BlockEstate is raising capital for one of the world’s first tokenized real estate funds. BlockEstate will use predictive modeling to manage and invest that capital in a carefully selected portfolio of market sectors with the goal of maximizing returns. Once a quarter, the revenues generated from these investments will be used to invest in additional properties and to buyback tokens from the token holders at NAV (net asset value) on the open market. These repurchased tokens will be “burned” and removed from circulation. This continually shrinks the total supply of tokens, causing each remaining token to represent a progressively greater percentage share of the fund’s assets. Between the ever increasing revenue potential of the additional properties we add, combined with ever diminishing number of tokens in supply, each token’s value should proportionally increase over time.
BlockEstate employs an innovative process for rewarding its token holders. Once a quarter BlockEstate will buyback tokens from token holders with the net profits generated from the fund. These tokens are removed from circulation, progressively reducing the total token supply. This process increases each remaining token’s percent stake of the market cap, which should theoretically impact each token’s value.
In a healthy economy, many people are capable of making returns in the real estate market. To significantly outperform the market, however, requires both the agility and resources to take advantage of opportunities at a national scale and a fundamentally deeper understanding of the root causes behind market trends and how long those trends might last. Simply looking at things like cost, rental income, and occupancy is not enough outperform the market. BlockEstate is partnering with experts in big data to track the megatrends behind real estate valuations and income potential. Our investment model is built around the following metrics:
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If the BlockEstate token succeeds to completion, it will be one-of-its-kind in the real estate market. The company plans to list BEAT, a trading platform focused on tokenized securities, one the OpenFinance Network (OFN). The network works with both retail and institutional investors globally, deploying blockchain technology in order to facilitate more efficient securities trading.
Benefits Of BlockEstate Security Tokens:
Put simply, security tokens represent ownership of some sort, whether it’s real estate, debt, bond, stock etc. According to the Official Guide to Tokenized Securities drafted by Anthony Pompliano, founder and partner at Morgan Creek Digital assets:
The potential benefits of security tokens (tokenizing traditional assets) are quite many. These include:
Expanding the design space for security contracts
24/7 markets
Asset interoperability
Fractional ownership
Automated compliance
Rapid settlement
Increased market depth and liquidity
Reduction in direct costs
Disadvantages Of Security Tokens:
Whereas security tokens offer great advantages over traditional securities, it’s a fact that they also have some downsides. Firstly, representing ownership of real-world asset like real estate through security tokens will require trusting a third party, which isn’t the case with other digital tokens like Bitcoin.
For instance, if a person purchases “ownership” of a car in for of a security token, and then the vehicle is stolen, they no longer have possession of that particular thing, in practical terms. This means that you will have to trust that the judiciary system and the police will bring your car back undamaged.
However, even though trust is an important thing with asset-backed tokens/security tokens, the benefits such as accessibility, transparency, and increased liquidity, are still a great improvement over the status quo.
