In Baar the first property was tokenized via the transaction platform of blockimmo — based on blockchain technology. Around CHF 3 million, or 20 percent of the property value, was tokenized before being sold to four investors in a club deal. The transaction was made possible by the combined efforts of three Zug companies blockimmo, Elea Labs and Swiss Crypto Tokens.
Tokenizing is the process by which the real asset value of the property is represented digitally on the Ethereum blockchain in token form. This new financing and investment method is a product of blockimmo. It aims to be the global marketplace for tokenizing property. Bastiaan Don, founder and Managing Director of blockimmo, explains: “Traditional property investments and their issuing programmes have barely moved forward. In Switzerland, you have a non-transparent market with asynchronous information that is difficult to access. This has a negative impact on the liquidity potential of the real estate market. By using blockchain technology, blockimmo enables a solution to a problem, representing a paradigm shift for real estate ownership and trading.”
Tokenizing is a broader trend. Two other Swiss start-ups, Mt. Pelerin and Tokenestate already executed digital transactions of tokenized shares.
Three companies teamed up
20 percent of the property value was tokenized before being sold to four investors in a club deal. The four transactions were carried out on the Ethereum blockchain and can be verified on the blockimmo platform.
The transaction was supported by Elea Labs, which provided the real estate data of the property. Elea Labs aims to ensure that each building has its own identity or “Property DNA”. This makes the property real — all data about a property is backed up and stored decentralized.
“With the decentralized property register Property DNA we enable users of the blockimmo platform to make a sound investment decision based on complete and validated property data. In the future, the Property DNA will enable a transparent digital due diligence and will also simplify, accelerate and reduce the cost of processes across the entire real estate industry,” explains Martin Schnider, CEO of Elea Labs.
Price fluctuation risks of cryptocurrencies are eliminated by the implementation of ‘CryptoFranc’, a ‘stablecoin’. The transaction was supported by the crypto broker Bitcoin Suisse, through its subsidiary Swiss Crypto Tokens. For the property in Baar, the investment was carried out with the digital Swiss franc CryptoFranc, or ‘XCHF’, from Swiss Crypto Tokens. Last November, the company launched a digital token pegged to the Swiss franc, of which it has issued CHF 15 million to date. The CryptoFranc serves as a liquidity instrument for the Swiss blockchain ecosystem.
“With the stablecoin CryptoFranc, we have developed a key piece of the puzzle for the Swiss blockchain ecosystem. Blockimmo has utilised this instrument perfectly to realise the future of real estate transactions. Here, one can see a brilliant implementation of the way real estate will move between parties in the decades to come, purely on the blockchain.” explains Armin Schmid, CEO of Swiss Crypto Tokens.
Blockimmo planning further expansion
Following this initial step, blockimmo is planning to tokenize further properties that will then be sold by means of a ‘public crowdsale’. All property tokens are expected to be listed in the second quarter of this year on a regulated exchange, which will further improve their fungibility. The blockimmo team is working on a decentralised exchange known as STX.SWISS, which forms the basis for a new system for tokenizing, investing and trading.
“With this market launch and groundbreaking first deal, this technology is now live. We are digitalising real assets together with our partners. We are thankful for the opportunity to shape in a sustainable way the real estate industry and the blockchain community and we look forward to the next step,” says blockimmo’s Bastiaan Don.
(Press release - SK)
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