Dominium Article Series: Problems & Solution for the Real Estate Market
For many years, real estate is considered one of the best investment choice. Unlike any other investment options, there is a high probability that investing in any real estate asset will give you a great return. Unlike crypto or other assets, real estate doesn’t have a high volatility or prone to inflation, while the rate of return usually increasing every year. Because of that, almost everybody understands that investing in property or real estate is a good choice.
Currently, there are several ways for you to participate in real estate investment. First, and the most common way is to buy an asset, such as house or building and then rent it to other people. Another way is to buy a real estate ETF, a collection of bonds or stocks in a single fund targeting real estate developments in an exchange. The next one is REIT or real estate investment trust, where you invest in a real estate company. Buying a REIT means you’re indirectly investing in a real estate business itself.
A statistics of 2014 Global Real Estate Industry. Old, but still relevant. Realize that there is an increase in overall real estate cap. Source: World Property Journal
However, that great opportunity isn’t being followed by the ease of participation. There are some key problems in the current real estate market that limits the participation from new users. It’s hard to use real-estate as a short or mid-term investment choice because the liquidity is so low. Investing in real estate is equal to bearing a great risk in short & mid-term because you can’t sell your assets immediately. At some point, you might feel like you’re gambling with the future because there’s no guarantee that you’re still alive when your assets can be sold.
Not only there is a low liquidity in the real estate market, the barrier to entry is also high. You must have a great amount of money to start. You can also choose to join together with your friends to invest together, but this will bring up another problem. At some point, it kinda looks like investing in real estate is only for those who’re already rich. Which is funny because at the same time the opportunity for middle & lower class to join will significantly decrease.
The usual classic of transparency problems and management of data presents in almost every traditional market is also present in the real estate industry. Many experts and media already mentioned that blockchain could solve those problems. To put it simply, bringing blockchain to real estate industry can improve the speed of transactions, remove unnecessary middlemen and reduce the risk of data theft or forgery significantly. Because there is yet a solution applied to solve those problems, bringing blockchain should be a great option to try. Which is what Dominium aims to do.
Globalization is considered as one major trend affecting real estate industry. Bringing more money into the market. Source: Valuewalk
The Solution: Dominium in a Nutshell
Dominium is a real estate blockchain solution. It offers two main services to solves the problems described above. The first platform or service is created for real estate investment, and the second platform is for property management. Dominium will place listings, property finance, and property management on the blockchain network via a multi-lingual platform following the standard regulation.
Dominium first services will solve the problem of investment access. In this platform, everybody, as long as they pass the KYC/AML process can participate in the market with at least one share or token. This removes the high-entry barrier of the current investment market where everybody can’t participate equally. The deal will happen through a decentralized exchange, that means everybody will be able to buy or sell it directly to other parties without any middlemen in between.
Increase on population. Another reason why real estate industries have so much potential to grow. Source: Valuewalk
The second platform will be useful for property manager, agents, or others professional and asset owners. Using Dominium, they will be able to record and get the information from the Dominum blockchain. The information is guaranteed and fully transparent. By using the platform, they can manage the assets easily and therefore reducing the workload and at the same time make the rental business run smoother than ever.
In order to use the platform, every user must undergo a verification or KYC/AML process. This needs to be done to avoid suspicious financial activities on the platform, and to help the government cath any member found to be abusing or doing a suspicious activity. There will be three level of the identification process. The basic level includes an email address, mobile phone, and ID verification. The higher the clearance level the more document required to pass the level.
Blockchain and related technologies make Dominium has more advantages compared to traditional real estate platform.
Dominium will use NXT blockchain technology. It will use the Ardor Blockchain-as-a-Service platform and its child chains. Because child chains are distinct blockchain created for business, Dominium will be able to use it as the back-end for managing records, property finance, property listing, and etc as maximum as possible. This will solve the problem with property management in the current real estate market, and change the way you participate in the real estate industry.
The potential of the real estate market needs an additional follow up where everybody can participate without any problems. We also need a better platform to manage property asset for professionals or assets owners. Blockchain and cryptocurrency has that potential, and Dominium is there. The two services that Dominium offers can help professionals or users to manage, transfer, rent or buy any real estate that they want without any complexities. Unlocking the true value of real estate industry.
Note: This article is not a financial recommendation. The author, Dominium and other parties mentioned in this article is a separate entity. The author writes this article based on his own understanding of Dominium. Readers should read the original document of Dominium by themselves. The author shouldn’t be responsible for any actions taken by the readers, including but not limited to: joining the Dominium bounty program, participate in Dominium token sale, and etc.
Important links that you should check:
Dominium Website: https://dominium.me/