EVEN crosschain technology for real estate industry
● Automation of the real estate market is a hot topic all over the world. From 2008 to 2017, according to Deloitte, the volume of investments in this area increased by 14 times, and the number of various startups increased from 176 to 1,274.
● According to the World Bank, the global real estate market is about $217 trillion, of which 75% is residential real estate. The global real estate market accounts for more than half the value of all major assets in the world, but it is extremely illiquid. This leads to lower prices and the lower number of transactions. Annual turnover of the global real estate market reaches $900 billion, including $340 billion in cross-border transactions that are crucial for countries such as Dubai.
To date, the areas of application of blockchain technology in the real estate sector are defined, but are rarely represented by practical cases. The first possible directions of using this technology were outlined only at the theoretical level, while practical and ready for mass implementation solutions still require careful study.
With implementation of this technology, all service providers, contracts, regulatory authorities, administrators, etc. can be combined into a single decentralized network. With the implementation of the functionality of IoT, you can imagine a number of possible applications. If you need to create a public database on a network with a low level of reliability of participants, but with the requirement of open access for many users, blockchain may be the best option.
Smart city
Smart city as a designation given to a city that incorporates information and communication technologies (ICT) to enhance the quality and performance of urban services such as energy, transportation, and utilities to reduce resource consumption, wastage and overall costs.
The area is connected with Internet of things technologies, smart devices and sensors, as well as with the management of common property. General principle: the distributed database contains the data on pricing, generation and resource consumption. Also, the devices can be autonomously controlled on the basis of a smart contracts. The advantages of the blockchain: security, autonomy, immutability, the ability to account and transfer value.
The security is crucial for the smart city use case. Blockchain can protect the smart city system from major threats:
The following threat categories are identified for the smart cities:
● Threats on Availability- are concerned with the (unauthorised) upholding of resources,
● Threats on Integrity- include unauthorized change to data such as manipulation and corruption of information,
●Threats on Confidentiality- include disclose of sensitive information by unauthorized entity,
● Threats on Authenticity- are concerned with gaining unauthorized access to resource and sensitive information, and
● Threats on Accountability include denial of transmission or reception of a message by the corresponding entity.
Projects and companies
● The Smart City Blueprint for Hong Kong, by Smart Government Innovation Lab: In the “Hong Kong Smart City Blueprint”, the Government has proposed promoting Fintech initiatives and exploring the application of distributed ledger technology (DLT) in different areas, such as trade financing and cross-boundary remittances.
● “Smart City Sweden”, “Dubai Smart City 2021”, India’s “Smart Cities Mission”, Singapore — a “Smart Nation”, E-Estonia
● Community coins, Thrupny and EMAAR, to account the consumption of shared resources by residents.
● In April 2016, in New York, for the first time, a test of the system of selling electricity produced in a decentralized manner, directly by one neighbor to another via blockchain system was conducted.
● Power-peers: Selling of electricity in the network P2P Exergy. Distributed servers for home heating; bills for consumed thermal energy are billed using blockchain technology
● Brooklyn Microgrid Pilot project, bringing together the 10 households in Brooklyn within microgrid based on blockchain technology
EVEN advantages
● The light DAG technology allows the even weak devices to be used as network nodes.
● Free and fast operation suitable for microtransactions.
● Cross-chain will allow to combine existing projects into a single system that is convenient for both users and suppliers.
Workflows
The whole process from the selection of real estate, verification of documents, registration of transactions between its participants, registration of mortgages, transfer of funds and the registration of property rights, can be automated, optimized and simplified with the help of blockchain. Blockchain implementation for real estate workflow in Hong Kong:
● Hong Kong: Announced March 2019, New World Development collaborated with the Hong Kong Applied Science and Technology Research Institute Company Limited (ASTRI) and the Bank of China to launch the first property-purchase blockchain platform.
Such processes involve many participants who may use their custom blockchain systems on separate processes of workflow: real estate database, database of owners and buyers, banks’ database and property state registrars. Data exchange and smart contract executions are required between them. That’s what EVEN can accomplish.
