The RealEx DAO Solution
The RealEx DAO integrates the following key components:
  1. 1.
    A decentralized autonomous organization (DAO) that owns vaults of real assets and cryptocurrencies that are staked on the RealEx Protocol, with ownership and governance rights represented through the REALEX steadycoins.
  2. 2.
    The RealEx Protocol offers an Ethereum-homed open platform that provides non- custodial mission-led real asset management. This RealEx Protocol can scale to every asset and every user on the planet and beyond.
  3. 3.
    RealEx DAO Asset Vaults hold the real estate, crypto, and other assets collectively owned by the DAO community. These assets support the value of the RealEx steadycoins and are staked to create yield for the DAO community’s work product.
  4. 4.
    The RealEx Foundation distributes RealEx steadycoins to fulfill the DAO’s social mission. For example, the RealEx Foundation is the entity that will form a community of individuals with student debt and distribute tokens to them for their participation.

RealEx DAO Governance

RealEx will be governed through the RealEx DAO, enabling token holders to participate in the decisions of the organization’s operations as well as the ongoing use of the treasury to drive adoption and evolution of the Protocol. The DAO has determined that the goals of governance will initially be:
  • Fair distribution of ownership and control;
  • Ownership and operation by the community; and
  • Compliance with regulatory authorities
The RealEx DAO services three key stakeholders:
  1. 1.
    Community members: The RealEx DAO helps communities of people work in unison to acquire, operate, and dispose of real assets. The goals of those communities will likely be as varied as the communities themselves; some may wish to pursue tokenization of real estate assets as a means of wealth creation, while others may view it as a method of creating social impact within their communities or as a tool to preserve environmental integrity. Regardless of the community’s mission, the RealEx Protocol provides them with a platform on which to operate.
  2. 2.
    Operators: The RealEx DAO will make it possible for operators of real assets to leverage their intellectual property and services into DeFi using a ready-made interface. This will accelerate the adoption of asset tokenization as it makes it possible for an existing universe of operators to rapidly transition into this new industry.
  3. 3.
    Users: RealEx DAO’s Protocol will eventually allow people to own fractional pieces of real assets via property-specific NFTs.
These stakeholders are serviced through the DAO’s core functions, which cover the following three areas:
1. Missions &Operations: The DAO looks to create an impact in specific communities around the world. By identifying missions that are aligned with the DAO values, the DAO can more effectively acquire and operate the types of properties that support those missions. For example, the mission of helping people with student debt ties well to acquisition of student housing and apartment buildings, where people who have this type of debt tend to live. By acquiring those assets, the RealEx DAO can accelerate the mission of turning student debt into financial independence by helping this group own the places in which they live and study.
2. Specialized KnowledgeWork: To build key components of the Protocol, and to ensure that the DAO continues to scale to serve the needs of the community, the DAO recruits community members that have specific skills sets that can be leveraged to fulfill an ongoing list of tasks to help continue to build and operate the technology, systems, and processes of the DAO. This includes development of technology as well as specific real estate work.
3. Reference Application Implementation: The RealEx Protocol serves as an open data and transaction platform to existing applications which may be utilized to serve the needs of the DAO. There are many moving pieces in a large ecosystem such as the real estate marketplace, and there are already many solutions to solve specific problems in those markets. The Protocol aims to create an interface where existing applications plug into the Protocol for the benefit of the community.
The implementation of the Protocol is general enough to make RealEx usable in multiple ways by different stakeholders with different economic models over the life of an asset. Although these are described here they are not necessarily comprehensive and it is expected other models will be developed over time. Specific examples of scenarios in which the Protocol will be used immediately by the DAO include:
  • Providing fractional ownership of a specific asset (for example, the DAO acquiring a resort property in Costa Rica and issuing a NFT that is locked into the RealEx steadycoin, providing fractional interests in that property to all RealEx steadycoin owners).
