Esper Wealth hosted our first blockchain and real estate summit in Manchester on the 24th of November. We would like to thank all the guests who were able to attend. The event covered the key aspects of how blockchain will impact the real estate industry. Following our first summit, we plan to hold several future events in different cities throughout the UK in 2023. We also plan to hold fortnightly webinars and podcasts to cover this important subject matter in the new year.
During these events we will cover various key components which are listed below:
- An introduction into blockchain
- An explanation of how blockchain will impact the real estate industry
- Benefits of using blockchain in real estate
- Smart contracts
- Tokenization of real estate
- Market trends and potential for growth
The second part of each blockchain and real estate summit we will focus on investing. This covers:
- Incentive theory and risk verses return
- Venture capital schemes available to investors to reduce risk and increase potential returns
- Taxation rules and regulation
The final part of each event we will focus on Esper Wealth as a company. During this part of the event we will tackle how Esper Wealth intends to use this emerging technology to build up our company and deliver a healthy ROI to prospective investors. We introduce important aspects of our investment strategy:
- Segmenting the two companies to allow for seed and EIS investment.
- Joint venture between the two companies to improve investment return
- Tokenomics strategy to ensure that the token retains long-term value
- How we utilise several lines of funding to deliver an outstanding return on equity
Blockchain technology has the ability to transform multiple industries. Real estate and financial services are the two industries that will be most affected.
Introduction to blockchain
During each summit we will outline the key concepts of blockchain technology. One central theme is the immutable nature of blockchain technology. This removes the need to operate through a centralised institution as information can be validated through the consensus algorithm. There are several ways that tokens and coins can achieve this. The two most popular are Proof of Work and Proof of Stake. We cover how these two ways of decentralised validation works.
Blockchain’s effect on real estate
Blockchain technology will transform the way that we buy property. We cover the key points of this subject matter. The technology can speed up property purchases while reducing the cost of professional third parties in the due diligence process. This will be a huge benefit to the buyer and seller alike. Furthermore, as contracts are more structured with information uploaded onto the blockchain permanently, there will be fewer disputes between buying and selling parties and the construction industry in the building process.
Smart Contracts effect on real estate
Smart Contracts run on blockchain technology. They can reduce the workload of professional third parties by having all the necessary information related to the property deal on the blockchain. This will remove the need for all parties such as lenders, brokers, and solicitors all having to independently contact the land registry. Instead, information will be stored on the blockchain and will only be available to stakeholders in the property transaction.
Similarly uploading a client’s identification on the blockchain means the buyer and seller only need to do this process once as opposed to doing it with each intermediary. The net result will be quicker property transactions with substantially reduced third-party fees.
Blockchain allows for the tokenization of real estate. This offers more than just faster and cheaper transactions. For a buyer, they can see immediately information about the property held on the blockchain. This means not having to spend a lot of time and money on solicitors, only to be advised to pull out due to unfavourable conditions. For the seller, they know that there is likely to be a swifter sale as offers can be checked out quickly by third party representatives.
Tokenisation allows for increased liquidity and fractural ownership. Property for example, could be split into a million tokens, so it offers fractural ownership of property. This is important for larger property transactions such as shopping centres which tend to take a long time to sell due to the size of the purchase.
Tokenization also helps with the globalisation of real estate. As all the important information will be held on the blockchain, there is no need to go to the country to complete a transaction.
Tokenized real estate is currently growing very quickly. It is estimated that the real estate sector now makes up about 40% of the digital securities market. This market has already facilitated several development funding projects. One of the first tokens to raise in the real estate industry was the issuance of Aspen Coins in 2018. This represented fractional ownership of the luxury St. Regus Aspen Resort in Colorado USA. The token raised $18 million.
The world economic forum, anticipate that 10% of real estate will be tokenized by the end of the decade. This means that there is likely to be huge growth in this sector.
At each event, we will give an outline of the current market trends and developments that are occurring within this sector of the property market.
Investing is about risk and return. We show investors how to capitalise by loading the odds in their favour through using venture capital schemes. Qualifying investors can benefit from income tax relief, loss relief, CGT exemptions, and other tax benefits. The net effect is lower levels of risk and potentially higher net returns on any investment. These schemes are set to become even more important to investors with the tax rules which will come into effect in April.
Token exchanges are different from stock markets. They are open 24 hours a day, 7 days a week. It is possible to trade in smaller units and take pro-rata ownership of real-world assets. Furthermore, there is often a more favourable tax environment.
During each blockchain and real estate summit we explain how these exchanges work, including taxation. We also discuss the pros and cons of utilising them compared to traditional exchanges.
Esper Wealth investment model
The final part of the event explains how Esper Wealth is structured to deliver exceptional returns to investors. We explain how we use various tax schemes to lower risk, whilst potentially increasing investor returns.
Other important considerations are covered. These include how we are targeting raising equity finance from private and institutional investors as well as incentivising prospective franchisees.
Critically, during each blockchain and real estate summit we will explain how funds will be utilised to build a profitable business.
If you are interested in learning more about how blockchain will transform real estate then please contact our investor relations team.