In this article, we look at 5 projects, highlighting a key aspect of consideration technological component.
How do projects propose to invest in real estate, what is the economic component and the mechanics of work sites? What function do tokens perform and how is blockchain used in real estate investments?
Considering the top-5 cryptocurrency capitalization, we concluded that in most cases, projects that offer to invest in real estate, in fact, offer buying your own cryptocurrency, not direct investment.
In this article, we will pay attention to other aspects of the most interesting projects that represent a similar proposal - we will consider the mechanics of the platform, the tokenization model, and for each we will find out where and how the investments go.
Disclaimer: we do not urge to invest in projects, buy tokens or invest in real estate, this is an informational article only.
Global REIT
As stated on the project website, Global REIT works according to the same mechanism as traditional funds that invest in real estate - it offers dividends to holders of its shares represented by tokens, based on the income from the assets under management of the project.
According to the creators of the project, each platform member receives 2 token – GREM and GRET. The tokens will provide access to the assets managed by the platform (GREM) and allow to receive dividends (GRET) from the income of the platform.
According to the company, the dividends for GRET tokens will be stable and constitute 8% of investment, while GREM tokens dividends will initially be 2% of net asset value (NAV) and decrease to 1,25% of NAV as the project grows.
Without going into the technical features of the site (the project does not represent any code of its own smart contracts), and an understanding of the financial component (a red flag on the promise of a stable, guaranteed return), we can conclude that the project involves investments in cryptocurrency, which will quoted in free markets.
Building Block REIT
According to a statement on the project’s website, the Building Block REIT (BBR) is “the first real estate investment fund located in the United States” that uses blockchain technology to digitization of ownership rights for real estate.
The blockchain in BBR is used to eliminate friction in work with real estate, as well as for the direct distribution of dividends and safe voting of users.
The project is in a sid-stage of attracting investments and, therefore, so far it does not provide any work mechanics, no tokenization model, no economic model of its own work in the future.
All that can now be understood from publicly available information is that by buying tokens you get the right to vote in the purchase of all types of real estate, as well as the opportunity to receive dividendsrepresenting part of the income from asset management of a company by a third party.
Brickblock
According to the project’s website, Brickblock provides the technology and legal framework to facilitate real estate investment through the blockchain.
The Brickblock project uses blockchain technology to “eliminate the geographical constraints of the investment process,” without specifying additional information about the applicability, form, and mechanics of the project tokens.
From the section “how the project works,” it is only known that investors have to go through account verification (KYC / AML), deposit funds and get “tokens” (without a name and in quotes), which represent a “share in investment (what?) and can be sold on the market. "
Even excluding the complete lack of information on which investments are invited to participate, how the project will work in general, on the phrase that tokens can be sold on the market, it can be concluded that, as in the previous case, we are talking about investments cryptocurrency, not real estate.
Slice
According to the project website, using the Slice platform, “private investors gain access to wealth creation opportunities, and property owners gain access to a large pool of untapped capital.”
The project, like others discussed in the article, is trying to solve several problems at once - to reduce the minimum investment threshold for investing in real estate, overcome the geographical gap and provide the opportunity to receive dividends, correlated with the number of tokens.
As can be understood from the only explanation of the mechanics of the site, the blockchain is needed to issue tokens (how many of them are there, on which blockchain, where they are circulating - unknown) and receive payments in accordance with the style of investment.
Moving away from the fact that the project does not offer to familiarize either the mechanics, or economic features, or the smart contract code, according to the statement that the tokens will circulate in the free market, we can conclude that investments, as in previous projects, are made It is in cryptocurrency, and not in real estate.
REIDAO
According to the data presented on project site, REIDAO is a technology firm built on the Ethereum blockchain that uses digital assets to access democratization to real estate market opportunities.
The project plans for real-life real estate to create smart contracts with a limited number of tokens, which, in turn, will certify ownership of a share of ownership, like documents in the real world.
Unfortunately, the project neither on the site, nor in the white peper does not lead the mechanics of the site, and githabe no code has been provided that would reflect the process of transferring ownership of real property to the holders of tokens.
Without taking into account the absence of an explanation for whom the real estate will be registered, the digital rights to which will be accessed in the secondary market in the form of tokens, and even the lack of a description of the mechanics of the process, here, unlike other projects, investment is proposed exactly in real estateexpressed as tokens.
Hack and predictor Aviator
Global REIT, Building Block REIT, Brickblock, Slice projects offer token investments as in final product. Such an approach implies a market, risks, profits and other investment aspects inherent in cryptocurrency, and not real estate, so we are talking about investments in tokens.
Making a more detailed clarification, in order to invest in real estate - we must purchase / rent real estate, and not tokens or, for example, shares. Projects that add the abbreviation "REIT" to the name refer to the existing model of funds that work with real estate and pay dividends in exchange for investments. However, REITs offer to purchase securities and this is an asset class, and does not claim to be "investing in real estate", as the above projects do.
Closest REIDAO is located to invest in real estate, where buying and selling tokens transfers the right to specifically taken real estate, although even in this case we are talking about investments in tokens secured by real estate.