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White Paper

The Real Estate Evolution.

Improving the Efficiency and Liquidity of Real Estate Markets.

The real meaning of Flexibility Stability Usability

Realtyum is a cryptocurrency token on the Binance Smart Chain. Several factors made us choose to develop and to build on BSC. One of the reasons is that the chain is promising and has many legit resources to back it up. BSC allows great flexibility without large costs related to exchange fees that are currently plaguing Ethereum. Plus the BSC block time is also much shorter. On Ethereum, the block is 30 seconds, while on BSC, it is only 3 seconds. That is 10 times faster.  A considerable amount, especially if you want to use Defi applications in real-time. Furthermore, BSC solves expensive smart contract interactions and the price of oracle usage since transaction fees are considerably lower.

Our Social Network.

Therefore, as BSC offers the best initial market (a completely unserved one) and the most pragmatic use case in the actual application, we think this is the most logical launch. Post-launch, due to Realtyum’s architecture, we will be working with the community to port onto new chains, maximize validator usage, and compete with the incumbent oracles.

World Economic Forum

10% of global GDP on blockchain by 2027

 

Finyear

Tokenization market CAGR at 59% from 2019-2030

Frankfurt School BC

Europe tokenization market $1.5 trillion in 2024

THE REAL ESTATE EVOLUTION

Executive Summary

Real Estate as an investment has throughout history proven to be one of the strongest performing asset classes. As the largest asset class in the world with a combined estimated value of over $228 trillion, investing in Real Estate has many advantages over investing in stocks, bonds or mutual funds. The most notable benefits of investing in Real Estate and Real Estate-based financial products typically include: a predictable cash flow and ability to generate passive income, an improvable asset with the ability to appreciate in value and an array of benefits surrounding leverage capabilities and tax advantages.

However, Real Estate investment transactions remain frozen in time, conducted in the same manner as they have been since the late 1900’s. Using outdated infrastructure, paper based processes, and multiple third-party intermediaries, the real estate sector has internalized significant structural inefficiencies. These traditional practices create unnecessary friction in transactions, impacting value and liquidity, while market participants have previously had no option but to tolerate the complex regulations and processes associated with real estate investments.

Realtyum is positioned to modernize real estate transactions and deals by transitioning them into the digital age, making significant improvements in real estate transaction efficiency, cost, security and liquidity.

Realtyum is using blockchain-based technology to eliminate the largest inefficiencies associated with real estate capital raising, management and investing.

Realtyum is a new Token and Platform that connects and enables the digital asset economy. Process driven friction in private markets present challenges to illiquidity, speed, record accuracy, and market efficiency. As an SEC-registered transfer agent, Realtyum will connect investor and asset data to broker-dealers, custodians, and sources of liquidity, thereby reducing this friction. Realtyum’s data management platform will connect shareholder and issuer data to ecosystem partners via API’s.

In the traditional real estate landscape, Issuers and Real Estate Investment Trusts (REITs) must deal with the complexities of asset and investor management, lengthy ownership transfers, regulatory investor compliance, expensive business operations, maintaining cash and dividend flow, security against fraudulent transactions by bad actors, and an overarching obstacle of liquidity complications. The Realtyum Real Estate Token and Platform provide a comprehensive solution to each of these areas.

Realtyum is:

1. Leveraging next generation ledger technology behind a new digital interface to optimize efficiency in investors & property management.

2. Implementing smart contract technology to expand the capabilities of transactions, improve cash flows, and shorten cycle times.

3. Maintaining bank-grade security & regulatory compliance by employing cryptographically secured decentralized ledger (commonly referred to as blockchain) technology.

The overarching goal through all of these procedural improvements is to drastically increase liquidity in the real estate Industry.

This introduction to Realtyum serves to educate both real estate investors and issuers, establish capabilities, and invite the comment and expansion upon ideas related to the tokenization of real estate assets.

THE REAL ESTATE EVOLUTION

Realtyum Mission

Realtyum’s mission in real estate is to improve the efficiency and liquidity of real estate markets by offering an investor data management portal enabling simple, fast, cost-efficient, and globally syndicated transactions.

Realtyum strives to provide the most fluid and practical digital functionality needed for capital raising, asset governance, automated compliance, investor management, and custodial solutions.

Realtyum’s technology offers a platform that modernizes the traditional investment process via the conversion of legacy certificates into tradeable digital securities, creating a clear path to an entirely new frontier of capital in real estate; 24/7 asset liquidity through digitized ownership and direct market liquidity.

THE REAL ESTATE EVOLUTION

The Problem

To understand the potential impact of technology-driven improvements in the real estate investment industry it is critical to first understand the existing inefficiencies. Isolated private asset market participants like Real Estate Investment Trusts and Real Estate Funds have suffered from high administrative costs and low liquidity options caused by antiquated technology stacks, where investor and user data cannot be easily managed or shared. As such, private asset markets are notoriously illiquid, slow, and difficult to access, which results in prohibitive and costly administrative processes and lack of price discovery that deter efficient market activity and further entrepreneurism.

Real Estate transactions have been conducted in minimally-variable structures for decades, as a fully integrated digital solution has yet to exist. Since the inception of the real estate investment industry, issuers and investors faced the complexities of manual asset and investor management, lengthy ownership transfer processes, regulatory investor compliance, low margin business operations, maintaining cash and dividend flow, securing against fraudulent transactions by bad actors, and an insurmountable obstacle of liquidity complications.