  • Providing fractional ownership of a pool of assets amongst a community (for example, the DAO buying a limited partnership interest in a network of solar farms and then returning yield from those operations to the DAO).
  • Providing someone with access to a real asset (for example, booking a vacation resort villa in Hawaii when that resort is owned by the RealEx DAO).
  • Leasing a real asset to someone (for example, renting a unit at the University of Texas, when that student housing center is owned by the DAO).
Operationally, the RealEx DAO format provides the greatest chance of inclusion and long term innovation and success.
The primary objective of the DAO is to identify general goals and values of the organization. This concept aligns with Harvard Business School Profession Bill George’s management philosophy of True North. The next step is to identify key tasks that support those goals, and then devise a method to break tasks into assignable and accountable units of work.
Units of work are contributed by people skilled in certain areas to ensure their proficiency with the task at hand. The RealEx DAO expects contributors across the key areas shown in the diagram above.
Initially, the development of the RealEx DAO, RealEx Protocol, and RealEx asset vaults will be a highly manual process, requiring the work effort of several community members to define, assign, and monitor the initial process of the systems. Over time, the RealEx DAO will evolve from a start-up environment to a highly-functioning decentralized organization that incorporates the “3 Ps” by leveraging human capital (people) and technology (product) to enhance operating efficiency, reduce work effort (process), and control spending (control).
One of the key ideals around the RealEx DAO is to focus on quantitative metrics, versus relying on the emotional factors that typically drive human behavior in simple or complex organizations. All of the aspects of the RealEx DAO are measurable.
For example, real estate assets can be defined by a number of quantitative factors, such as annual operating income, geography, asset type, risk factors, historical performance, and ESG (environmental, social and governance) scoring. Likewise, liquidity pools can be quantified in terms of allocation, target yield, risk factor and automatic buy/sell provisions.
Real estate assets require ongoing maintenance and management and can be assigned by the DAO to professional services members within the community that have specific skill sets that can preserve the value of the RealEx Asset vaults. Factors such as location and design in real estate development are highly subjective, which is why the DAO would bid out and award supervision of more qualitative aspects of development to community members, or outside vendors, with a track record of performance in these areas of operations.
Crypto assets require monitoring and risk-mitigation strategies. While automated trading can assist in ensuring that the DAO’s interests are served through constant monitoring and trading activity, there is a need for human oversight, which is a task that the DAO would assign to the qualified community applicants who seek this work. Even though RealEx is firmly dedicated to DeFi practices, it would not be unreasonable for the DAO to engage the services of a Capital Markets desk from a large trading firm to ensure the integrity of crypto trading and staking transactions.
As the size of the RealEx community grows, the DAO will continue to focus on building the rails of the decentralized processes required to effectively run the organization.
A key aspect of the DAO process is the concept of an annual strategy review combined with a quarterly planning program that outlines the tactics, resources, and development activities to support the long-term strategy. Annual plans will be submitted to the DAO for its vote. From there, specific tasks and actions will be defined and bid out to the community. At regular intervals, community member will vote on key decisions, much like an Investor Committee.
A monitoring process will ensure that tasks assigned to key community members are visible to the community, and when things go wrong, provide a mechanism to modify performance.
From a financial standpoint, the RealEx DAO incorporates best practices from accounting and applies them to decentralized finance. There are quarterly reports to the community with investor reporting typically associated with a publicly held company. Operational records are visible to community members, and multiple community members will be given multi-signature authority to move community treasury based on community agreed actions. Initially accounting and tax issues for the DAO will be outsourced to professionals with specific expertise in this area.

