What’s Important
- Propy is selling a tokenized condominium in Hawaii starting January 29.
- Buyers can take out loans using Bitcoin and Ether as collateral.
- The tokenization process lasts around two weeks.
The Opportunity
Could you use your Bitcoin or Ether as collateral for purchasing a home? This is the vision behind Propy’s initiative, which includes a condo sale in Honolulu, Hawaii with an initial price of $250,000. Buyers have the option to secure a loan from Propy, provided they offer full collateral in cryptocurrency and pledge the property itself.
“It’s a great proposition for Bitcoin holders,” Natalia Karayaneva, CEO of Propy, shared in a discussion. “It’s not a taxable event. They can get a loan and buy real estate without cashing out to pay taxes first.”
The loan duration is two years with an annual interest rate of 10%. A significant risk involves margin calls if the cryptocurrency’s value decreases by more than 50%. Conversely, if the value doubles, buyers could repay the loan using their profits. Payments can be made in Bitcoin, Ether, or USDC.
The Process of Tokenization
Propy aims to enhance real estate transactions using blockchain technology, which can expedite settlements significantly. For the Hawaiian property set for sale, loans are processed promptly, and once the loan is settled, buyers reclaim their cryptocurrencies automatically.
“This isn’t just a milestone; it’s a glimpse into the future of real estate,” Karayaneva affirmed. “We are showcasing how blockchain simplifies home purchases, replacing lengthy loan approvals with immediate solutions.”
Propy’s Unique Approach
Propy utilizes Ethereum’s layer 2 solutions, having limited experience in tokenizing properties. Most transactions focus on speeding up the purchasing process through smart contracts. Altogether, crypto-native transactions make up about 5% of Propy’s business.
Karayaneva’s statement emphasizes the vivid potential of intertwining real estate and cryptocurrencies, laying the groundwork for a market valued at roughly $300 trillion.
For further insights, read the piece on Propy’s partnership with Abra.