Adding to the cost and complexity have been third-party intermediaries, such as lawyers, brokers, and banks that tend to benefit from the complexity of these transactions, implementing rent-seeking cost structures for captive investors and fund managers. The result is complex and expensive transactions, leaving real estate investment to be a lengthy and inefficient process for buyers, sellers, investors & issuers.

While most forms of commerce have established digital infrastructure, real estate asset investment management broadly lags behind. No standardized processes exist for real estate transactions, beyond those that are regulated, which preclude technological integration and enables a series of costly middlemen. The right technology and process can be standardized through the use of digital assets, electronically represented ownership records maintained on a digital ledger.

Realtyum’s technology solution leverages distributed ledger technology that enables secure and efficient creation, issuance, and management of digital assets. Our goal with tokenization of real estate is to use Realtyum’s technology to optimize real estate transactions by making the process efficient and cost-effective for all parties involved.

Although the new technology comes with benefits, tokenization proposes new challenges and processes to an industry that is typically resistant to change. Realtyum is focused on user experience, and the Realtyum software will represent a user-friendly portal for managing digital assets. The underlying blockchain technology behind the software solution ensures that digital assets are managed securely & efficiently. The Realtyum tokenization platform is a solution designed specifically for compliance and efficiency in managing all real estate assets, including REITs and assets trusts.

THE REAL ESTATE EVOLUTION

Market Opportunity

Real estate assets are an essential component of a well-balanced portfolio, often yielding superior risk adjusted returns relative to publicly traded stocks or bonds.

Real estate’s attractive investment profile stems from the pairing of passive income and strong inflation adjusted historical appreciation rates.

Despite clear benefits, the real estate asset class is still one of the most difficult to invest in and remains inaccessible to common investors.

Currently, investment in real estate requires significant up-front capital, real estate management knowledge and experience, or pre-existing industry relationships. Tokenization provides a novel opportunity to widen the global investor base to investors with investable capital who may lack the knowledge or network to enter the market.

There exists significant demand by investors for a trustless, compliant, and borderless way to connect to real estate.

The following data highlights several areas in the Real Estate market prime for disruption by a blockchain-based data management solution such as Realtyum:

Big Picture

·Real estate is the largest asset class in the world, valued at over $228 trillion, eclipsing the world’s gold supply of $8 trillion. Real Estate represents about 60% of the world’s assets and is greater than the value of all stocks and bonds combined.

Investor Accessibility

·Calculated using Federal Reserve SCF microdata, in 2016 there were an estimated 12,417,040 accredited investor households in America. Accredited investor households controlled roughly $65.88 trillion in wealth in 2016 or 75.8% of all United States private net worth.

·The Chinese government limits the amount its citizens can invest abroad. Apart from tuition, Chinese citizens are restricted from taking more than the equivalent of about $50,000 USD out of the country; making full real estate investments nearly impossible.

Fees

·Global investment fees reached a record high of $104 billion in 2017, according to Reuters.

·Today, staff costs make up 50% – 75% of an issuer’s overall operating costs due to highly manual and inefficient asset & investor management office processes. Tokenized real estate transactions will remove a $155 billion middleman. Revenue from the real estate Sales and Brokerage industry is extracted by commission-based agents that are directly correlated with property prices and real estate transaction volumes.

Liquidity

·The “Illiquidity Tax” is estimated to devalue assets by as much as 20-30%. This represents the cost of bearing the burden of an illiquid asset, impacting asset valuation and portfolio return.

Technological Innovation

·Research by the National Association of Realtors in the US determined that online websites were used in 95% of all home purchases and that an online search was the first step homebuyers take 44% of the time.

·According to the World Economic Forum, in the next ten years, 10% of the world’s GDP will be stored on the blockchain as digital assets through a process called tokenization. That’s $10 trillion worth of assets stored as tokens.

·Fractional real estate markets are not a blockchain invention. Since the JOBS act passed in 2012, real-estate crowdfunding companies have used the Reg D 506(c) exemption to sell real-estate shares to accredited investors.

The establishment of JOBS act exemptions led to expansion in private capital formation, driving and significant private market and crowdfunding activity.

Building on these frameworks and driven primarily by the emergence of blockchain technology, ICO sales of 2017 and 2018 were demonstrative of the global demand for fractional ownership, accelerated liquidity pathways, and efficient capital formation mechanisms.

Adapting these methods for institutional practices and automated regulatory compliance, the tokenization of real estate provides structural efficiencies and cost savings, broadening the global investor base and enhancing liquidity on both a primary and secondary transaction basis.

THE REAL ESTATE EVOLUTION

Realtyum Solution

Realtyum’s token and platform will initially target three primary classes within the real estate investment sector:

(1) The Real Estate Investor

(2) Real Estate Funds & Real Estate Investment Trusts (REITs)

(3) Real Estate Crowdfunding Platforms (Issuer/Capital Raising Platforms).

1) THE REAL ESTATE INVESTOR

Real estate has long been a portfolio staple of the wealthy. Very few assets manage to provide the same degree of passive income and capital appreciation on a risk adjusted basis. However, many barriers exist that prohibit the common investor from participating. Investors want exposure to real estate assets for their portfolio, and the option to purchase fractional ownership of a property lowers the barrier to entry relative to traditional real estate assets. Once investors hold tokenized real estate assets, the ability to directly list and trade ownership interest in a simple and intuitive manner will enable new forms of market activity.

