Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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TechCrunch Founder on Selling His Apartment as an NFT in Groundbreaking Deal
BeINCrypto | | Jun 8, 2021
BeinCrypto spoke to TechCrunch Founder Michael Arrington and CEO of Propy, Natalia Karayaneva, about their latest venture — selling Arrington’s apartment as a non-fungible token (NFT).
NFTs have been big in 2021 but are mostly relegated to the world of digital art. This has been hugely successful but also brought up questions about other real-world applications for these tokens.
Some have speculated ways in which the ownership inherent in NFTs can be applied to various spaces. However, much of this has taken place online, with a big focus on using NFTs to provide ownership to virtual products. These include items like clothing or weapons to virtual real estate.
See: Tokenizing Assets and Unlocking Value on the Blockchain
Now, Karayaneva and Arrington are providing a real-world answer, with the first-ever real estate NFT.
Arrington’s studio apartment in Kiev is about to be sold as an NFT to the highest bidder. Starting at $20,000, the collection includes access to ownership transferred paperwork, the apartment picture, and a unique digital artwork NFT by Kiev artist, Chizz.
This is also no average apartment. Arrington bought the property as part of the first-ever blockchain-based real estate sale back in 2017 by Propy.
How to make a property an NFT
Figuring out how to make real estate into an NFT was the challenge that faced Propy and Arrington during this process. While it may just seem like the title deeds could be tokenized, this is not the case.
Rather the solution found was to make the property hold the title in a legal entity, an LLC, or a trust. From here, Karayaneva’s company helps draw up the paperwork to create the NFT.
“We’ll send the paperwork to the transaction platform on Propy, the homeowner will sign this paperwork, and this paperwork will ‘NFT the property,'” she explains.
However, once completed, the property can only be transferred as an NFT. Karayaneva explains,
“The only way the homeowner can transfer the property in the future will be only the NFT, the owner won’t be able to sell it traditionally, or just put other owners in the LLC paperwork. But the main thing is that once they sign this paperwork on our property transaction platform, this homeownership will live on-chain on the NFT level, it’s all digital, and it was exclusively on the NFT.”
Having the property as an LLC is a key shift in property ownership and sales.
See: How Fintech is Eating Real Estate - FFCON21 talk, CEO Key Daniel Dubois
“This is the fundamental change we’re doing in the real estate industry where we have detached homeownership from the county. Once the county has the record of the LLC, then all the future trades are happening via property, changing the LLC owners,” says Karayaneva.
“So we don’t sell it from LLC to another LLC, but rather we change owners of this LLC. Thus, we are fully independent of county records and the title of the ownership.”
“Transfer is done fully using data via blockchain, which means it’s immutable. It’s unhackable, and so on.”
Continue to the full article --> here
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