Don’t Pay Us Back. We Pay Ourselves.
Real estate startup Loftium can teach us about Blocksquare
Loftium’s down payment is yours to keep. You don’t pay us back — we pay ourselves back through the Airbnb income. There’s no interest rate.
So begins the explanation of how Loftium works.
In brief, it works like this: you borrow money from Loftium to buy a house. Funds can be used to beef up your down payment or cover closing costs. Loftium gives you tools to become a successful Airbnb host so you can pay them back.
“What tools?” you ask. Certainly this must involve more work. (Oh, no, do I have show tourists my favorite coffee shop again and again just to pay my mortgage?)
Well, some proprietary software with dynamic pricing, to start.
Add on that some automation tools for tasks you have to do with each booking. For example: welcoming your guests, outlining house rules, and thanking them for their visit. Oh and yes, recommending your favorite coffee shop.
This makes sense. You want to earn the most you can on your extra room and so does Loftium. The game is to rent out the room as much as possible, for as much as possible, until the funds are repaid. In fact, if you accept their financing you agree to take just a few days off each year (eight, I think).
The rest of the year you’re slinging Air and B and B like a short order cook. That’s okay. Now you own a home in a hot market.
And you know what? I think this is an awesome idea. I sincerely hope Loftium expands east from Seattle. It fills a real need for city residents wishing to become homeowners and offers another housing option for travelers.
Real Estate Foundational Technology, New Ideas on Top
Loftium is a great example of innovation built on top of foundational technology.
In this case, the Airbnb platform provides the primary value.
Loftium then adds additional value. First, they legitimize Airbnb as funding source before the real estate is purchased, not after. Funds are extended based on what Loftium’s algorithm deems is the Airbnb market value for a portion of your house. Second, the repayment period is not based on a common metric — interest — but on access. In this case, access to cash flow. As our real estate needs evolve, so should the structure of our financial agreements. Third, homeowners gain a competitive edge over other Airbnb hosts thanks to dynamic pricing (cha-ching!) and automation tools for basic tasks.
Blockchain, and specifically Blocksquare fans, know where this is going.
Build a solid foundation and you seed an ecosystem.
Blocksquare, PropTokens, and BST
Loftium is instructive because it allows us to imagine similar possibilities for Blocksquare.
In this example Blocksquare is like Airbnb. Blocksquare is the foundational technology that creates initial value.
First, the PropTokens.
Blocksquare issues PropTokens on the blockchain. These are the Ethereum-based smart contracts that govern each individual property. These contracts will be written to execute based on any number of situations, such as ownership change or regular distribution of dividends.
PropTokens will be written for the public Blocksquare blockchain. Or, PropTokens can be privatized, using the Blocksquare infrastructure but with greater privacy.
Second, the BST.
BST is what powers the system. This is token that will be exchanged internally, as well as on the open market.
Magpie Lover explains:
BST tokens are ERC20 standard tokens that power the Blocksquare platform. The following facts drive the intrinsic value of the BST token :
BST tokens are required by licensed real estate professionals to make use of real estate tokenization tools and create PropToken Generation Events.
The rent generated from the real estate assets are renumerated to the stakeholders in BST tokens.
BST tokens are hence expected to gain in demand as the network of tokenized real estate properties grows.
No doubt: building all of the above is a massive undertaking. After all, Blocksquare isn’t one startup in one country. The ambitions are far bigger.
The ambition is to be a worldwide, blockchain-based platform for buying and selling commercial real estate.
Sound fanciful or remote? Consider your reaction when you first heard about Airbnb. Share my house? With a stranger? No way…
…and then?
Once Blocksquare is up and running, what new startups will be built on top of it? What value will they enhance for real estate owners or investors?
It is an exciting future.
I am volunteering as a Blocksquare Ambassador. You can still invest in the upcoming A-Series token sale.
Check out the following resources for more information on Blocksquare:
One Page Doc → go.blocksquare.io/onepager
Whitepaper → go.blocksquare.io/whitepaper
Proof of Title Paper → go.blocksquare.io/proofoftitle
Help Documentation → go.blocksquare.io/helpdocs
