Real estate is often seen as stodgy and resistant to change, but even in this slow-moving industry blockchain technology has been making inroads. Here are examples of Web3 applications that are transforming the business of owning, selling and managing physical property.
Properties as Tokens:
Decentralized finance (DeFi) services are not your grandpa’s bank. They run on an interlocking system of smart contracts, oracles and blockchains. DeFi is able to provide more convenient and seamless service that paves the way for innovations previously not possible, particularly in underserved markets.
NFTs Deeds:
Non-fungible tokens (NFTs) are all the rage now, but the applications aren’t limited to profile pictures and artist fanclubs. Propy’s proprietary technology and legal framework uses NFTs to represent property ownership. The record of a purchase is placed on the blockchain and provides access to the legal documents. This minimizes costs for buyers and streamlines the purchasing process down to mere minutes.
Fractionalized Investment:
Real estate has historically been an Illiquid asset, which is one of the reasons it has been less accessible for investment by people in lower economic brackets. At the same time, taking advantage of different property market trends across the globe has been a privilege available only to the wealthiest individuals. RealT is trying to tackle these problems by leveraging NFTs to offer fractional investing, with lots starting as low as $50.
Crypto Mortgages:
Milo is a fintech startup that is promising to deliver the world’s first “crypto mortgage” by allowing customers to use Bitcoin as collateral to qualify for a 30-year loan. Price volatility is addressed by changing the interest rate using a ratio of the crypto currency value to loan amount. If it falls below 65%, that triggers a margin call. When the ratio hits 30%, Milo will liquidate the assets and store the value in USD.
Peer-to-Peer Marketplaces:
The median U.S. home sale price was $346,900 in 2021, up 16.9% from the year prior and the highest on record going back to 1999, according to data from the National Association of Realtors. Vesta is a Peer-to-Peer marketplace for real estate-backed NFTs that allows homeowners to easily leverage and sell a portion of their home equity. Investors can buy into the future appreciation of a property and build a portfolio of real estate assets much in the same manner as they do with stocks