The client is a US-based start-up aiming to help ambitious real estate entrepreneurs across various locations in the
USA raise funds in a seamless manner and scale their ventures.
Traditional real estate markets in the USA continue to grapple with several inefficiencies including high entry barriers, excessive paperwork, involvement of multiple intermediaries, lengthy settlement cycles, and a lack of transparency. This dissuades potential investors from actively participating in the real estate ecosystem, making it difficult for real estate players to fund projects and grow their businesses. The client needed to build a robust crowdfunding platform to address the challenge.
challenges
High barriers to entry due to substantial upfront investments involved
Excessive paperwork and complex procedures add to investor woes
Inefficiencies make it difficult for real estate players to secure project funding and scale business
Damco’s Web3 experts collaborated with the client to evaluate their requirements in detail and developed a state-of-the-art tokenized security platform leveraging Ethereum Blockchain. Here are the key features of the platform:
Issuance of Digital Securities
The real estate players issue digital securities (tokens) on the Blockchain platform in the form of new deals or offerings. These tokens represent fractional ownership in a real estate asset.
Investor Subscription
Deals/offerings approved by the platform administrator can be viewed by the investors who can express their interest or subscribe to the deal. The investor can cancel his subscription before the cooling-off period expires. If not canceled, the subscription is deemed successful, and digital securities (tokens) are credited to the account of the investor.
Smart Contracts
Dividend payments corresponding to digital securities are converted into smart contracts that are executed automatically based on the due date specified on the timestamp.
Live Data Audits
Since all the data can be accessed publicly, real estate regulators can validate transaction history and other details by auditing live data on the Blockchain platform. Live audits allow them to closely track transactions and pinpoint fraud or other financial irregularities well in time.
KYC Verification
KYC verification of the newly registered issuers and investors is carried out by the platform administrator. The latter also approves the deals/offerings issued on the platform and monitors the activities of all stakeholders.
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