AssetBlock and Algorand: Modernizing Real Estate Investment and Leveraging Digital Assets
Industry Segment: Real Estate & Financial Services
The Company
AssetBlock was founded in 2018 with the belief that new foundational technology will enable more secure, accessible, and efficient investments in the real estate market. By increasing access to more high-performing investment opportunities and lowering the cost of capital for professionals across asset classes, AssetBlock believes the private securities market can shift towards a more open and efficient economy.
The Challenge
While being the world’s largest asset class, real estate investment opportunities are often difficult to access, complex, and opaque, With 80 percent of the U.S. commercial real estate market controlled by institutional investors, everyone ranging from high-net-worth individuals and family offices to individuals with less disposable capital are often excluded from high quality investment opportunities. Even when investments are considered, high fees, restricted liquidity, and lack of transparency can make investing a challenge. Furthermore, the majority of private real estate investment takes place completely offline, which makes it slow, error-prone, expensive, and inefficient.
In parallel, digital asset holders want to leverage the underlying value of their digital holdings but are limited to leverage only other digital assets. Combining digital with physical assets allows for a highly diversified portfolio creation that unlocks a broader array of beneficial loan terms resembling the more traditional financial services markets over crypto-only markets.
The Solution
With a new perspective on real estate investment focusing on accessibility, accountability, and efficiency, AssetBlock has set out to simultaneously solve the challenges currently facing real estate investors and digital asset holders. AssetBlock creates a unique offering by combining real estate investment with digital asset-based lending.
In a single integrated solution, the platform creates a symbiotic ecosystem between:
● Private investors and family offices seeking real estate investment
● Real estate partners seeking to lower their cost of capital
● Digital asset holders seeking diversification while maintaining their positions
● Lenders seeking yield, capital deployment and liability limitation
AssetBlock connects private investors with previously-gated real estate investments formerly only accessible by institutional investors. With a more thoughtful approach focusing on usability, analysis, and transparency, they can invest in curated real estate opportunities from world-class partners from a single location. These investors benefit from a digital-first platform that removes error-prone, paper-based processes, making transactions faster, cheaper, and more efficient compared to traditional private placements. Additionally, by decreasing the transaction costs, Asset Block enables real estate projects that were not commercially viable previously under existing cost structures.
For digital asset holders, AssetBlock offers cross-collateralized loans for purchasing real estate investments without liquidating any of their digital assets. These loans are collateralized with both the digital assets and the real estate that is purchased with the loan. This combination of digital and physical assets as collateral lowers the risk to the lender when compared to a single source of collateral. The lower risk profile then in turn allows the lender to make the loan at a lower rate, which benefits the borrower with lower costs. These loans allow digital asset holders to stay invested in cryptocurrency and benefit from potential appreciation, while diversifying their portfolio with real estate. Through cutting-edge technology, they can achieve earlier potential liquidity.
Algorand is the foundational blockchain technology for AssetBlock, ensuring that accuracy, access, transparency, and best-in-class security standards are met. Algorand serves as a record of ownership of real estate assets, asset-related information, proof of loan transactions, and key loan documents. Like Algorand, AssetBlock believes in a global, borderless economy accessible to anyone, no matter who or where they are.
The AssetBlock team partnered with Algorand first and foremost due to its world-renowned team of researchers. “Their technical mastery, combined with an experienced business leadership team and a vision for the borderless economy, were a perfect complement to AssetBlock,” said Mike Liddell, CEO of AssetBlock. “The Algorand platform is the only technology that can ensure the accuracy, transparency, and best-in-class security that’s required to bring accessibility and efficiency to real estate investment.”
The Benefits
Together, AssetBlock and Algorand bring significant benefits to all parties in the ecosystem. Investors gain access to high-quality real estate opportunities with smaller minimums, compelling return potential, and low fees. On the lending side, investors with digital assets are able to diversify their portfolio with real estate without risking the potential return.
This modern approach opens up new sources of capital for real estate partners, which helps them grow their businesses. Each capital raise is simple and efficient with flexible terms per deal. And lenders earn high rates of return while gaining cryptocurrency exposure and reduce downside risk through cross-collateralized loans that include less volatile real estate investment.
“Algorand’s technical mastery, combined with an experienced business leadership team and a vision for the borderless economy, were a perfect complement to AssetBlock. The Algorand platform is the only technology that can ensure the accuracy, transparency, and best-in-class security that’s required to bring accessibility and efficiency to real estate investment.”
- Mike Liddell, CEO, AssetBlock
