Problem

The economic scenario in developing countries is an issue for real estate, high interest rates (over mortgages) and high deposit upfront (downpayment) to finance a property. In Brazil, for example, the interest rate is over 10% and the deposit upfront is at least 20% of the property value. So, it’s not easy to have money to buy a property to live in or even to rent for someone else.

Solution

Blockestate can offer to future owners a possibility to get part of a crowdfunding for a property and be a platform for renters to find good values in the market for short rental travels.

Using blockchain, it is possible to tokenize a property, making a crowdfunding to buy a property and to give people a share of a future rent money for example. Moreover, the use of less capital can permit owners to have less risk and then make the rent value more competitive to the market. The scenario of high interest rates in developing countries can permit leveraging the high interest rate scenario for owners of other parts of the world. In this way, everyone can earn money until they get their own house.

Technology

The use of ERC 404 can support the solution in this way:

• Everyone in the crowdfunding is a token holder and receive rent money accordingly with the share of the property value tokenized;
• If someone has 5% of the property value, then the owner can mint a NFT;
• The NFT holders can create proposals (to manage, increase rent, sell the property for example) and define aspects such as cleaning and maintenance services;
• NFT holders can have a discount in the rent based on the amount of share they have (if I have 10% of the property, so 10% of discount)
• The platform has mechanisms such as poison pill to guarantee it will be everything alright with the relationship between NFT holders.

This facilitates the operational flow and then the use of ERC 6551 provides a safe way to rent the property to a specific user.