Taking real estate and mixing it with the world of NFT technology is a recipe for industry transformation. NFTs have now established a new way to represent proof of ownership and this doesn’t just apply to digital goods. Last year TechCrunch Founder Michael Arrington’s Kyiv Apartment made history as his property sold for nearly 5x starting bid in an auction with a Silicon Valley startup and real estate company Propy. Today, the same organization is taking a step forward by introducing this innovative technology to real-world estate assets in the US.
After working on the technological and legal framework to turn real estate properties into NFTs, Propy are now ready to launch the first NFT backed real-estate auction this month. 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.
Growth in demand for NFT technology
The technology will be marketed to owners and brokers, with Propy auctioning two residential properties located in Florida on February 8 as part of an NFT real estate service. Smart contracts are increasingly becoming legally admissible records, with Vermont and Arizona both passing such legislation, demonstrating growth in the demand for the adoption of this technology.
The auction next week includes a Florida-based investment property. The successful buyer would own a US-based entity and the ownership rights of which are associated with an NFT. It is not fractional ownership. This becomes a DeFi asset that can be borrowed against. The property is located in St. Petersburg, Tampa, Florida. The starting bid for the Spanish-inspired 4 bedroom estate, situated in the exclusive neighborhood of the artsy and charming Gulfport, is $650k. This property boasts 4 bedrooms, 2.5 baths with an additional separate 1 bedroom, 1 bath garden suite. The auction will be held next week.
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”.
Pairing of digital assets with real world goods
After witnessing the massive influx of artists and auction houses into the world of NFTs, pioneering companies are dipping their toes in the trading of real-world property assets with NFTs. As developers experiment with NFTs and the Metaverse, the value of owning the traceable proof of ownership for both the digital asset and the real-world equivalent becomes increasingly enticing. Technology today is often considered a cost in the real estate business, something that you invest in to improve systems and processes. Blockchain technology is unique in that it adds a potential new stream of revenue for the residential and commercial market.