Roofstock, the online platform for investing in single family rental homes, announced last week they completed the sale of one their homes via a non-fungible token through their subsidiary Roofstock onChain. The Columbia, South Carolina home sold for $175,000 to local real estate investor Adam Slipakoff.
As one of the first NFT-based residential home sales for the US, the purchase took multiple players in the blockchain landscape to reach completion.
To start, the home is titled under a limited liability company whose ownership is linked to Home onChain, an NFT on Ethereum blockchain. The transaction took place on the Origin Protocol marketplace using the stablecoin USDC from Circle, which was converted from US dollars using Wyre. Financing was facilitated via Teller Protocol, a fintech platform that maintains the decentralized finance lending pool USDC Homes (which is not connected to the similarly named USDC, mentioned above). The buyer used a ‘multi-sig’ wallet on Origin, requiring two parties to sign off on the transaction before funds were released.
“The marketplace smart contract that we use instantaneously did that swap,” said Matthew Liu, cofounder of Origin Protocol. “The NFT shows up into this new multi-sig wallet and the USDC that the buyer paid was split [to different parties]. That all simultaneously happened in one on chain transaction.”
The transfer of funds were simultaneously sent to the seller, minus Origin’s standard fee of .5%, and Roofstock onChain’s fee of 2.5%. Prior to the transaction, USDC Homes required an underwriter fee and transacting on most blockchain platforms, including Ethereum, comes with what’s known as a ‘gas fee’ to pay for the cost of using the platform.
“The dream from our side is at some point in the future this technology can power a user experience that looks pretty equivalent to what like Roofstock’s existing business looks like,” said Liu, referring to how Roofstock’s investment process takes place fully online. “A lot of the difficult parts of the blockchain—fiat on ramps to crypto, the actual smart contracts, the selling of these entities, etcetera—get simplified so that traditional home buyers and sellers don’t need to fully understand this technology. This is laying the early groundwork for all of us as a collaborative industry to eventually disrupt traditional real estate. It may take five years, 10 years. But that’s what we’re most excited about.”
Before the transaction could take place the buyer had to have their identity verified in a traditional ‘offline’ manner so they could have a whitelisted wallet on Origin.
Liu envisions a future where these NFTs can be sold to additional parties saying, “Because NFT’s are interoperable and they can be easily transacted, in theory they can also be fractionalized. So you could turn one home into many small homes. That creates better market efficiency, price discovery, liquidity and also access to more people.”
There are other players in the blockchain space when it comes to buying and selling physical properties. Real estate startup Propy has completed several sales, most recently in Gulfport, Florida and has more coming. Another $4 million home under construction in Utah is planned for an NFT sale later this year.