Last year we covered how early blockchain startup Propy planned to use the technology to smooth real-world real estate sales by introducing the concept of smart contracts. It went on to actually sell an apartment as an NFT, using the NFT to effectively rubber stamp the legal process. However, that apartment was in Ukraine. Today it launches the whole concept in the U.S., an entirely different kettle of legal fish.
Today it’s extending the whole process further by launching real estate-backed NFTs in the United States, working on the technological and legal framework to literally turn real estate properties into NFTs.
The technology will be marketed to owners and brokers, with Propy auctioning two residential properties located in Florida on February 8 as part of a real estate NFTing service.
Here’s how it works: Propy says the record of the purchase is placed on the immutable blockchain and provides access to the legal documents signifying ownership. This reduces costs for the buyers and makes the purchasing process quick, simply by letting them buy a property in a few minutes. Propy’s plan is to scale this offering globally, providing a single framework for purchasing real estate using blockchain technology.
If successful, the buyers will get a Florida-based investment property, owning a US-based entity that owns the property, the ownership rights of which are associated with an NFT. It is not fractional ownership, and becomes a DeFi asset that can be borrowed against.
Natalia Karayaneva, CEO of co-founder of Propy said: “At Propy we have developed all the necessary smart contracts and a compatible legal framework that allows tokenizing any real estate property in the United States. NFT sales reached $4 billion in December 2021, and real-world assets will soon represent a significant portion of that market”.
In 2021, Propy sold an apartment via NFT in Ukraine. To date, it’s raised more than $16 million in venture capital and is backed by the likes of Tim Draper and Michael Arrington.
Competitor-wise, Propy has a couple. RealT is a fractional real estate investment platform that allows investors globally to invest in the U.S. real estate market through a token-based blockchain network. SafeWire, formerly SafeChain, addresses the wire fraud challenges that real estate firms, agents, clients and industries face due to hacker intervention. However, this was acquired by ClosingLock.