Digital real estate platform Roofstock has announced facilitating a purchase of a house by leveraging a non-fungible token (NFT).
The transaction that involved a property valued at $175,000 in Columbia, South Carolina was the first USDC Homes lending pool sale powered by onchain financing, RoofStock said in a press release on October 18.
Under the plan, the sale was enabled by Roofstock onChain (ROC), which serves as RoofStock’s Web3 subsidiary that facilitates instant transactions for the single-family rental houses. The house was listed on RoofStock’s NFT marketplace, built on Origin Protocol.
“Cutting out intermediary fees is one of the pillars of Web3, and this is just the beginning. As more and more real estate is brought on-chain through NFTs, we will see more efficient and liquid markets for these traditionally illiquid assets,” said Matthew Liu, co-founder of Origin Protocol.
Benefits of web3 in real estate
Notably, Web3 aims to cut traditional barriers to purchasing a property by making the process more efficient and transparent with reduced costs.
“Instead of waiting months for underwriting, appraisals, title searches, and preparing deeds, I was able to buy a fully title-insured, rent-ready property with one click. Best of all, I am no Web3 expert,” said the buyer, Adam Slipakoff.
For future property purchases, the Teller Protocol will offer financing with buyers in a position to request up to 80% loan-to-value of the sale price of the NFT with USDC Homes, a Decentralized Finance (DeFi) lending pool maintained on the Teller Protocol. It is worth noting that the lending pool is not linked to the USDC stablecoin.
At the same time, Teller has partnered with Polygon (MATIC) in facilitating the loans while leveraging the blockchain’s low gas fees. Under the lending plan, USDC Homes allows customers to use popular cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) as collateral. Interestingly, when applying, the buyer can also provide their off-chain data, like credit score.
The use of NFTs in real estate has been growing in recent months amid increased adoption. However, linking NFTs to real-world property still faces a significant concern around fraud and scams.