Tokenization has been proven to date in the context of capital formation events, which have become increasingly popular among real estate investors. With direct ownership of their assets, investors have the option to borrow against real estate equity as collateral. This emergent credit model creates new, appealing opportunities for many real estate investors. The current real estate environment does not offer much accessibility to this type of multi collateral DAO, and Tokenization will create multiple opportunities to preserve and grow capital outside of traditional real estate.

In terms of asset management, tokenization simplifies real estate by connecting General Partners and limited partners. Markets that had previously required pre-existing relationships, where capital formation was facilitate by phone calls and in-person meetings, the implementation of digital solutions bring market participants closer together. This imparts a positive effect on management efficiency. The ability to easily and seamlessly connect with reputable GPs significantly expands the market for real estate investment.

2) REAL ESTATE FUNDS & REAL ESTATE INVESTMENT TRUSTS (REITS)

“Nontraded REITs are costing investors, especially elderly, retired, unsophisticated investors, billions. They’re suffering illiquidity and ignorance, and earning much less than what they ought to be earning.”

Craig McCann, a former economist with the US Securities & Exchange Commission Real Estate Investment Trusts (REITs) are legal structures that own or finance properties that generate income, and by law distribute 90% of their earnings to shareholders. REITs can be publicly traded or established privately between investors. While initially an American invention, public REITs are now available in most geographies, with their total market capitalization growing from $734 billion in 2010 to $1.7 trillion in 2016. If anything, the success of public REITs indicates the need to develop cheaper and more efficient tools to invest in real estate.

REITs

·NAREIT, a Washington D.C. based research and advocacy firm for the U.S. based REIT market, estimates 80 million U.S. investors own REITs through their retirement savings and other investment funds.

·REITs in the United States own approximately $3 trillion of gross real estate assets , and public listed equity REIT portfolios included more than 500,000 properties at year-end 2017.

·NAREIT analyzed detailed property data from CoStar and estimated the total size of US commercial real estate to be between $14 and $17 trillion . REITs hold an estimated 10% of total commercial real estate and 20% of the institutional-grade market.

·Nearly 40 countries, including all G7 countries , have adopted the U.S.-based REIT approach to real estate investment.

·REITs comprise 98 percent of the headline real estate Sector in the Global Industry Classification Standard.

Public REITs are only available through national stock exchanges managed by brokers and investment banks. In the US, banks like Goldman Sachs and Morgan Stanley charge lofty underwriter fees to bring firms public. These fees can be as high as 6% to 7% of the funds raised. In addition to these fees, Investors incur significant expenses when trading on public exchange platforms.

Non-Traded and Private REITs are REITs that are not listed on an exchange and not publicly traded. In 2015, the SEC issued an investor bulletin on Non-traded REITs . The SEC noted that the biggest hurdles to Non-Traded and Private REITs are that they are typically highly-illiquid investments, with up-front fees that can range from 10% to 15% of the offering price to compensate for individuals selling investments and organizational costs of deal management. Non-traded REITs also have significant transaction fees for property acquisition or early redemption of shares. Additionally the SEC expressed concerns of lack of share value transparency.

REITs have high barriers to entry, with minimum investment terms that become prohibitive to most investors, and often requiring a large number of investors to syndicate a transaction. Tokenization allows for the further fractionalization of assets into smaller minimums, provided that automated registry management tools preclude the variable costs per investor that lead to higher minimums.

3) REAL ESTATE CAPITAL FORMATION PLATFORM

Real estate crowdfunding has recently gained popularity across geographies and in the United States following the Jump-start Our Business Startups (JOBS) Act in 2012. Initially, only for accredited investors, the JOBS Act exemptions were relaxed by the SEC in 2017 to allow crowdfunding platforms to raise funds from accredited and non-accredited investors alike.

Today, there are many real estate crowdfunding platforms operating worldwide. These platforms have seen great success, but they remain extremely limited in scale when compared to funds raised by public REITs. Structural requirements under Reg CF preclude crowdfunding exemptions in financings greater than $1M.

This is also due in part because these investments cannot be traded daily like a stock and are therefore highly illiquid.

Depending on the nature of the project, investors can expect to have their money tied up in an investment for many years.

Tokenized Real Estate Drives Value for Real Estate Crowdfunding Platforms

The potential for cheaper and more forgiving capital vs. traditional lending institutions changes the pressures faces by crowdfunding platforms. Decreasing the minimum investable increment opens a property to a more diverse investor base, including those that would not normally consider real estate.

The ability to sell minority ownership interests gives the issuer a desirable level of flexibility, allowing them to extract liquidity while simultaneously maintaining control of the asset. This is because fractional owners have less governance than institutional investors who traditionally control major decision rights (e.g. when to sell or refinance).

Finally, a system like the blockchain promises lower costs since there will be a reduced need for lawyers and less subscription paperwork.

THE REAL ESTATE EVOLUTION

The Benefits

The widespread adoption of any new technology is strongly correlated with concrete benefits derived from its implementation.
In the case of tokenized real estate, the benefits come in three forms: (1) Reduced operating expenses for fund administration, (2) expanding the market through fractionalization of assets, and (3) lower latency and easier trading of those fractionalized interests. The Realtyum platform is designed to deliver all of these benefits in a way to make it attractive to both administrators and their investor clients.

REDUCED OPERATING EXPENSES

Existing fund administration processes suffer from lack of technology infrastructure, leading to paper based processes, extended cycle times, additional costs, and human error. The combination of these results drives higher loads, lower profit, and further illiquidity. The RET platform is designed to reduce the administrative burden of funds by simplifying the stakeholder data management requirements shouldered by the fund administrator.

