Real estate has long been a popular choice for investors, but its lack of liquidity & bundles of paperwork around it in the traditional market can be risky. However, 0xequity is on a mission to revolutionize the real estate landscape within the decentralized finance (DeFi) ecosystem. By utilizing ERC3643 real estate tokens (RETs), they aim to create a vast ecosystem that enhances the utility of 0xequity.
Here are some potential primitives that can be created in the 0xequity ecosystem to make moving Real Estate exist on-chain even more compelling:
- Collateralized Loans: In traditional finance, real estate investors often benefit from leveraging their investments. 0xequity recognizes the importance of this mechanism in unlocking capital efficiency in DeFi. By implementing a MakerDAO-like system for RETs, 0xequity is offering stablecoin loans that are collateralized by RETs. This could potentially reduce over-collateralization rates due to the lower volatility and real-world backing of RETs.
- Real Estate Index Funds: 0xequity RET structure allow for the bundling of different real estate properties into a pool of tokens (from different properties). This pool of RETs would provide investors with exposure to a diversified portfolio of income-generating real estate assets. These bundled tokens could be created based on geographical locations, building types, or median property values. This innovation aims to replace traditional real estate valuation methods with on-chain pricing, potentially providing real-time valuation data for various real estate categories.
- Usage Rights: 0xequity aims to introduce 100% legally backed ownership of real-world assets which will allow users in certain jurisdictions to use their real estate holdings in investment-based visa and citizenship schemes (as offered in the UAE & Turkey). 0xequity will facilitate 100% of such operations without the user getting involved in hefty paperwork and without having to visit the place in person.
While the DeFi space has seen the emergence of various projects replicating traditional financial offerings, such as fixed-income products and derivatives trading, none have delved into the real estate asset class. 0xequity believes that it has the potential to democratize access to real estate investment, allowing individuals, not just large financial institutions, to participate in collateralized loans, index funds, and DeFi yielding strategies.
With income streams backed by real-world assets, 0xequity aims to offer safe and sustainable returns that will attract yield farmers and early cryptocurrency adopters looking to diversify their portfolios with less volatile yet high-yield instruments.
