The Past and the Future

The Past: Challenges with Tokenization of Real Assets

Real estate, initially considered an ideal use case for tokenization, has proven itself to be a stubbornly illiquid asset class. While tokenization solves many challenges presented by traditional real estate ownership models, many powerful blockers remain. For example, while a token may ultimately be traded seamlessly at a low cost, the initial transaction cost for minting and maintaining a token is considerable, making it financially impractical for many individual properties. Further, real estate, by its very nature, is unique, irreplaceable, and non-fungible.
Unlike tokens representing many other non-fungible tokens (NFTs), however, real estate ownership entails ongoing maintenance and management, so tokenized real estate will require significant technology upgrades to continuously render necessary actionable data. While the NFT model applies directly to properties and other real assets, until there is an ecosystem of blockchain-based tools to support day-to-day operations, the promise of real asset tokenization will remain just that: a promise.
There is currently no substantial market for fractional interests in isolated properties. The entire trading value of the security token marketplace, where several fractional real estate properties are traded, is only a fraction of the daily trading volume of ANY of the top 20 cryptocurrencies. The planned tokenization of a luxury condominium development in NYC was abandoned due to lack of institutional interest (“Propellr and Fluidity's NYC Real Estate Tokenization Deal Falls Through”), and the first real estate security token, the ASPEN coin, has experienced very little trading on the secondary market. It may be that it’s just early days for this sector. Or it may be that this market making approach to date is not how the democratization of real estate ownership is going to happen.

The Future: RealEx DAO’s Point of Differentiation and the Creation of the Steadycoin

In addition to the challenges related to the tokenization of individual assets and the lack of liquidity in the market, the overall volatility of cryptocurrencies has led to a growing demand for a safer crypto investment. Fiat currency-pegged stablecoins have become mainstream in crypto due to their lack of volatility as compared to tokens like Bitcoin and Ether. However, the comfort that many users have associated with stablecoins is based on the misconception that stablecoins will provide them with the same purchasing power tomorrow as they have today. Stablecoins are backed by centralized bank-controlled currencies, which leaves them as equally vulnerable to depreciation as the currency itself.
RealEx DAO’s goal is to solve this problem by creating a new cryptocurrency category called “steadycoins”. Steadycoins are backed by a basket of inflation-resistant assets, which will cause them to be a safer crypto, as the value of the underlying assets will help maintain the steadycoin’s purchasing power regardless of market volatility. In addition, steadycoins offer yield to their token holders.
The core of the RealEx DAO Protocol is the RealEx Steadycoin, which provides:
  • Diversified risk across a very wide variety of assets
  • More liquidity for token holders
  • Integrated access to the utility of all or a subset of assets
  • Leverage across the DeFi ecosystem as a medium of exchange
  • Open access through public blockchain networks
RealEx is pioneering digital asset technology representing an evolution in the ownership of real assets such as real estate. It provides a platform to make it possible for anyone to benefit from real asset ownership, while making the most of the utility and growth of the decentralized finance markets.
RealEx will provide a protocol level composition and integration layer that enables many different participants to plug into the system, offering a utility that enhances the use and optimization of assets managed by the protocol; all powered through the RealEx steadycoin (symbol: RX).
A steadycoin delivers multiple benefits to its holders, including:
  • Intrinsic Value - It is hard asset backed creating a floor of value for the coin. Liquidation of the treasury is used to acquire assets to back up the underlying steadycoin value.
  • Equity Value - A steadycoiin has the possibility for growth in the underlying asset value so it’s unlikely to be as volatile in market crashes or manipulation.
  • Income Producing - Steadycoins provide a steady stream of yield.
  • Inflation Resistant - Steadycoins are not pegged to a currency. Because inflation increases prices (and decreases the purchasing power of the currency),this keeps
    yield consistent relative to inflation.
Because RealEx is backed by real estate assets, RealEx can further be used as a utility to unlock access to the assets; such as discounts on rent, or access to special events.
Last modified 7d ago