The real estate industry is full of gaps. Investing in real estate is costly, slow, and competitive, and as a result it’s difficult for the uninitiated to get into. But today, thanks to recent innovation in blockchain technology, those gaps can be bridged.
DwellFi is the first and only asset protocol for real estate owned by decentralized autonomous organizations (DAOs). With the DAO LLC structure and the use of non-fungible tokens (NFTs), it seeks to provide direct ownership and governance of real assets. This allows DwellFi to cut out the middlemen and untangle the complications that have historically been associated with purchasing and owning real property.
The Problems With Real Estate Investing
Investing in real estate is challenging. It’s costly: buyers need to have a sizable amount of funds for the down payment and closing costs. It’s slow: the process of buying or selling takes weeks, and it involves a lot of time-consuming paperwork. It’s illiquid: invested money can be locked up for years, or decades. Some of these problems are partially solved by different types of investment options, but they each have their own issues as well.
For example, REITs provide liquidity, diversification, and dividends. But they’re also tax inefficient and returns get whittled down by a multitude of fees, like acquisition fees, management fees, administrative fees, and hefty performance-based fees.
Real estate crowdfunding platforms can be an attractive option to get in at a lower price, but most require a lockup period and charge management fees, which can significantly reduce income.
Other real estate investment options typically require that you be an accredited investor to participate.
The First Solution: NFTs
One of the greatest innovations from recent years in blockchain technology, non-fungible tokens (NFTs) are unique digital titles stored on a blockchain ledger that represent ownership of digital or real assets. NFTs can be bought and sold in an online marketplace. In real estate, NFTs represent ownership of a real property.
Real Estate NFTs have some big security benefits. In traditional real estate, bad actors often counterfeit papers, assume the identities of owners, and defraud other people. NFTs safeguard owner identification with an undisputed record of ownership and a clear and complete ownership history. Using blockchain explorers like Etherscan and BSCscan, the owner of a real estate NFT can be validated on-chain.
The Second Solution: Fractional Ownership
Fractional ownership is a percentage ownership of an asset, from a tiny slice all the way up to 100% ownership. By fractionalizing real estate properties, a large amount of initial expenses can be reduced for owners. When combined with NFTs, owners have incredible access to liquidity with the ability to instantly sell all or part of their ownership.
Through active management of a property by a DAO LLC, non-accredited investors can not only participate, but have full transparency into property and money management. On top of that, it’s possible to earn additional yield from decentralized finance protocols.
Uncovering the Innovation Facilitated by DwellFi
With fractional ownership, NFTs, and DAOs, DwellFi offers an innovative way to build a real estate portfolio. DwellFi utilizes a novel legal framework for bringing real estate deeds onto blockchain networks based on Wyoming DAO LLC legislation. Using smart contracts, property deeds are transferred to the LLCs so that each DAO manages a specific property. This allows non-accredited investors to have the ability to purchase and sell digital assets that constitute evidence of ownership.
Another innovation is the flexibility to customize the ownership structure to suit your preferences, with however many co-owners. Owners also benefit from instant transactions at all times. By using NFTs as proof of ownership, there is a market for the resale of individual ownership interests or the full property.
DwellFi’s solution has many advantages: equity appreciation, zero holding periods, flexibility in structuring ownership to precise specifications, and secondary market liquidity. It also expedites transaction speed from weeks to minutes, with reduced fee structures. DwellFi is the optimal solution for investors desiring real estate exposure, property owners who want liquidity, and real estate firms seeking to harness decentralized finance and blockchain technologies.
There is tremendous opportunity with the brand new class of blockchain real estate. According to Moore Intelligence, if only 0.5% of the global real estate market moves onto the blockchain over the next 5 years, it will create $1.4T of liquid real estate assets.
Overall, DwellFi represents the future of real estate ownership. Using DwellFi, owners will benefit from innovations in decentralized finance and NFTs backed by physical real estate assets, all while contributing to the development of a more open and accountable financial system.