Blockchain technology comes to real estate investments

blockimmo, by contrast, offers the highest possible investor protection. First, the rights of ownership to the properties are represented by tokens at blockimmo. Second, the underlying real estate properties on which the investments are based are held in an investment fund in Liechtenstein. Each property is secured through a separate, closed sub-fund. Last but not least, there is just one, unique token category for each property. The various properties in the blockimmo ecosystem are thus not mixed up with each other. ‘It was a demanding and challenging project. Nevertheless, we have managed to ensure the highest investor protection while providing a simple and user-friendly structure,’ says Marcel Hostettler, lawyer and partner at the law firm MME and former FINMA employee. He lauds the partnership between Bastiaan Don and his developers, as well as Bank Frick: ‘This was an assemblage of absolute pros who came together to create something great.’

The Zug-based law firm MME, an established player on the blockchain scene, and Liechtenstein-based Bank Frick are supporting Bastiaan Don with the launch of the platform. ‘With the first regulated, token-based real estate investment fund in the world, Bastiaan has set an important milestone in the development of blockchain technology. The implementation of projects like blockimmo demonstrates the expertise of Bank Frick. in the field of digital business models and products, as well our innovative drive,’ says Raphael Haldner, Director of Funds & Products at the family-run bank.

To ensure the greatest possible security for investors and sellers alike, the blockimmo platform (build on the Ethereum Blockchain) was also thoroughly put through its paces by the IT security firms New Alchemy and Hosho as well as the Public Bug Bounty Program via HackerOne prior to going live.

Advantages for sellers

One advantage for real estate sellers is that the sale at a pre-determined price takes place entirely without brokers and can thus be carried out at a lower cost. In the process, the property is transferred to blockchain through a smart contact and tokenised. The seller can set their own preferred sale parameters. Through a dashboard, the seller can monitor the investor situation at all times during the crowd sale. As soon as the sale formalities have been concluded, the seller receives the proceeds of the sale, either in cash or Ether, as preferred.

As both the sellers and the buyers are able to dispense with legal and regulatory matters, blockimmo also offers other salient advantages. This makes the real estate market considerably more attractive and transparent for both parties. And because there are no middlemen, investors profit from lower costs.

Partial sales and bidding process

Starting in the first quarter of 2019 at the latest, blockimmo will also offer other trading options that have been difficult or impossible to conduct until now. Examples include the partial sale of properties and crowd sales by auction. In the latter case, the investors can personally decide what the property is worth to them. This also benefits the property seller: with the investors setting their own price for a property, the seller is guaranteed to achieve the best possible price above their own minimum demand. ‘This represents a novelty in the real estate sale process unseen on the market to date,’ says Bastiaan Don.