The RET platform is designed to migrate certain transfer and record-keeping processes away from paper forms, overnight mail, and fax machines to modern database and ownership mechanisms enabled by – but scarcely exposed – blockchain technology. The use of blockchain in this context is primarily employed as the database architecture for an ownership ledger that keeps a triple-entry ledger of current and past transactions.

This automated registry reduces record keeping and reporting costs for the fund administrator by eliminating manual, non-standardized, and paper processes. Blockchains record all transactions on a ledger where information cannot be changed or erased.

EXPANDED INVESTOR BASE AND ENHANCED LIQUIDITY THROUGH FRACTIONALIZATION

One of the key benefits that blockchain databases offer is in the fractionalization of assets and the attendant distribution of those fractionalized ownership units in the form of a ‘Smart Contract’. Through its use of blockchain technology, the RET platform will enable a REIT fund administrator to produce digitally represented shares that reflect proportional ownership of the fund, and distribute these fractionalized and dematerialized shares to a wallet controlled directly by an investor or controlled managed by a custodian.

Once an asset has been fractionalized, the ownership of that asset is recorded on a decentralized or centralized, open-source or proprietary digital ledger, as reflected by Realtyum’s use of both public blockchains and proprietary databases. The investor will have direct online access to those fractionalized shares through a web application provided by Realtyum, or through reference applications and interfaces built upon Realtyum’s API’s. As these transactions occur on a blockchain-enabled distributed ledger, they are impossible to erase or delete, and if a certificate or other paper document is lost, the ownership ledger can be quickly recreated with 100% accuracy due to Realtyum’s record keeping capabilities.

It is nearly impossible to lose or steal shares that have been encoded on these database architectures, and they produce a clean, auditable transaction record.

Fractionalized shares not only reduce costs to create, maintain, reissue, and report on assets, but they also enable lower-priced entry into the market, broadening the pool of investors to the benefit of fund administrators and their existing investors. Unlike the current Real Estate market, tokenization allows for selling portions of shares, rather than selling entire shares. Dividends and other payments are more easily calculated when they are recorded in this fashion.

Simultaneously, utilizing blockchain technology improves the ability of funds to securely share data with their professional services partners, counterparties or investors, and with regulators.

Tokenization allows for automation of many processes, which is the driving factor of cost reductions. One way the RET platform addresses automated solutions is with dividend payments. When investing in an asset that delivers passive income, pay distributions are manually done by the General partner, which takes man power and time. The RET platform is working to make these payouts automated, saving time and money typically spent on these payouts. Another way RET is implementing automation is with compliance. Once registered on the RET platform, your investor profile is verified throughout the entire Security Token ecosystem.

LOWER LATENCY, LOWER FRICTION TRADING

Perhaps the ultimate benefit of improved fund administration and fractionalized share ownership is the improvement of liquidity produced by these two previously discussed benefits. When the fund administrators implement with Realtyum, and the underlying shares have been fractionalized and distributed, the shares themselves become easier to buy, sell, and leverage as collateral.

Reducing the latency and complexity of REIT share transactions accrues benefits to both fund administrators and their investors. For the fund administrators there is a direct cost reduction, and for the investors, there is faster liquidity leading to lower discounts at any time of sale. From a market structure perspective, smaller minimum investment increments lower the implied price of liquidity in a market, which results in improved price discovery and erosion of illiquidity discounts on a portfolio basis.

Because it is possible to program compliance (trade and transfer restrictions, for example) into a smart contract, many of the impediments to buying, selling, and collateralizing these valuable assets can be eliminated through the use of the Realtyum platform.

TECHNOLOGY

THE REAL ESTATE EVOLUTION

The Capabilities

Asset Investor Documents

Realtyum develops technologies and plays the role of a transfer agent. Core capabilities of Realtyum include the ability to:

  • Monitor issuance and transfers to ensure compliance Keep a real-time ledger of stakeholders in a company and issue reports
  • Act as an intermediary to issue dividends or payouts
  • Facilitate proxy votes and other communications with investors

Realtyum licenses its technology platform to individual issuers, fund managers, and investment banks to allow for:

  • Shareholder registry management platform for individual issuers
  • Capital formation platform for Broker Dealers and Multi-fund Managers
  • Asset lifecycle management for high-volume Issuers and Investment Banks

A critical element in any stakeholder data management platform, such as a fund administration system or cap table platform, is the uploading, storage, and indexing of documents. The Realtyum platform provides critical document management capabilities that support ongoing and routine functions including:

  • Investor documentation
  • Onboarding
  • Transaction reporting
  • KYC/AML/Accreditation
  • Support and other features as required

As part of the REIT onboarding process, Realtyum will ensure that all documents that support the fund and its investors are properly indexed and associated with the correct parties. This effort will involve the auditing of the ownership history and likely the necessity of historical data entry to support the presentation of a history of the REIT’s transactions.

Necessary components for this phase include a full history of the funds’ ownership in spreadsheet form, which includes dates, prices, amounts, dispositions, and other relevant transactional data. This data will be committed to chain as part of the auditable record of the fund history.

Investors who hold assets managed by Realtyum’s platform fund administrator will be able to see their history within the investor portal, accessible using standard credentials supported by the underlying Realtyum system. As investors transact, their holdings will be updated within this system.

Asset Data Transformation

Uploading Cap Table history and mapping to investor wallets (process referred to as ETL), and KYC/AML process will pass along key information needed for the Digital Security ecosystem, as platforms will integrate together for efficient data management and transfer. This will also help with cross-platform compliance, as Digital Asset distribution will require investors to be held to a certain standard involving KYC/AML/Accreditation.

