An ICO (Initial Coin Offering) in the crypto world is equivalent to an IPO (Initial Public Offering) in the traditional world of finance. NASDAQ.com succinctly describes an ICO as a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for Bitcoin or Ether [among other cryptocurrencies]. Some have raised millions of dollars in funding in a matter of minutes.
At any given moment, there are hundreds of ICOs listed on tokenmarket.com, a site that tracks and even helps launch the next big idea. Among them are several promising real estate ICOs that are sure to disrupt the industry, all making real estate a decentralized marketplace governed by smart contracts. The main goal is to have transactions more affordable to the masses while increasing liquidity and decreasing the amount of traditional (not to mention archaic) paperwork needed to convey each property.
Here are a few to keep an eye on:
REAL (Real Estate Asset Ledger) is a new Ethereum Smart-Contracts governed ecosystem that applies Blockchain technologies to the enormous Real Estate investment industry, giving greater access to global investment in Real Estate, lowering barriers to entry, and increasing market liquidity. It will offer an effective method of investing and securing the value of the existing 50-100 Billion USD equivalent in cryptocurrency into the less volatile and growing Real Estate market by generating rental income and value appreciation. See White Paper.
REIDAO seeks to introduce crypto assets that are backed by a particular real estate in the real world. This will create an exposure towards the real estate market for the crypto assets holders, such as rental income generation and capital appreciation from the underlying property. These crypto assets will follow the ERC20 Token Standard, and will be able to be integrated with other services on the Ethereum blockchain. See White Paper.
REX (Excerpt from Executive Summary from White Paper): Traditionally, obtaining reliable property information has been difficult. Today, with advances in technology, data has become easier to ascertain. However, the data has become controlled, manipulated, and governed by centralized organizations, resulting in exorbitant transaction and listing fees. With recent advances in peer-to-peer data distribution and blockchain technology, Rex will provide universal access to real estate information and streamline the transaction process.
Rex will start by building a global multiple listing service, creating a data layer that is accessible to everyone. The database will minimize listing fees and maximize listing exposure. In our third phase, Rex will provide users the ability to create sale and lease “smart” contracts. Benefits include a savings on time, communication, and administrative costs. Finally, Rex will develop an architecture to create tokenized contracts with an exchange where property tokens can be traded.
ATLANT focuses more on peer-to-peer rentals, but seem to share the same goals as the ICOs listed above: They believe blockchain has the potential to help accelerate the adoption of the Sharing Economy which has already begun to unleash industry disruption by opening up significant amounts of previously untapped private capacity and tokenization of property will completely change real estate transactions and ownership transfer as we know them. With a secure, tamper-proof system based on the blockchain, users can trade parcels of property on our platform and bypass intermediaries in rental deals, transacting P2P (peer-to-peer), all of which will enhance ease of use and security for guests and hosts alike, streamlining user experience and driving accelerated adoption. See White Paper.
PROPY – Again, basically the same concepts as above per their White Paper. The buyer exchanges government-backed currency (fiat) to PRO (Property Tokens) to unlock the contracts, contingencies and eventually conveyance.
We’re still in the learning stages, but from what I’ve read so far, these ICOs will still be taking a small fee just as we agents would for assisting with the transactions. I’m all for growth and development, so it will be fascinating to watch how these and other real estate ICOs perform in actual practice. From a layman’s point of view and at the risk of sounding like a snippy agent, it looks as if you have a choice between Burger King, Carl’s Jr., Jack in the Box, McDonald’s or In-n-Out: They all sell the same thing, are fast and efficient, and taste is subjective. But sometimes you want that human touch, to be waited on and catered to, and that’s when you call a good real estate agent - or at the very least - have a night out at Morton’s.