Reitcircles is a decentralized housing protocol being built upon Cardano that enables any house or asset owner to sell a part of their asset and get liquidity when they need it most. Small investors can now invest in real assets for small denominations.
When people with positive home equity require a loan during difficult circumstances (job loss, medical expenses, or significant life events.), banks may deny the loan, or the interest rates may be too high. We present a better way to tap into the home equity using blockchain based tokens. And to simplify things we only discuss sale of homes/real estate where the owner has full ownership. Hence we do not discuss in the entire article, homes or assets which have mortgages or liabilities attached to them.
In order to achieve this, we create a protocol that allows the home owners to transfer their home to the blockchain and issue tokens to interested buyers. The tokens issued on this platform carry the information about the asset that is associated with it, as well as the legally compliant information about identity of buyers and sellers and documents that prove ownership of the assets. In this way the blockchain becomes the single source of truth for the assets, owners and buyers.
Once the blockchain contains information that are relevant, several products are created using this information at hand. These products allows multiple ways for all parties in the ecosystem to interact and generate value.
From the legal standpoint the information flow between the different parts of the ecosystem centred around the blockchain, needs to be compliant to existing country and state laws. To this end a new concept of DAO (Decentralised Autonomous Organisation) is introduced for each asset.
The DAO of a particular asset represents all the real world needs and in addition allows execution of automated contracts on blockchain, that allows flow of value between different participants of this organisation. More of this later.