Realtyum aims to improve investor communications between GPs, Fund Administrators, and stakeholders with a platform that can directly relay correct and verifiable information, where all third parties have access. This will improve transparency and communications across the board, saving time and money on investor relations.

Overall, the benefits Realtyum is implementing into the platform for improved Data transformation include: Establishment of Custody requirements/process; Creation of tradeable asset; Direct exchange/asset listing; Asset Trade testing; Investor consents; Final Investor KYC/AML/Accreditation and Badging; Fund process automation and documentation; Fund manager training and internal documentation; Test Transactions; Finalize listing/Pre register investors; Issuer and Investor direct communications at the conclusion of the completed onboarding.

Issuer/Investor Compliance

Prior to the onboarding of any REIT asset, issuers and investing parties will ascertain the proper ownership of the asset via standard diligence methods. Once this assurance has been obtained, and the structure of the fund has been established, the options for tokenization and the adherence to any specific compliance requirements can inform the implementation of the tokenized REIT on the Realtyum platform.

It is the responsibility of the REIT manager to communicate and share documents with the REIT investors. These communications come in the form of investment documents, dividends, disclosures, ownership statements, transaction receipts, and responses to various ad hoc requests, like copies of checks, K-1s, and other forms of tax-related correspondence.

The Realtyum platform will enable the distribution of shares, forms, consents, and messages for and between the REIT fund administrator and other relevant parties (legal, compliance, tax, investors, banks).

Cap Table & Ownership Diligence

An important responsibility of the REIT Manager is the maintenance of current and accurate records pertaining to ownership. Cap tables are one way of looking at this responsibility: they record the current and former ownership of shares in the asset.

A key component of the REIT fund is its cap table (share holder) registry. The platform utilizes Realtyum’s on-chain cap table and registry to record ownership and facilitate the trade, transfer or collateralization of any shares held by the REIT and its shareholders.

The Realtyum platform will manage the sensitive data related to shareholder ownership. As a registered Transfer Agent, Realtyum performs traditional investor relations activities using modern blockchain technology.

A critical component of Realtyum platform implementation is the creation of the digital distributed ledger that manages and issues digital shares representing the investor holdings – current and former – in the REIT. The Realtyum platform will modernize and reduce the cost for REIT Fund administration to the benefit of all relevant parties.

Keyless Custodial Wallets

Realtyum understands that novel technologies cannot present a steep learning curve and demand significant procedural changes of its users. As such, Realtyum simplifies the process for investors who, at a minimum, can navigate a brokerage platform account. One method is by creating Keyless Custodial Wallets.

These keyless custodial wallets that Realtyum is building will manage investor holdings in a comfortable, simple, and easy to use digital format.

A key factor driving mainstream adoption of tokenization will be masking the complexity and providing intuitive user experiences for investors who may get scared off by new tech and blockchain wallets with private keys.

The keyless custodial wallet will be functional by the connection of hot wallets (enables faster trading) to custodial cold wallets (enable security). This process will be taking place on the back end, while investors viewing on the front end will see a simple equity bearer interface.

THE REAL ESTATE EVOLUTION

The Liquidity

Perhaps the most discussed benefit of Tokenization is improved liquidity, specifically for assets that are illiquid or less liquid such as private REITs. Tokenization is looking to aid in increased liquidity for typically illiquid assets by creating marketplaces, lowering the barrier to become liquid, and creating capital access solutions for investors all through direct ownership and listability.

Illiquid assets, which includes most Real Estate, debt, company equity, collectables, and more, have no marketplace or capability to trade quickly. In order to sell illiquid assets as an investor, you must find a private buyer yourself and get approval from the General Partner, which is not an easy process.

Realtyum is currently working to improve the liquidity conditions for illiquid assets, specifically Real Estate.

Tokenization will allow for direct ownership and listing capabilities for the investor. The goal is for investors of illiquid assets to take their accessible equity, and in a compliant way, list it or offer it to secondary trading markets.

Tokenization also enhances the idea of fractional ownership, as not only will equity be listable directly by the investor, but the investor can sell any portion of their own equity. This will bring more investors to the table as there will be a lower barrier to entry to buy into these assets. Lastly, increased liquidity has shown to add value to assets, as tradeability is a desired feature of many investors. Many investors will pay a premium for liquid assets and reduced monetary friction.

Realtyum is also working to implement borrowing against tokenized equity. This will give investors immediate access to capital, which will expand the value of assets that were illiquid before. This is because many assets must go through a one year lockup period where trading is prohibited. The ability to borrow against tokenized equity will add another liquidity layer for investors, where they typically wouldn’t be able to trade.

BLOCKCHAIN FOR REAL ESTATE

THE REAL ESTATE EVOLUTION

Blockchain Applications

Much hype surrounds cryptocurrencies such as Bitcoin, one of the largest public blockchain networks, but cryptocurrencies represent only one application of blockchain technology.

From a construction and real estate industry perspective, especially real estate finance, blockchain’s potential lies in its ability to verify transactions between multiple parties and execute smart contracts through the lifetime of a particular construction project.

There are two big differences regarding how cryptocurrencies function and how blockchain applications in the construction industry will likely work.

One is that cryptocurrencies, and the blockchain upon which they are based, are publicly available instruments, whereas a distributed ledger to verify transactions and financing deals in the construction industry will likely be a private protocol accessed only by the parties involved.

