kendsouza · 119d ago

Though dapps is evolving and has a future...explain in layman's terms why would anyone want to tokenize their physical assets. Why would I tokenize my house or car? What is the value?

desprout · 119d ago

Several reasons why.

We have designed systems to release equity from your tangible assets whilst retaining ownership historically; real estate and land are very illiquid assets that only become liquid at points of purchase or sale, often leading to loss of ownership. By tokenising such assets, the asset owner can release equity from such assets and then use such equity to gain passive income that was until now unthinkable.

So as an everyday person, your reason for tokenising such assets could be to use the liquid value of an asset for a low APY return loan or to deposit into decentralised finance to gain passive income, which was unthinkable until now. Once tokenised, the asset owner has several finance options, and their asset becomes very, very liquid; assets can be transferable via a p2p secure network, with frictionless and scalable cheap transactions. Something that just can not be done with an untokenised real estate asset.

In layman's terms, if you could gain a 5% APY return or more from your owned assets whilst still retaining ownership, I suggest that could be extremely beneficial. If you happen to own a real estate asset valued at 200,000, then there is an income of 10,000 per year that you would not be able to receive without the tokenisation of your asset.

Let's take this a bit further and talk about agricultural land; 30% of the world's landmass is used for agriculture, which itself is a heavily subsidised industry across the globe. Many farms own 10's/100's/ or even 1000's of acres of land; that land has a value that is just sat illiquid. The only way to release liquid value from the land asset would be to sell it, resulting in loss of ownership, or use it as collateral to take out a loan, resulting in paying back the liquid value you borrowed. Using the Fundi Finance system, a landowner could tokenise his assets, deposit to decentralised finance and receive a passive income of 5% APY or more. The landowner has kept ownership of the land, he is still able to farm his land, and now he receives an income from the land that was not available before.

The other side of the spectrum.

You own a house with a large plot of land and have spent many years wishing you had the money to build another place on the land. Using the Fundi Platform, you can tokenise your entire business plan offering fractional ownership shares to willing investors in return for a share of the proceeds that follow a completed project and sale or rental income. You haven't borrowed from the bank; you haven't had to search or ask for willing investors to help you achieve your project dream.

These are just a few examples. They are also covered in whitepaper.

I hope this explains some of the
benefits to why tokenise your assets.

kendsouza · 119d ago

Ok..here is the million dollar question:)
Let's say I have a house worth million dollars and need a million dollars. I tokenize it for a million tokens on your FundiFinance. Who would buy these tokens and why? How is the legality of ownership getting enforced if I sell my house? My local county which is in possession of the ownership deed in my name is really not going to care about someone holding tokens on my house.

desprout · 119d ago

In those circumstances, you would have to take out collateral backed digital loan, not forgetting the due diligence of our system and the signing of the legally binding contract. You have to KYC, and the legal formalities are the same as traditional systems. If you were to do that, you would find yourself in jail and owing a lot of money.

The jurisdiction of the asset binds each project, so you would indeed be governed by your local jurisdiction and very liable to prosecution. The asset would not be legal for you to sell, and you would have already signed your home as collateral, so for Fundi Finance, it would not matter about the poor soul you conned into buying a house with 1 million debt, and they would never legally own it. Lets us not get carried away by also forgetting the checks carried out by buyers and that the million debt would be registered against the house.

Each application is vetted and thoroughly checked guided by legal legislation of that assets jurisdiction; what you are proposing is a pre-calculated fraud, and I think your local authority would have a regulation regarding such an act, and if it didn't, then this service would not be available in that jurisdiction. As incredible as it might sound to you, I am afraid we have spent a bit more money on legal guidance than to be duped by such a deliberate act. LOL, but nice try; I don't think you quite understand that the token would legally represent the asset's value or understand the regulation that is already in existence and the legal system we have created with the Fundi Finance protocol. You have legally signed and made the contract, whether it's a token or fiat cash your signatory is received and printed on a contract.

