Real-estate tokenization powered by blockchain technology
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Description
Blocksquare is a platform that uses blockchain to tokenize properties. They offer a wide array of tools to help companies to easily create, tokenize and sell tokens representing real-assets. Blocksquare allows to tokenize any property and to easily digitize its value, either partially or fully. Blocksquare tokenizes properties on the Ethereum blockchain with ERC-20 smart contracts. Each property has a maximum issuance of 100,00 tokens. Using a public blockchain brings more transparency to the processus. Through the creation of an entity called a ‘Public Corporate Resolution’ as well as the use of the IPFS, a distributed file system, revenues generated by the property can be transferred to token holders.
Blocksquare addresses the challenges of the real estate industry
The traditional real estate market is marked by many challenges such as low liquidity, high entry barriers, and complex transactions. Yet, the main challenge remains the capital requirements to invest in real estate. Buying a property can cost from a few tens of thousands up to millions. It is inaccessible to a majority of investors. The industry is also very opaque, with a lack of transparency and relatively inefficient transactional processes. This environment restricts market dynamism, limiting the opportunities for investment and growth. With these challenges, Blocksquare saw in blockchain, in particular Ethereum, a way to improve current processes by bringing more scalability, interoperability and transparency.
A deeper dive into Blocksquare solutions
Blocksquares provides a suite of tools to help companies tokenize real estate. Let’s have a dive deeper into what solution the platform offers.
The Corporate Resolution is the creation of a legal entity with the aim of transferring the value generated by the properties to the token holders. For each transaction, there is a 1.5% transaction fee aimed at remunerating the platform, the issuing company as well as Blocksquare.
As mentionned above only 100,000 tokens can be minted, so if you wish to tokenize 50% of a property you will mint 50,000 tokens (50% of 100,000). Let’s say the property generates $1,000,000 in revenues and that 50% of these revenues go to token holders, we have $500,000 * 0.5 = 250,000$ that will go to token holders.
This tokenization platform called ‘Spring‘ is the main product, but Blocksquare offers other products.
- Delta: A white-label platform allowing you to create your own tokenized marketplace where you can tokenize, issue, sell, distribute, manage and track tokenized properties very easily.
- Tide: A white-label platform allowing investors to buy or sell tokenized real estate and manage revenue distribution.
- Wave: A white-label platform allowing to manage the buyback of tokenized real estate properties.
Benefits and outcomes
- Allows for an easy tokenization of real estate properties
- Streamlines compliance with laws and regulations
- Increases liquidity in the real estate industry
- Renders real estate more accessible
- Permits to create a system where revenues are redistributed to token holders
- Overall it reduces barriers to invest in real estates
- Permits an easy and simple management of tokenized properties and revenue distribution
Further information
Blocksquare developed a set of smart contracts on the Ethereum blockchain ton create Oceanpoint, a liquidity protocol to connect Decentralized Finance to real estate. The goal is to provide a protocol backed by real estate assets where everyone can own an unlimited pool of real estate assets without any legal restriction.
At the heart of the Oceanpoint procotol is the Blocksquare Token (BST) that serves as a governance token. 15% are reserved for investors, 3% for mentors, 22% for the team, 5% Pre-ICO, 5% for liquidity provisioning, 10% for marketing and 40% are locked and will be used for rewards.