Property deed tokenization using NFTs remains one of the most viable uses of the technology. With time, the trend is picking up despite a few regulatory hurdles when it comes to acquiring a license to sell security tokens. That said, Homebase, a crypto startup that was formed last year, has managed to tokenize its first NFT title deeds for a single-family home located in south Texas.
The home was valued at $235,000. However, within two weeks, Homebase was able to raise $246,800 for the property by tokenizing it on Solana using a smart contract that was tied to an NFT. Interestingly, the startup raised an extra $11,800, which was set aside to aid with “maintenance and other issues.”
Real estate tokenization offers a few perks for both home owners and investors. First, it helps property owners raise liquidly from these properties, and second, it provides anyone the chance to invest in and profit from real estate. Owning property is a dream for many individuals, however, given the astronomical figures involved, it remains out of reach for many people.
🚨Homebase Sells Out 1st Tokenized Home on @solana 🚨
We’re excited to share that our first tokenized rental property sold out in < 2 weeks
Investors will begin to receive rent directly to their crypto wallet via USDC 😎
Learn how you too can become a property owner ⬇️
— Homebase🏠 (@HomebaseDAO) March 28, 2023
Homebase is Just Getting Started
One hurdle with real estate tokenization is getting cleared by regulators. In the Homebase case, the company spent seven months just to get the legal and compliance details ready for this property. As Domingo Valadez, cofounder and CEO of Homebase, notes, the overall effort took a year. That included filing with the SEC to be allowed to market security tokens to both retail and accredited investors.
All in all, 38 investors got in on the action, with the minimum investment of $500, according to the SEC filing, 30 of which were non-accredited.
Valadez notes they chose Solana due to its ease of use and cheap gas prices. As a result, 15 out of the 38 participants were able to create their first Solana wallets and buy fractions of the property as NFTs. Now, these participants are expected to hold on to these NFTs for at least one year before they can sell them freely. The NFTs represent their stake and accrued interest in the property.
After the success of this sale, Homebase says it is working on tokenizing its second property. The startup allows users to buy tokenized slices of property “in one click” using USDC.
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Basil is an avid fan of blockchain technology and all its innovations, and he is passionate about sharing this narrative with his audience. He has spent over five years in the crypto space, specializing in research and creating Web3 content for various media outlets around the globe.
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