The RealEx DAO Protocol

The RealEx DAO Protocol (the “Protocol”) offers an open platform to coordinate mission-led real asset management. The technical infrastructure coordinates the pooling of yield-bearing real assets. This enables all of the community participants to capture any value creation from asset operations.
The Protocol can be used for assets that RealEx DAO owns, but it will also serve as a building block for others, as people will be able to use the Protocol to coordinate the benefits of tokenizing, staking, and using real assets that the DAO doesn’t own.
The Protocol is homed on the Ethereum blockchain and will bridge to other blockchains in the future with Polygon planned as the next blockchain. This will offer maximum utility and pairing with liquidity while it supports integration with other protocols.
The Protocol comprises five components as reflected below in the high-level diagram. Each component is implemented as part of the RealEx DAO system to deliver the community members yield from the underlying assets.
  1. 1.
    RealEx Steadycoin. The RealEx steadycoin (REALEX) represents ownership of, and participation in, the RealEx DAO and its assets. Ownership of RealEx steadycoins provides fractional ownership of underlying NFTs for individual assets. Ownership of at least one RealEx steadycoin provides an opportunity to receive a RealEx Governance token (which requires work input by the community member). By default, all RealEx NFT rights are locked in the RealEx steadycoin.
  2. 2.
    RealEx DAO Vault. The RealEx DAO Vault (the “Vault”) is a series of smart contracts that coordinate the deposit, use, and withdrawal of RealEx NFT assets under management. After RealEx assets are deposited into the Vault, they are considered to be under management. The Vault will then manage all related money flow, such as the distribution of yield or stakeholder fees, the parameters around which shall be continuously decided by the DAO. The Protocol will be designed to support multiple vaults targeting various missions over time.
  3. 3.
    RealEx - G Token. The RealEx Governance token (REALEX-G) is a non-transferrable token that offers its tokenholders a right to yield from the Vault’s assets in exchange for their active contribution to the RealEx DAO. This governance token may be issued to any RealEx holder as long as they actively participate in advancing the mission of the DAO, such as regularly voting on DAO proposals or actively contributing to RealEx Protocol’s continuous technical development and operational activities.
    Possession of the REALEX-G tokens provides a combined benefit of receiving distribution of yield resulting from staking assets in the RealEx DAO Vaults, in addition to rewards from the RealEx staking program. Token holders may forfeit their yield payments if they fail to contribute during any given staking period. RealEx G tokens are transfer locked, giving only the initial receiver the right to use them, which ultimately restricts their trade outside the remit of the DAO.
  4. 4.
    RealEx Real Asset Non-Fungible Token (NFT). Each RealEx Real Asset NFT is a non-fungible token representing a single real asset to be stored in a Vault along with the asset’s metadata. RealEx DAO coordinates with external real asset verification providers to mint REALEX-NFTs for specific assets that it acquires through purchase, lease, or option. These NFTs are then bonded into the Vault and provide a canonical on-chain reference to that real asset. The RealEx NFT metadata will outline several key elements of the asset, including but not limited to:
    • ssss
    • Property rights (e.g., property ownership versus lease)
    • Management duties (e.g., the creation of an operating agreement, managers, accounting and performance reviews)
    • Yield rights (e.g., payment of staking fees less expenses)
    • All disposition rights (e.g., payment of proceeds from property or NFTs’ sale)
    • An off-chain reference to the real estate asset, such as a link to a county register record
    • An off-chain reference to an ESG data feed of the asset
    • An off-chain reference to the legal agreement purchasing the asset
    • Asset information such as the address, geographic coordinates, one or more photosor other media assets
  5. 5.
    RealEx Utility NFT. The RealEx DAO imagines that in the future, once it deposits an asset, the DAO may choose to create RealEx Utility NFTs linked to a specific Real Asset NFT. These Utility NFTs would provide additional benefits for DAO members because of the underlying utility represented by the asset. For example they could be minted in limited batches and awarded like loyalty awards (like frequent flier miles) for stays in DAO properties to contributors. In some cases these utility NFTs could be locked or unlocked and traded peer-to-peer. Other financial uses include minting carbon credits with a verified attestor, for example as a result of owning raw forest land. In this case, these credits, or fractions of credits, could be awarded directly to token holders for their use, or deposited in the RealEx Vault for management and yield optimization.

Cases in which the RealEx Protocol is used as a platform by outside parties

As discussed, the RealEx Protocol is an open platform and one day will not only be usable for assets under RealEx DAO’s ownership, but will also be usable by people willing to gain the benefits of tokenizing assets that aren’t directly under the DAO’s ownership. For example, in the more distant future, the Protocol could be used for any of the following hypothetical situations:
  • Making an NFT for a property to make fractional ownership possible (for example, creating an NFT pool for a ski house and selling those NFTs to your friends for them to buy a share of the property).
  • Borrowing against a real asset (for example, acquiring a DeFi loan to pay for an apartment’s purchase, which has been tokenized using the Protocol NFT maker).
  • Crowdfunding an asset (for example, a community of people who want to leverage the Protocol to issue an NFT, raise funds using that NFT, and then use the funds to buy a property).
Last modified 7d ago