The real estate sector may have caught a glimpse of its potential future recently. Because in Columbia, South Carolina (USA), real estate agent Rovestock owns a three-bedroom house in NFT exchange OpenSea has been sold. The buyer paid a good sum of $175,000 to purchase the home. The corresponding payment service provider processed the purchase using the USD stablecoin (USDC).
The background to the deal is particularly interesting, because the buyer financed their home with the help of a decentralized lending market. This process could become the dominant method of real estate purchase and a driver of mass adoption.
Cryptocurrency real estate financing
Lending service operating on Polygon’USDC HomesIt was used to finance the property. Home purchase open c It can be paid in full directly with ETH, but as in the physical world, not everyone can make such sums at once.
So users can apply for a “crypto loan” on USDC homes. The application as well as the user’s creditworthiness is checked “off the chain” by the insurance company and other data providers. If successful, the user joins the USDC Homes pool from which they borrow money to buy the home. Those who prefer to earn a return can offer crypto to the pool, as is common on other lending platforms. This works on the DeFi platform.Dish“.
According to USDC Homes, the advantages are clear: Users can buy properties with cryptocurrency quite easily and only pay a one-time fee. This process is also more efficient, as many middlemen are eliminated and thus a long list of applications and paperwork.
Roofstock manages real estate and issues NFT on Ethereum, which represents home ownership after purchase. The loan creditor, debtor, and pool operator all hold access keys to the multisig wallet. Only when the buyer pays the home plus interest does he or she have sole access to the wallet and the NFT.
Therefore, the ownership can only pass to the buyer with the confirmation of the creditor. So the creditors are at least homes, according to the USDC adequately protected. However, the security risk of their digital property is borne by the purchaser after full payment. But what if his wallet was hacked or otherwise compromised?
According to Sanjay Raghavan, Head of Web 3.0 Affairs at Rovestocks, NFTs can only be transferred to users who, in turn, own a non-transferable NFT. Roofstock only gives this to registered members who have previously verified their identity. In the event of a loss, ownership can be confirmed and a new NFT set. So no one should undress first.
Buying a home is not quite as decentralized as it is on well-known DeFi platforms. However, for buyers and brokers, the process is more efficient in some places. In addition, users have the opportunity to generate revenue via the teller pool, which is otherwise reserved for the traditional financial sector.
The final question is whether users will have a real incentive to buy homes with cryptocurrency. Will mass adoption buy cryptocurrency a home, or vice versa?
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