Registration of property transactions
The implementation of this case requires the involvement of public authorities. The result of blockchain implementation in this area will be improvement of registration and verification processes, acceleration of transactions and security of all involved parties.
Projects and companies
● In Russia Enterprise blockchain Vostok, the state Registrar of real estate the Federal registration service, company DOM.RF and VEB.RF Bank are engaged in the development of the project on registration of transactions on the blockchain. A pilot project was planned in Veliky Novgorod.
● According the Smart Dubai Office plan, the blockchain technology will be used to manage all government documentation by 2020. This is especially important for the real estate sector.
● In the United States, for example, Vermont, Delaware, Nevada and Illinois, have already passed legislation that helps to recognize smart contracts in real estate transactions.
Mortgage
First, blockchain will help to keep records more accurately. Secondly, the blockchain will give banks and customers proof that the money was sent on time. Smart contracts will speed up the process of paperwork. Blockchain will help to track the maturity of the mortgage loan. When purchasing a real estate on the secondary market, buyer can use blockchain to verify the information about the owner of the property.
The electronic mortgages based on blockchain technology will minimize the costs of mortgage workflow, reduce the time required for securitization of mortgage transactions, increase the turnover of credit resources, and ensure the protection of the interests of all participants in mortgage transactions from fraud. Reducing the risks of creditor banks, as well as their costs when working with e-mortgages, the positive effect of its implementation for the procedure of issuing mortgage securities, in our opinion, will eventually have to affect the reduction of the interest rate on mortgage loans, which, of course, will be beneficial to potential borrowers.
Projects and companies
● The Russian Association of cryptocurrencies and blockchain (RAKIB) has already joined the development of digital mortgages. The committee created by them, which included representatives of the largest banks and DOM.RF, should work out the procedure for issuing a mortgage on the basis of blockchain technology.
● In 2017, ANZ and Westpac partnered with IBM and shopping centre operator Scentre Group to use blockchain technology instead of paper bank guarantees on commercial property leasing.
● Australian-based software company Moneycatcha is trialling its blockchain regulatory system, Regchain, with HSBC Australia. Regchain help to ensure banks and brokers are meeting the regulatory requirements set out by the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA).
Transactions without intermediaries
Property search and Due Diligence without intermediaries.
Projects and companies
● Projects such as the American Deedcoin (Deed) and Etheera (ETA) from Switzerland suggest the creation of a decentralized platform on the blockchain for transactions in the real estate market.
● The service Deedcoin helps to control the main processes directly by buyers and sellers that will allow them to minimize the fee for transactions up to 1%.
● Using the platform Etheera you can buy, rent apartments, rooms, including Bed & Breakfast category.
● Zillow Company
● Propy listing
EVEN advantages
As a cross-chain solution, we can organize the exchange between distributed databases and increase liquidity.
Tokenization of assets
Investors can invest different amounts and own parts of the property without the involvement of banks or agents, and then owners can use their property for effective earnings.
Projects and companies
● BitProperty with the REIT token. It allows casual investors to own a digital share of physical real estate with dividends (rental income, etc.). The platform presents itself as a marketplace for the creation, purchase and sale of tokenized rights.
● CrowdVilla (CRV) is a project from Singapore developing area of joint ownership of property. On investment Crowdvilla buying villas for recreation, which will then be passed on to users — the owners of the assets. In the future, users will be able to use the housing for rent and profit from it.
Summary
Blockchain technology has already started to be used in the real estate market.
● Real estate catalogues
● Transactions
● Property registration
● Mortgages and construction founding
● Operation and maintenance
All areas and all stages of the life cycle have their own requirements to blockchain systems. Some of them should be fast and easy, others should store large amounts of data. Some need tokens, others need complex smart contracts, but there is no need for tokens. Market requires private and public blockchains. There are security requirements, but priorities are different.
All these different systems must interact according to certain rules. This challenge EVEN Network resolves. It is a light and secure decentralized cross-chain network. It can transmit among external blockchains tokens, data, conduct crosscan-smart contracts. In EVEN Network you can create private and public blockchains, issue tokens, create simple and complex smart contracts.