You also have to remember the different examples of investment options; you tokenise your house for what reason, pre-empted fraud is not valid.

In these circumstances, you stated let's forget the fraud bit and look at why tokenize. Here you would have three options;

1) Would be to deposit that value into a reward return pool.
2) Collateral for a loan.
3) For the sale of your property.

Why would someone purchase in this way,

1) Because the transfer of funds can be instant, taking seconds and 24/7 no matter of international jurisdictions.
2) Transfer is secured Pier 2 Pier transaction no middle handlers no hidden fees direct from the purchaser to the seller or from the purchaser to escrow to the seller.
3) Transfer of funds cost around $0.14C; considering the house's value is 1 million, you have already saved yourself and the purchaser a considerable amount of money.
4) The transaction is transparent and traceable.
5) The average cost of fees to selling a property is often between 8-10%. You will save half of this.
6) The investment can gain intrinsic value as it is real estate.
7) The investment also holds value to gain passive income from depositing it to a liquidity pool paying a 5% or greater return.

Now let's look at this from another perspective to answer some questions on why your tokens would be appealing, tradeable and what about ownership.

You own a real-estate asset worth $1 million. Still, it has a potential letting value of $100,000 a year you tokenise your buy and sells fractional ownership shares represented by tokens, each token represents a share in dividends of the rental income to that asset, therefore, creating a secondary market for such tickets due to the ROI in dividend returns.

Another option

You own a real estate asset worth $1 million. The asset is pretty run down but has enormous potential even a hotel is possible. You get an estimate that the development cost to turn this run down asset into a hotel would be another $1 million, and you also have designed plans that the asset will covert into 40 bedrooms with an average price per room of $200 per night. For the sack of this example, we say that all rooms are 70% booked every night all year, generating $5600 per day x 365 = $2,044,000 per year. Now you propose your idea to the community of investors. You need to raise $2 million to build the project. You want to open your chances of raising the money quickly, so you put a fractional share price of $100 per share, making a share accessible to investors from across the globe, including the emerging markets such as Africa, Asia, and South and Central America. This means you would be offering 200,000 shares at $100 a share. As shown in the maths, the potential income is $2,044,00 per year; let's say that running costs and maintenance is 20% $408,800 per year, leaving a gross income of $1,635,200 per annual income. Divide that by 200,000 shares $8.176 in dividends paid out to each shareholder per year that's an ROI of 8.176% per annum to the token holders. So there it is your token again has a primary income creating a secondary market value for owning such a token.

Ownership

Ownership is where we have designed a clever system. Firstly, it depends on the project itself, you have to ask does ownership need to be given with the token. Giving direct ownership in some circumstances will be a must, however as you have pointed out and I have confirmed, ownership requires legal steps, often a WET signature. This is not a problem if you have just a few investors, but if you have 200,000, then it gets complicated. Also, ownership means securities transactions or the possibility of abiding by securities regulation which again can get complex and means lots of work signatures and more. In the case of the hotel, it is not necessary to give direct ownership as your investors are invested for a financial return and not ownership to live in the property; what's important is the benefits that come with ownership, such as Dividend returns, Voting or governing power to the project, equity value if the hotel is sold at a later date. So in these circumstances, it's all about the company formation of the hotel. Our system creates an LLC owned by members represented by a token with a UIN stored in its metadata; our system uses the LLC registration number, so the token and the LLC hold the same registration number. The LLC owns the asset, the hotel, and ownership stays with the LLC; however, the LLC is owned by the members, the token holders! In the formation of the LLC, equity is divided by 200,000 members (tokens holders), so every 2000 tokens will equal 1% of the equity to LLC. It is again using the HOTEL example. Therefore each token will legally carry the right to dividends that equity ownership brings along with governing power and the return of a sale if the business later sells the asset.

We have designed several systems, some dealing with debt as debt is not regulated by securities and some dealing with equity. The beauty of tokenising is that you are solving many problematic areas, including ownership formalities.

