses, as in Tokinvest's case. Generally, the token price covers standard things like training, stabling and day-to-day care. Most of the net proceeds – after costs and fees – will go to the investors. One of the benefits of the blockchain is transparency, as transactions can be viewed by anyone so you have a better idea of where the money is going. Another benefit of racehorse tokenisation is liquidity – it's much easier to buy, sell and trade tokens compared to owning shares via a syndicate. Australia-based BTX Racing enables investors to purchase micro-shares in a racehorse, making ownership accessible to a broader audience. Steve Piek, CEO and founder of BTX, said: 'We were the first company globally to offer a fully regulated racehorse ownership based on a blockchain. Our minimum investment is $75 (Dh275) and will open up to international owners shortly. We aim to be in the Middle East soon.' Piek said he was passionate about creating new ownership models and experiences for horse ownership, using blockchain technology and decentralised systems. The Middle East has a very rich and long history of racehorses that is ingrained in the culture. The Dubai World Cup has grown into one of the richest and most prestigious events in the global horse racing calendar. This year, it will feature nine world-class races with a total prize pool of $30.5 million (more than Dh100 million). Fan engagement Tokenised ownership of racehorses is relatively new, and companies are still developing their offerings. Owning a racehorse outright comes with privileges like access to race days and paddocks. Owning a token or a fraction of a racehorse doesn't guarantee the same perks. But providers are looking at ways of offering them in the future. Platforms like The Winners Circle, powered by Zilliqa, use the blockchain to improve fan engagement by offering digital tokens that provide voting rights, and access to exclusive content. It says it is helping to bridge the gap between the physical and digital realms of horse racing. NFTs You may have heard of non-fungible tokens (NFTs) before, especially when it comes to art. They are like a digital collectible or receipt that proves you own a one-of-a-kind item on the Internet, stored securely using blockchain technology. When you own a fraction of a racehorse you could also turn it into an NFT. We're unlocking new asset classes and expanding access to investment opportunities that were previously out of reach for most investors' Ryan Johnson-Hunt, Co-Founder And Ceo Of Dsg Group Maxima is a racehorse exchange platform that offers an NFT marketplace where it says anyone can own horses and earn. While most NFTs are purely based on a digital asset, Maxima's NFTs are based on real-world assets – the horses themselves. 'All racehorses are backed by physical counterparts and share-owners can gain access to a transparent account of a horse's history. Every sale on the exchange is recorded on the blockchain and the company assures buyers that the data is publicly accessible for great price transparency, without hidden fees,' it said. NFT owners can benefit from the appreciation of prices when horses win races, royalty payments to creators each time their shares are purchased, and tournament bonuses for the best performers. When it comes to the various options for ownership, there's no more horsing around.
Arabian Business
19-03-2025
- Business
- Arabian Business
EXCLUSIVE: Dubai's once-elite racehorse market now open for fractional ownership with digital tokens
Racehorse investment in the UAE, historically an exclusive market accessible only to the royals and super wealthy, is set for a revolutionary change, with two real-world asset (RWA) tokenisation platforms from Dubai and New Zealand teaming up to offer fractional investment in the equestrian sports. Tokinvest, the Dubai-based leading marketplace for RWA tokenisation, and DSG Group, a New Zealand-based blockchain-powered tokenisation platform, will offer tokenised investment opportunities in racehorses, stables, and siring rights to open up this traditionally exclusive market accessible to a wider investor base. The combine's tokenised 'syndicated ownership' model for the sector will also simplify asset management and enhance liquidity by making fractional shares of racehorses transferable, aiming to tap into the UAE's globally popular and booming equine market. 'The UAE's equestrian industry is one of the most prestigious in the world, with events like the Dubai World Cup attracting global attention and contributing significantly to the country's sports economy. Tokenisation has the potential to redefine racehorse ownership by introducing fractional investment, making this traditionally exclusive market accessible to a wider investor base,' Scott Thiel, Co-Founder and CEO of Tokinvest, told Arabian Business. Thiel said their partnership will leverage blockchain technology to create a seamless, globally accessible investment platform in Dubai's racehorse sector – known as the 'King of Sports'. The DSG Group, which recently partnered with Evolution Stables to tokenise racehorse ownership via digital syndication under the supervision of New Zealand Thoroughbred Racing (NZTR), is set to replicate the model in Dubai in partnership with Tokinvest. 🏇 Tokenised Racehorse Investments Are Here 🏇 Tokinvest x DSG Group are revolutionising racehorse investments with blockchain-powered fractional investment. Read more. — Tokinvest (@Tokinvest_Cap) February 25, 2025 Redefining racehorse ownership Thiel said the Tokinvest-DSG partnership will roll out a multi-channel strategy to bridge the gap between traditional equestrian investors and the digital asset community. 'By combining storytelling and strategic partnerships, we aim to redefine racehorse ownership for a new generation of investors,' he said. Sports sector experts said the blockchain-based investment initiative in the horse race sector could be a game changer, as it will lower entry barriers, enabling more investors to participate without the financial burden of full ownership. This will also enhance liquidity, making traditionally illiquid assets like racehorses tradeable investment opportunities and attracting new capital into the sector, they said Thiel said: 'At Tokinvest, we're not just embracing this change—we're driving it.' He said tokenisation will drastically change the 'limited' or 'exclusive syndicate' model prevalent historically in the sector by allowing everyone to purchase digital shares in a horse at fractional costs. 'Our focus is on retail investors looking to diversify their portfolios with alternative assets, and institutional investors such as Funds and asset managers seeking exposure to the growing sports and entertainment sector,' he said. Web3-savvy investors eager for regulated real-world asset (RWA) opportunities will also be the combine's target group, Thiel said. Promoting global investor participation in Dubai's racehorse sports The Tokinvest chief executive said the platform will root for global participation as long as investors comply with local and international regulations. 'One of the biggest advantages of tokenisation is its borderless nature. Investors no longer need to be physically in the UAE to own a stake in a high-value racehorse,' he said. Industry watchers said with blockchain-backed security, transparency, and compliance, investors can buy, sell, or trade ownership stakes digitally. Dubai's leadership in Web3 innovation and regulatory clarity makes it the perfect gateway for international investors looking to explore real-world asset tokenisation, they said. Thiel said Tokinvest has established a network of regulated virtual asset brokers that provide access to 1.6 billion people. He said the UAE's progressive stance on digital assets, with clear frameworks for blockchain-based investments, will be a major advantage for the promotion of global investments in Dubai's equine sector. 'The UAE's Virtual Assets Regulatory Authority (VARA) is actively shaping the legal landscape for digital asset ownership, making Dubai a global hub for tokenised investments,' he said. Thiel said Tokinvest will also work closely with asset owners to provide investor protection through bankruptcy and claims remote structures. He said the partnership will work with industry specialists, those with many years or decades-long track records of successfully managing racehorses, to promote their initiative. 'These highly regarded industry players are well known and trusted in the industry and have an existing audience base,' he said.