Secondly, a construction-related blockchain will likely be connected to a small number of nodes – a connection to the network – while a cryptocurrency such as Bitcoin has around 10,000 reachable nodes, according to some estimates.

THE REAL ESTATE EVOLUTION

Privacy & Transparency

Data privacy is a major concern worldwide and it is no different for blockchain.

For real estate transactions, one of blockchain’s advantages is its encryption, but the industry nonetheless has concerns as to how to balance privacy with making sufficient details public – at least to regulatory authorities – to legally allow a transaction to be completed.

Blockchain is a distributed ledger that will retain a permanent, tamper-proof transaction record, which is one of its main advantages for real estate. Should the transaction ledger be shared across the entire industry network, it will promote transparency and help mini mise mistrust among industry players, speeding up the whole transaction process.

From a legal perspective, there will be a clash between individuals and entities wanting to remove certain data from the transaction record and those who want to maximize disclosure. One of the key developments will be to see how blockchain complies with privacy and data use.

THE REAL ESTATE EVOLUTION

Slashing Complexity

A great deal of data is generated during the lifecycle of a project in the construction sector.

There are serious leaks and gaps in both the origination of construction finance loans and management of loans. The current way of managing these transactions through extensive paperwork provides opportunities for fraud and negligence, whereas a shared ledger visible to all parties simultaneously vastly reduces the potential for malpractice.

Blockchain technology distributed on a private protocol can decrease complexity and, in effect, increase the speed of related transactions.

Our blockchain-powered platform aims to digitalize real estate investments through the use of tokens as digital assets. Apart from property investments, network participants should be also able to use tokens built on a smart contract for customer services such as smart leasing.

THE REAL ESTATE EVOLUTION

Contract Innovation

Looking at the real estate and construction sector from a legal perspective, blockchain will require fundamental changes to the way entities contract with each other.

Within the industry, people are comfortable dealing with a lot of paperwork, so a change of mindset will be required to convince them of the merits of switching to blockchain-enabled smart contracts.

That will not be straightforward because many common events that occur in construction projects are difficult to encapsulate in computer code. These include force majeure, new legislation or an on-site accident causing work to stop, for example.

For blockchain and smart contracts to become successful innovations in the construction industry, these new concepts must transform traditional contracts into something more innovative and useful.

THE REAL ESTATE EVOLUTION

Legislation & Smart Contracts

The integration of blockchain into contractual obligations will enable certain actions to be activated automatically, such as payment to a contractor when an agreed construction milestone has been reached, and evidence of this is then added to the shared ledger.

But lawmakers have yet to introduce legislation to make what happens on the blockchain legally binding. A lack of such legislation will hinder blockchain adoption across various industries. Incorporating blockchain into the construction and real estate sector will likely be difficult and face legal obstacles.

Legislation is required to create proper functioning of smart contracts and to govern how disputes relating to such contracts will be resolved.

One such area is the issue of digital signatures. Each transaction on blockchain proves that consent was given by its participants, however, for it to be legally binding, their digital signatures have to be accepted as such.

On a public blockchain network anyone can approve a transaction with a personally created signature. But where a qualified signature is needed for a business transaction on blockchain, participants may have to go through a costly and time consuming process in order to receive a certificate from a trusted service provider.

The entities would have to be under a constant watch by the certificate provider, which, as a result, may have to manage a large number of certificates, defeating the purpose of a permissionless decentralized ledger.

An advantage of blockchain is that it is not possible to delete past information stored in the shared ledger, putting it at odds with data protection laws in many countries.

The legal profession may try to oppose blockchain adoption, which could make large parts of the industry obsolete. Yet, from a legal perspective, smart contracts are an interesting new area of law.

As blockchain use increases, the legal industry’s challenge will be to incorporate traditional contractual models into software codes so that they can be executed without the need for a middleman. That may have implications for notary services, for example, with parties no longer required to be physically present to confirm their identity if their private identification data are integrated into a digital signature and securely stored on blockchain.

Lawyers will have to change from being draftsmen and advisers to individuals who can perhaps write code themselves or work with organizations such as IBM to determine how blockchain can be integrated into current and future legislation to create a proper transactional structure. Blockchain has already come a long way and deployment and adoption will accelerate over the next five years.

THE REAL ESTATE EVOLUTION

Legal Disputes

Poor record keeping is a major cause of disputes between companies involved in the construction sector, while disagreements over transactions and the release of funds are also common.

Yet resolving such disputes would be far simpler if every transaction or deal between a borrower, lending bank and other related parties were recorded on the blockchain.

For example, blockchain technology leader IBM has incorporated blockchain into its internal dispute resolution procedures within the company. This has cut the average time it takes to resolve a dispute from 40 days to 10 days, freeing up $100 million that had been allocated to settling such cases.

THE REAL ESTATE EVOLUTION

Property Listings

In the Real Estate sector, blockchain technology could be used to create a master ledger that will prevent duplication of property listings on sales websites.

In the United States, a property for sale is usually represented by a single Real Estate agent and for this arrangement to be registered with state authorities. Such practices do not exist in other countries where sellers tend to use multiple brokers in the hope of finding a buyer faster.

As the property market matures, the regulators will likely demand to know who is listing what. If so, the regulators will probably maintain a master database of property listings, for which blockchain would be the ideal host.

All property listings could be included on blockchain, with all parties feeding data into this ledger. Consequently, private listing services by Real Estate agents would be of little use, with the blockchain cutting out the middleman.