Ultimately, our platform is for investors and developers; later in the road map is when we will get the example you first stated here: an individual looking to release capital of an asset and not a business looking for funding and investment.

I hope this detailed explanation clarifies your question and how we have solved problems that currently exist, even solving the issue of ownership and whether it's needed or not.

Thank you for your feedback. I have really enjoyed your questions. They have been two perfect ones.

Can I ask whether you have read the whole whitepaper?

If so, do you think we need more explanations for some areas?

The problem with trying to fit everything in the white paper soon becomes TOO LONG, haha; I would be interested in your view on this.

Thank you for your time.

kendsouza · 119d ago

Ha Ha... I am not interesting in conning anybody:)... just pointing out ( or as u yourself are doing above in the longish message:)... that you still need a regulatory framework, legal protections and a lot of paperwork ..maybe more so than the traditional route. Also the vast majority already has a mortgage on them. The lender owns the lein.

And then there are taxes, repairs, utility bills, property management etc etc. Someone has to foot the bill if the owner bails out.

All that is not in place yet and it is a rabbit role for each individual property..and it is unlikely the average joe with the physical asset will get it or will be interested...so this idea of fractionless ownership or a entire sale with tokens is moot and will never scale.

But hey..on the bright side...there is always the cartel or the Russian oligarchs:)

desprout · 118d ago

The legal framework already exists; we have used the same legal, regulatory framework for decades and modernised the base currency. Fractional ownership already exists, so does the tokenisation of assets. The average Joe is more likely to invest and purchase shares for income, while businesses are likely to tokenise to raise funds. This is our target audience Sir, not individuals, thou that will come later. We have been involved in this through traditional finance for 20 years; real estate projects are often funded through fractional shares. We don't touch mortgaged assets. You're quite right. That's a bit far off yet a colossal headache, owned real estate assets only.

Taxes are down to each individual or LLC when it comes to profits from dividends the same way it works now; of course, this depends on the asset you receive as payment and a jurisdiction's law. For example, cryptocurrency is a tax-free asset and transaction in some jurisdictions. I already included the maintenance fees, and this is just essential real estate management. The average cost is around 5% of income per year and is also a tax deductible transaction. Also very dependent on each project. Utility bills I am struggling with your concept here. Yes, people pay utility bills and don't see how this is a problem.

I am afraid you are wrong, and all of these things are in place regulation and legal formalities; there is no rabbit hole, and this is not a Roswell conspiracy. I think you are still unfamiliar with digital assets, real estate law, ownership law, and financial law. Hence your comment about cartels and Russian oligarchs. Digital currency, oh no, sir must be a con. You are aware we are seeing central banks create digital currencies CBDC's.

There are already working examples of tokenised real estate assets with billions of dollars a year invested into such systems.

Why would you need more paperwork and more legal formalities that is just fear-mongering, paperwork and formalities are reduced, and an OWNER can not run. This is a ridiculous view. They have signed a legally binding contract that would see such an action as a crime. The same risks are involved with any real estate finance it does not matter that crypto currency is used. Why don't people run from their mortgage? You speak like a purchase to let does not exist or is not a viable business venture; I would say many real estate funds, landlords, and portfolios would suggest otherwise. Do you know what a REIT is?

Thank you for taking the time to write your view.

kendsouza · 118d ago

First of all..you asked for feedback and you are getting it..you don't have to get bent out of shape when someone gives you a dose of reailty:). Keep a open mind and don't get personal as to what I know and I don't.
Yes..I know about REIT'S, Cryptos, dapps, and I do understand the fractional ownership in shares, mutual funds etc etc.
In a REIT or a mutual fund investment, mortgages..the entire system is in place..I don't have to worry about the underlying assets, just the final traded value.
I questioned the viability of your project, because the system is not in place for the underlying assets unless you outright buy it and manage it just like REITS.
At some point, there is possibility everything will get tokenized on the blockchain when every jurisdiction accepts it, we are not there yet!
And yep..money laundering/scams is rampant in the crypto world!

