Investors Can Now Purchase Slices of Home Equity Through Fractionalized NFTs
The new marketplace joins an increasing number of firms attempting to integrate real-world applications for NFTs.
A real estate firm has launched a service that enables homeowners to sell a piece of their equity via fractionalized net-fee-to-owner (NFT) transactions.
Vesta Equity chose the Algorand blockchain for its NFT (non-fungible token) marketplace, which the company claims is the first peer-to-peer exchange that enables homeowners to leverage and sell a portion of their equity via digital collectibles.
“Imagine a future in which, with a few mouse clicks, you can access the full worth of your home’s built equity without incurring debt or selling and relocating,” CEO Michael Carpentier said in a statement.
Fractionalized NFTs — which do not grant residential rights — are packaged and registered as securities with the Securities and Exchange Commission. Holders, Carpentier said, may diversify their investment portfolios with real estate assets in addition to typical stock investments.
Qualification as a security and compliance with the SEC’s regulatory standards have often been a source of contention for crypto firms.
A class action lawsuit was launched last year against Dapper Labs, the maker of popular NFT collections such as NBA Top Shot Moments, claiming that some digital collectibles acted as unregistered securities.
Vesta believes the SEC’s approach leaves little room for interpretation – Carpentier asserts that he does not “believe the regulatory context is confusing.”
“The SEC’s view on fractionalized real estate assets is rather clear,” he said. “They classify them as securities, and their sale must be conducted in accordance with SEC regulations.”
The marketplace is the latest addition to a growing list of NFT initiatives competing for real-world use cases.
Propy, a blockchain firm, auctioned a Florida property as an NFT last month for approximately $653,000. According to Propy CEO Natalia Karayaneva, the company’s services may “become a norm in the [real estate] market.”
“By December 2021, NFT sales will exceed $4 billion, and real-world assets will account for a significant percentage of that market,” Karayaneva added.