Blockchain puts all data in a place where everyone can access it in a structured manner. Currently, a property transaction will generate 300 pages of documents, but if all transaction participants were on the blockchain the sales process would become much simpler. In theory, hundreds of buyers could look at the property and contact the owner directly.

THE REAL ESTATE EVOLUTION

Blockchain in Contruction

Construction is a long-standing, traditional sector and as such change can be difficult to achieve – adopting blockchain technology will be tougher than in financial services, for example.

But as regulators start using blockchain to register deeds, payments and leases, this paradigm shift will trickle down to the contracting sector. Blockchain can be transformative for construction, but it will take time.

Experts forecast the use of blockchain in the real estate and construction sector will steadily expand over the next two to four years.

For general contractors, the benefits of this technology will be mainly around the use of smart contracts to interact with government authorities, various stakeholders and suppliers, and also provide transparency in the supply chain and payments.

In terms of payments, smart contracts should resolve much of the mistrust that exists between the client, contractor, subcontractors and suppliers.

THE REAL ESTATE EVOLUTION

Cryptocurrency Payments

Cryptocurrencies are unlikely to be used to make property or construction project payments in the near future. Adoption of cryptocurrency payments will probably mirror acceptance in wider society.

Among homeowners, their property is usually the most valuable asset they own and also their largest debt, having taken out a mortgage to buy it. The volatility in cryptocurrency prices means property developers, investors and lending banks will be unwilling to conduct real estate transactions in the likes of Bitcoin for the foreseeable future.

Extensive legislation – as well cryptocurrency price stability – will be required before cryptocurrencies become widely used to conduct construction and real estate transactions.

But smart contracts do not need to wait for cryptocurrency volatility to abate. All it will take is for a few like-minded banks to come together to provide smart contracts for stakeholders. Cryptocurrencies are a separate blockchain application and smart contracts do not have to be settled in cryptocurrencies.

THE REAL ESTATE EVOLUTION

Conclusion

Blockchain technology will be to transactions what the internet was to data.

It will provide companies with a completely different business model and change how firms fulfill contracts with each other, the webinar participants predicted.

Blockchain will enable businesses to achieve significant cost savings and speed up transactions, while also promoting transparency and trust through the use of the shared ledger, which will eliminate cumbersome paperwork.

However, new legislation is needed to guide the use of blockchain, smart contracts and dispute resolution before it can really take off. More time will be required for the construction sector to accept the new blockchain technology due to its “old school” traditionalist nature.

What will drive the regulatory change is a more widespread business use, experts believe. The more organizations start using and adapting this new technology, the more impetus there will be for regulators to catch up.

TARGETED STRATEGIC PARTNERSHIPS

Platforms/ Zillow

Whether you’re buying, selling, or browsing Zillow has something for you. If you’re listing a home on Zillow yourself, you’ll receive access to a sales proceeds calculator, your home’s “zestimated” value, a local news feed, and tools to help you price your home accurately.

Platforms/ Realtor.com

Sellers can calculate what their home’s worth, discover how to start the home-selling process, and learn how to select just the right agent for their needs. And, Realtor.com is licensed from the National Association of REALTORS®, so you can trust the content you find here.

Platforms/ Redfin

Redfin helps you sell your home for as low as a 1% listing fee. Their 2% Listing Fee service includes everything in the 1% plan, plus, a custom home improvement plan, vetted service providers, and cost coverage for project management, deep cleaning, professional staging, and decluttering.

Platforms/ Trulia

Trulia goes beyond static listings. They source insights from the people who live in your neighborhood to offer buyers neighborhood map overlays that provide deeper understanding of the community they’re buying into. See the prices of recently sold homes in your neighborhood and home values in your community. And, get advice from local real estate agents, brokers and others on Trulia Voices, their namesake real estate community.

Platforms/ MLS

MLS.com is a free Multiple Listing Service search for real estate MLS listings from licensed Realtors® and other real estate professionals that are members of their local MLS. List home for sale, new homes, resale homes, new construction, acreage, lots, land, commercial property, and investment property here.

Platforms/ PropertyRecord.com

Current property value, land value, number of bathrooms, and government property records are just a few of the details you’ll learn from this information aggregator. It might not be fancy, but it uses an advanced algorithm and real reviews to give you a high-quality report on any home you’d like to sell.

Agencies/ Realogy

Madison, NJ

Number of Offices: 673

Number of Agents: 53,100

2019 Sales Volume: $170,082,408,000

 

Agencies/ Compass

New York, NY

Number of Offices: 100

Number of Agents: 19,385

2019 Sales Volume: $91,271,740,000

 

Agencies/ Home Services of America

Minneapolis, MN

Number of Offices: 883

Number of Agents: 43,258

2019 Sales Volume: $132,304,589,270

 

Agencies/ EXP Realty

Bellingham, WA

Number of Offices: 100

Number of Agents: 39,058

2019 Sales Volume: $36,233,976,502

 

Agencies/ Redfin

Seattle, WA

Number of Offices: 50

Number of Agents: 1,526

2019 Sales Volume: $30,532,000,000

Agencies/ Douglas Elliman

New York, NY

Number of Offices: 102

Number of Agents: 6,698

2019 Sales Volume: $28,773,794,499

 

Top Agents/ Phil Rotondo

Coldwell Banker Realty

Palm Bay

FL

Top Agents/ Gwen Mills-Owen

CENTURY 21 Beggins Enterprises

Tampa

FL

Top Agents/ Missy Zecher

RE/MAX Professionals

Lake City

FL

Top Agents/ Paul Saperstein

EXP Realty

Boca Raton

FL

Top Agents/ Gerald Hayes

RE/MAX Anchor Realty

Punta Gorda

FL

Top Agents/ Laura Sanders

RE/MAX In Motion Inc

Coral Springs

FL

Developers/ Butters Group

Butters Group is a design-build, development and property management firm based in Coconut Creek, FL, currently led by CEO Mark Butters and CFO Malcolm Butters. Since its founding in 1990, the company has constructed more than 10 million square feet of commercial space in South Florida, and currently manages and leases 3.2 million square feet of property. The firm currently owns and manages a total of approximately 3 million square feet of commercial space, which is comprised of office, industrial, and retail facilities, from Atlanta to Miami.

