A crypto-based multi-channel fractional real estate platform

Before we get into what a crypto-based functional multi-channel fractional real estate platform is, let us have an overview of what cryptocurrency, real estate, the Metaverse, and fractional ownership ?are:

What are cryptocurrencies?

Cryptocurrencies are digital currencies created to work as a medium of exchange. Cryptocurrencies are not physical cash that can be carried around, and they can also be referred to as virtual currency. It is decentralized and is based on a blockchain protocol. The blockchain is a digital ledger that contains information on different transactions distributed to all its users. Since cryptocurrencies are decentralized, it makes them immune to government influence or interference.

The first form of cryptocurrency is the infamous bitcoin, even though other ones have been formed over time by modifications made from the limitations of bitcoin; an example is ethereum. Although crypto is decentralized, it is also volatile, which is a major disadvantage.

What is real estate?

According to Investopedia, real estate is a class of real property that includes land, and anything permanently attached to it, whether natural or artificial. There are five main categories of real estate: residential, commercial, industrial, raw land, and special use.

Residential real estate: are properties used for residential purposes, for instance, duplexes

Commercial real estate: are properties used for business purposes such as hotels, restaurants

Industrial real estate: are properties used for manufacturing, production, and storage, e.g., power plant and factories

Raw land includes: undeveloped property, vacant and also agricultural land

Special use real estate: includes properties used by the public such as libraries, worship places

Real estate has physical characteristics like the physical surface of land and everything that lies within the land which is permanently attached to it, and economic characteristics like the right of ownership, including the right to possess, sell and lease the land that determines its value

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Physical characteristics

a. Immobility: the locations are not movable.

b. Uniqueness: no two parcels of land are the same.

c. It is indestructible.

Economic characteristics

a. Scarcity: the fact that the total supply of land is fixed, scarcity is a major factor contributing to its financial value.

b. Value: the structures or properties surrounding a piece of land adds to its economic value.

c. The permanence of investment: once the land is improved, the total capital and labor used to build the improvement represent a sizable, fixed investment.

d. Location/ area preference: location of land adds value to it. Also, people’s preferences and tastes affect the economic value of a piece of land.

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What is the Metaverse?

The Metaverse is an exponentially growing simulated environment that uses a combination of technologies like augmented reality, virtual reality, and mixed reality to create spaces for rich social interactions among its users while also mimicking the real world. Hence, it is a combination of the real world and virtual worlds. In the Metaverse, people will be able to create their worlds how they deem fit based on their experiences and knowledge.

What is fractional ownership in real estate?

This is a method or an investment structure in which unrelated parties can share and mitigate the risk of ownership of expensive or high-value assets. Fractional ownership is a form of collaborative structure where the overall cost of a property is split among a group of owners. Fractional ownership entails the percentage share of an expensive asset. Typically, a company manages the assets for the owners, who in turn pay for the services rendered.

Pros and cons of fractional ownership

Pros: the main advantage is that it is easier to achieve than shared ownership, and it is also preferable to renting. You can also increase your share of the property up to a hundred percent through stair casing.

Cons: in fractional ownership, you are not allowed to sublet a shared ownership property unless you have staircased to a hundred percent. Also, shared ownership is leasehold, and homes with a short lease (less than 80 years) become increasingly hard to sell. Likewise, you have to pay a service charge to cover the maintenance of communal parts of the property. Finally, you are still a tenant until you have stair cased to a hundred percent.

Now that you have a better understanding of these terms, what is a crypto-based multi-channel fractional real estate platform?

This is a platform that makes use of digital currencies like cryptocurrencies, e.g., bitcoin, to pay for real property like lands. It can be found on the Metaverse, an exponentially growing stimulated digital environment that makes use of technologies. Its ownership is shared, hence the term fractional ownership, and it is marketed through several media channels to spread marketing messages. Examples of such platforms on the Metaverse include: Decentraland, Theta network, The Sandbox, Axie Infinity, stacks, etc. virtual land NFTs are created?using smart contracts that allocate ownership and control the NFTs' transferability. Whenever anyone produces or mints an NFT, they run code included in smart contracts that adhere to several standards, including ERC-721.

In these platforms, the land is permanently owned by the community; users claim ownership of virtual land on a blockchain-based ledger of parcels. These lands are acquired by spending tokens peculiar to a platform. For instance, you can only purchase land on Decentraland using MANA. A centralized organization does not control these platforms. This means that there is no single agent with the power to modify the rules of the software, contents of land, and economics of the currency (token) or prevent others from accessing it.

Why invest in Metaverse real estate?

Early speculators, professional real estate agents, and celebrities are buying up land that exists in digital worlds; they are investing in Metaverse real estate. While all stock investing carries risk, and it is impossible to predict stock gain or loss, Bloomberg analysts estimate that the Metaverse will grow to be worth nearly $800 billion by 2024, up from their $478.7 billion in their 2020 evaluation.

Use cases of virtual real estate

1.??????Content curation: users with shared interests gather in the same neighborhood.

2.??????Advertising: brands may advertise using billboards near land parcels to promote their products and services

3.??????Digital collectibles: users can publish, distribute, and collect rare digital assets issued on the blockchain by their creators

4.??????Groups that are currently on different platforms can put their communities into the platform.

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