From the link u sent..read the sentence..'compliance with the local laws' and it is a 506(c) offering...do u understand that??
"Aspen Digital Token, an asset backed coin, distributed to investors through a private Reg D 506 (c) offering, that is compliant with the laws of the jurisdictions in which it is sold."

Anyway..enough said...I really don't care. It was fun:)

desprout · 118d ago

Yes I understand 506c securities regulation I have used it many times as an outside US investor. You're missing the point we are compliant as the ownership stays with the LLC it's truly groundbreaking.

ashwinsk · 119d ago

Just a humble traveler in this sea of words.

AndyDent-Touchgram · 117d ago

I've skimmed the discussion - @kendsouza has been more patient that I would be.

I've had multiple mortgages over the years. A mortgage typically bars you from taking any kind of other agreement against the secured asset. So you have to get the banks on board first.

I see this as a massive flaw in your business model. Either

a) You have no hold over the property, so nothing to do with the tokens is enforceable, or
b) You have to deal with banks and negotiate in advance same as any other second mortgagor.

eg, from my mortgage:
"You must not do any of the following things unless you first
get our written consent:
a) mortgage or charge all or part of the property to anyone
else or allow any other mortgage or charge over the
property to exist;"

page 25 of
https://www.mebank.com.au/getmedia/1bf7e1a5-1cfc-4ffb-a3c1-7cadffe98751/Home-loan-terms-and-conditions.pdf?v=1646909894

desprout · 117d ago

We DO NOT deal with mortgaged properties; I have repeatedly said this. All properties are fully pre-paid for in a fundraiser, purchased by an LLC; LLC owns the property and tokens are sold to investors. Please read properly.... Fundi Finance is a real estate launchpad via fractional ownership.

It's a relatively simple concept to grasp, propose a real estate development or real estate asset to the community with a business plan and ROI for the investors. Investors purchase shares represented in tokens and receive rental or resale income dividends. Or invest in real estate projects that Fundi Finance proposes for a dividend return.

When did I say we are tokenising mortgaged properties ????

Kendoza made an example that would be refused and never get past stage one. We have a real estate LAWYER in our founding team and a legal team that has helped design our idea.... He was quite simply being provocative, and despite several explanations of what we were doing, he just kept moving the goal post.

I think more to the point I am very patient with people incapable of reading. You are making up flaws that do not even exist or are proposed in our whitepaper or business plan.

Thank you for taking the time to post a concept we do not offer, but feedback is not relevant to our business plan, concept or services.

read our white paper to understand the concept properly.

https://www.canva.com/design/DAE4RXu4pzY/AP62mIxeOk0zQ7Wi-gRybA/view?utm_content=DAE4RXu4pzY&utm_campaign=designshare&utm_medium=link2&utm_source=sharebutton

AndyDent-Touchgram · 117d ago

When someone doesn't understand a key point from your white paper, don't shout at them. It's your failure to communicate clearly.

" I am very patient with people incapable of reading"

Goodbye, last bit of useful feedback you'll get here.

desprout · 116d ago

Now that is real feedback non-provocative to the point and without cloak or daggers. This is the way the correct way to communicate and could have been started this way.

AndyDent-Touchgram · 116d ago
desprout · 116d ago

Reviewed SlowDAO very interesting project they have the right idea similar to aspects of us

desprout · 116d ago

Exciting posts Andy Slow DAO seems very interesting, and I believe that DAO systems are vital to future business development, particularly with the governance of a protocol. We are creating a Securities DAO system to Fundi Finance which will be the first; there are many crypto DAO projects out there at the moment non Complaint to US securities, mainly with paying dividends and giving governance to a token. The situation is easily solved by making your governance token a securities token and abiding by legal frameworks that exist, which is quite right too. Some projects have cut corners or not spent money on sound legal advice.