Developers/ Civic Construction

Civic Construction is a company that has repeatedly proven it can keep up with the pace of booming urban developments in Miami’s high-end neighborhoods by creating luxurious spaces perfect for urban living. It has built a variety of high-rise, mid-rise, and multi-family developments and hospitality hotel projects throughout the city, as well as townhomes, custom luxury residences, restaurants and office buildings. Additionally, it has also done commercial, educational, and retail projects throughout the states of Florida and New York.

Developers/ Coastal Construction

Coastal Construction Group has become one the biggest names in construction, not only in Miami but across the country. It is one of the top 100 construction management companies in the country, with its myriad of commercial and residential projects and a distinguished list of public and private clients. In 2014, it was named Southeast Contractor of the Year by ENR, and was included in the South Florida Business Journal’s Top 100 Companies.

Developers/ First Florida

Miami-based general contractor First Florida started in the building industry in 1963 when the original owners of Burger King Corporation invited B.E. Miller to organize a construction company to build their restaurants throughout the United States. From there, it expanded its client base until it became the nation’s largest restaurant builder by 1982. The company continued its aggressive expansion program until it was constructing large commercial and industrial projects throughout Florida.

Developers/ Grycon

Grycon is one of the leading firms in the state of Florida that provides building and construction management. Its primary focus is on commercial, institutional, and residential buildings throughout the state. The firm has been named Contractor of the Year at the Latin Builders Association Awards.

Developers/ John Moriarty & Associates

John Moriarty and Associates is a general contracting and construction management company specializing in luxury residences along Miami’s beaches and high-end districts. The firm is constantly chosen by prolific developers to build the region’s most high-profile, complex and landmark projects, including commercial mixed-use projects, hotels, and luxury high residential buildings.

Architects/ A. Masow Architects

Scope of services: Architecture, Interior design

Types of Built Projects: Retail, Residential, Hospitality, commercial

Locations of Built Projects: Miami, New York, LA

Style of work: Modern, Aesthetic

 

Architects/ Archbop

Scope of services: Architecture, Planning, Interior design

Types of Built Projects: Retail, Residential, Hospitality, commercial

Locations of Built Projects: Florida

Style of work: Modern

 

Architects/ ATL Architecture

Scope of services: Architecture, Interior Design, Product design, and Landscape design

Types of Built Projects: Commercial, Residential, Hospitality, Retail

Locations of Built Projects: Florida

Style of work: Harmonious and Contemporary

Architects/ BEA Architects

Scope of services: Architecture, Interior Design, Master Planning

Types of Built Projects: Commercial, Mixed use, Residential, Cultural, Healthcare, Institutional, Transportation, Hospitality, Religious

Locations of Built Projects: Florida

Style of work: Contemporary and Traditional design

Architects/ Berenblum Busch

Scope of services: Architecture, Interior Design

Types of Built Projects: Residential, Commercial, Hospitality

Locations of Built Projects: Florida

Style of work: Creative & Innovative

 

Architects/ Borges Architects

Scope of services: Architecture, Interior Design, Master planning, Landscape design, Lighting design

Types of Built Projects: Residential, Commercial, Hospitality, Healthcare

Locations of Built Projects: United States, Europe & Middle East

Style of work: Functional & Innovative

TIMELINE

Q1 2021

Token Launch

Deployment of Realtyum BEP20 Smart Contract.

Q1 2021

Token Launch

Q2 2021

Website Launch & White Paper

Launch of website and official white paper.

Q2 2021

Website Launch & White Paper

Q3 2021

Marketing Strategy

Creation of an overarching marketing strategy; multiple partnerships with influencers forged.

Q3 2021

Marketing Strategy

Q4 2021

Realtyum Class A Token Launch

Deployment of Realtyum Class A Smart Contract with large LP and advanced security features.

Q4 2021

Realtyum Class A Token Launch

Q1 2022

Corporate Entity

Establishment of corporate entity to fortify our strategic partnerships model.

Q1 2022

Corporate Entity

Q2 2022

Platform Development

Develop the Realtyum Real Estate Platform.

Q2 2022

Platform Development

Q3 2022

Listings

Confirmation of CoinGecko and CoinMarketCap listing.

Q3 2022

Listings

Q4 2022

Major Exchanges Listing

Crowdfunding for registration and listing in major exchanges.

Q4 2022

Major Exchanges Listing

Q1 2023

Corporate Partnerships

Forging of corporate partnerships.

Q1 2023

Corporate Partnerships

Q2 2023

Press Release

Global Press Release outlining confirmed launches in major exchanges.

Q2 2023

Press Release

Q3 2023

Platform Launch

Launch of the Realtyum Platform.

Q3 2023

Platform Launch

Q4 2023

Diversification

Diversification into real-life applications.

Q4 2023

Diversification

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