The challenge of solving the ~$300 Trillion real estate*, one of the biggest asset classes.

The tokenomics and tokenization for the real estate class needs to be different to the “purely” digital stores, e.g. Bitcoin, of value. Currently, despite real estate being the largest asset class, there has not been a breakout model yet. There are several reasons for this.

(“Real estate is one of the largest alternative asset classes, with $3.6 trillion in assets under management”; “Global real estate…a total value of US$228 trillion… world’s most important and largest asset class”: i.e., how to justify venture investment into solving real estate when “pure digital play” crypto opportunities still abound.)

The opportunity: To build the biggest and most liquid marketplace for tokenized real estate assets and value handling…The current real estate tokenizations and tokenomics models and services have not sufficiently parsed the unique needs and characteristics of real estate and this is one of the reasons for the lack of the adoption of the real estate tokenization. If this can be solved, we can build one of the great DLT platforms and marketplaces. The challenges include the process for “tokenizing” the unique phases of the value-chain, e.g. knocking on the door for late rent payment collection, to paying the mortgage.

[This article is a call to arms by the author, to hear from others interested in solving the “real estate tokenomics and tokenization”. The author has a strategy (in stealth) and is seeking cohorts to further strategize and build. An objective is the biggest and most liquid real estate token marketplace and exchange, as yes, the real estate class should have its own marketplace.]

Abstract:

Real estate tokens require performance in the physical world and this performance is a continuing task and furthermore, the tasks are of two kinds.

One kind of task and performance requires a human to fulfill it (e.g. take out the garbage) and this further distinguishes real estate from the digital “bitcoin” class. The second kind can be fulfilled by automated tech and software (e.g. turn on the light, create invoices and bills).

If these two types of performance are not fulfilled 100%, the value of the underlining real estate token is affected. Or can be completely destroyed by accident or negligence (e.g. “wrong” insurance); and even with “no fault of the” property manager or operator the property can be impaired temporarily or longer by other direct external events (nuisance mechanical liens). Etc.

The other challenge is to separate the two types of uses of the real estate — the homes that we live in from the investments that we purchase for flips or recurring income.

Another challenge is that the real estate value-tokens would not appeal to the current participants in the crypto space, as the returns, liquidity, and the “moonomics” ;) potentials cannot compare or compete with the returns of the pure digital tokens.

Currently, it is much easier and profitable to be involved with the purely digital or as close to it as possible for profit — i.e. if some expect that Ethereum may 10x from current prices within 2 to 5 years (the “moonomics” factor) then, 1) why buy the capped “8% APR” real estate tokens, and 2) where the Ethereum is infinitely more liquid, and 3) additionally for the more aggressive, risk taking, and sophisticated crypto-traders the yield farming techniques can achieve “50%+ ROI per year” or even “you can now yield farm with relatively low risk while getting extremely high 3xx% APY”.

Conclusion:

The real estate moonomics can be solved by designing and building “the mother of all” real estate platforms and liquidity, the thesis being that the retail market is not “ready” yet (as the real estate investors really like to kick the tires), and that, there are still massive upstream infrastructure and the real estate asset-class platform opportunities to be built. The main problem to solve being: create liquidity and marketplace and in order to do these, there are several things which needs to be solved, designed, and built. The solution strategy includes the goal to make the real estate tokens to be as frictionless and transparent as the purely digital cryptos. Plz contact me if interested: chunggram.at.gmail. Thanks!