How to raise funds for your real estate project from a global pool of crypto investors
Estate Baron started off way back in late 2014 as a crowdfunding platform for real estate developers.
Real estate development is facing a funding gap, lending from banks has been tightened, lowering LVRs and increasing presale requirements. Both of which necessitate more equity from the developers.
Estate Baron allowed developers to syndicate that from a large pool of investors online. We created an IPO in a box solution that covered the legal and technology side that would allow developers to promote their security offerings. We have till date enabled the raise of over $50 Million for several projects all over Australia.
Konkrete in its initial format was simply Estate Baron with its centralized share registry replaced with a distributed ledger. The idea was to do the same compliance and by using DLT we would be able to tap in a global community of crypto investors.
There are several legal and technical issues which inhibit this path. Securities, just because they are represented on DLT still carry restrictions on who can own them, how they can be distributed etc. Scale and reach is what can make crowdfunding a success, its lack or friction in achieving it can inhibit it.
Enter DEFI, it stands for decentralized finance. What has happened since the ICO crash is that some of the most meaningful work in creating borderless finance is being done. Projects such as Compound and Maker have created the underlying infrastructure and distribution to make borderless finance possible.
The new Konkrete approach is still going after the same original problem:
Helping real estate developers solve their funding gap.
It is also going with the same original solution which was to reach a large number of small investors.
However we are no longer setting up public companies or selling shares in the project.
What we are doing instead is onramping the asset which represents the real estate project on the blockchain in a non custodial manner.
We take a charge in the form of a mortgage, (first, second etc depending on the circumstance) and then we take that loan contract as an asset that can be plugged into something like a Maker or Compound.
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Asset Tokenization and Exchange
Konkrete is a decentralized protocol for onramping of real world assets onto the blockchain. Tokenization introduces…
This means that there is no fractionalization, no setup of public companies, shares, regulatory headaches. We represent the asset in an indivisible manner on the blockchain and that is where the role of Konkrete ends.
However once your asset is on the blockchain you can then borrow against it by using that as a collateral.
Konkrete has found its purpose as a protocol for onramping of real world assets on to the blockchain. Once on the blockchain vast liquidity can be accessed via a mechanism that is fundamentally similar to going to a bank and seeking finance against your collateral.
Except here the bank is swapped by a nebulous investor base using DEFI.
Note that the real estate developers here do not need to understand the sausage making behind the scenes. In fact from their perspective it is even more simpler than the public company solution from before. It is as simple as going to a lender who now can work with your specific circumstances.
This approach radically solves the compliance and allows our clients to tap a much wider global investor pool in a far more cost and effort effective way than before.