NFTs and DeFi are revolutionizing real estate investing and homeownership – Here’s how
NFTs continue to impact multiple industries, and this integration opens up new opportunities and reveals new trends for blockchain technology.
Recently, the real estate industry has shown interest in blockchain technology as it opens up the possibility of fractional ownership, cryptocurrency-backed mortgages, and other unique ownership, financing, and payment models.
Here’s a look at a few real estate-focused blockchain projects that are to bring decentralized finance, cryptocurrency payments, and non-fungible tokens (NFTs) into the industry.
Propy is the largest real estate-focused protocol in the cryptocurrency market, and it focuses on automating the home buying process and making the closing process quick and secure.
After becoming the first company to launch a real estate NFT in 2021, Propy made waves for the recent U.S. real estate NFT auction after selling a home in Tampa, Florida for 210 Ether (ETH) d worth about $650,000.
It’s a wrap!
The first NFT real estate auction in the United States is now a thing of the past. A big thank you to everyone who participated and to those who encouraged us. Congratulations to the lucky winner, we can’t wait to see what you do with the #PropyNFT the next! What an explosion! pic.twitter.com/LHfZrNSwTN
— Propy (@PropyInc) February 10, 2022
In addition to providing proof of ownership to the holder, real estate NFTs created through Propy can also be used as proof of collateral for crypto-based borrowing and lending.
Milo offers crypto-based mortgages
When it comes to paying a mortgage, crypto holders currently have to struggle with which of their tokens they are willing to cash in and also incur a taxable event as there are few options to pay a mortgage with crypto. -change.
Milo is a Miami-based fintech startup that claims to offer the world’s first “crypto mortgage” by allowing customers to use Bitcoin (BTC) as collateral to qualify for a 30-year loan.
Once launched, the service will be open to US and international clients looking to purchase real estate in the United States.
The company has already processed a few loans during the current early access phase, but interested parties are encouraged to join a waiting list.
Related: Blockchain enables enterprise business models in the metaverse
Home equity shifts to DeFi
Evidence of the growing popularity of real estate-focused projects in the blockchain ecosystem can be found by examining several projects that have emerged on the scene in 2022.
Vista Equity is a recently launched project with the goal of becoming the world’s first peer-to-peer marketplace for real estate-backed NFT assets.
WE LAUNCHED ! A home can now be fully tokenized, giving consumers new financial freedoms. Investors can now buy NFTs backed by real estate as securities. Read our press release https://t.co/x7WKKyiCnH. Share, like and follow. @Algorand @wsford @silviomicali #immovable #blockchain pic.twitter.com/IiCDfv6034
— Vesta Equity (@vestaequityvpm) February 15, 2022
The goal of Vesta Equity is to enable homeowners who own their homes to tap into the equity in their homes through tokenization. According to the company, token holders could then sell some of them as split NFTs.
Typically, property owners tap into their equity by refinancing or selling, and tokenization solves this problem by giving investors a simplified way to invest in real estate.
QuantumRE is a similar project that is just getting started. Like Vista Equity, QuantumRE’s goal is to connect owners and investors to provide owners with access to debt-free financing, while investors have access to residential real estate.
To do this, QuantumRE assists in the process of creating Home Equity Agreements (HEAs), a type of financial tool that allows homeowners to get a lump sum cash payment for the equity held in their home without monthly payments, interest or additional debt.
The deal can be settled by selling the house, refinancing, or renewing the deal. By creating liquidity and a trading platform for HEAs, QuantumRE supports a secondary trading market for HEAs, which can be tokenized and split into fractional units.
QuantumRE has indicated that the first fractional HEAs will be offered on the platform during the first quarter of 2022.
On an interesting side note, Vista Equity and QuantumRE are launching their products on the Algorand blockchain, citing the network’s fast processing speeds and low gas fees compared to the Ethereum network.
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