ESTATEX, a project in the real estate blockchain industry, released a research report Unlocking the potential of the real estate market through the RWA approach.

Unlocking the Real Estate Market ESTATEX's Groundbreaking RWA Approach Revealed in New Blockchain Industry Research Report

In the early 20th century, as the global population grew exponentially and urbanization accelerated, the global real estate industry gradually entered a period of explosive growth and dividends. On the one hand, the rapid increase in population and the acceleration of urbanization have made residential and commercial real estate gradually become essential needs. On the other hand, the rapid development of the global economy has made more and more investors confident in the development of the real estate sector, leading to a large influx of funds into the real estate sector and fueling wave after wave of real estate investment frenzy.

Real estate as an investment itself has certain peculiarities. Real estate itself is a high-value commodity, and real estate is generally sold as a whole and cannot be divided, which poses a high financial threshold for direct real estate investors. At the same time, after the purchase of real estate, there are continuous expenses such as property fees, insurance fees, and management fees that the homeowner may need to pay.

On the other hand, with the soaring number of real estate properties globally, the real estate sector has gradually shifted from a seller’s market to a buyer’s market, leading to oversupply and a decrease in the liquidity of real estate. Especially in the past few financial crises, as well as global black swan events such as COVID-19, which have continuously impacted the development of the global economy, confidence in the real estate market has been continuously undermined. Therefore, for direct investors, it is difficult to withdraw from real estate investments.

In order to further reduce the entry barriers for investors into the real estate market, as well as to attract more long-tail funds into the sector, real estate securitization has been highly anticipated. In fact, the concept of real estate securitization can be traced back to the 1950s and 1960s when the US government took some initial measures to encourage financial institutions to pool mortgage loans into debt securities. This laid the foundation for later real estate securitization.

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In the early 1970s, the US government established two government-sponsored enterprises, Freddie Mac and Fannie Mae, to purchase, guarantee, and repackage mortgage loans into tradable debt securities. This initiative promoted the growth of the housing market and the development of the mortgage loan market. Over the next decade, the mortgage-backed securities market experienced rapid growth as financial institutions began to pool mortgage loans into debt securities on a large scale and sell them to investors, thereby providing more funds for the issuance of new mortgage loans.

Over time, financial institutions and market participants introduced various types of real estate securitization products, including mortgage-backed securities (MBS), commercial mortgage-backed securities (CMBS), and asset-backed securities (ABS). These new products created diversified securities on different types of real estate assets.

The securitization of real estate certificates is usually done with the aim of expanding the market’s funding scale, but it still faces some problems.

Simply put, real estate bonds are usually issued by government or financial institutions. The centralized issuance means that real estate bonds are non-transparent in terms of issuance and circulation, and there is a serious information asymmetry, making it difficult for investors to evaluate potential risks. At the same time, real estate bond products usually lack a certain degree of universality, usually only open to regional users or even specific groups. In addition, real estate bond products usually belong to a type of financial derivative, an extension of other mainstream financial investment products, so they often lack flexibility in terms of product form, and in recent years these products have generally had low returns.

ESTATEX’s attempt at real estate RWA

1. The new trend of RWA

With the continuous development of blockchain technology and the cryptocurrency industry, the tokenization of real-world assets (RWAs) is becoming a new industry narrative. Based on blockchain, traditional real-world assets can be enhanced, transparency can be increased, liquidity management can be optimized, and many other benefits can be achieved.

Of course, the tokenization of real-world assets (RWA) is not a new concept. USDT, USDC, DAI and other stablecoins tied to the US dollar were the earliest concept of RWA assets in the industry. These assets use the US dollar as their value basis, map their value to the blockchain through different credit mechanisms, and are represented in the form of cryptocurrencies, which can be considered as the earliest practice of RWA.

US bonds are a promising area in this field. Since January of this year, the market value and daily issuance of US bond RWA Tokens have steadily increased. The total value of RWA assets is now nearly $700 million. At the same time, this new way of presenting US bonds has attracted a large number of investors to “give it a try”.

In addition to stablecoins and US bonds, the tokenization of real estate and traditional financial instruments (TradFi) is also a huge market. This huge market has attracted many participants, such as startups, governments, and financial institutions, who are all exploring the tokenization market for real estate and traditional financial instruments (TradFi). Tokenization can give real estate or traditional financial instruments (TradFi) greater flexibility in terms of transaction scale, time limit, and process. In addition, the blockchain’s native characteristics such as programmability, immutability, and composability will give RWA tokenization new paradigms, especially in the exploration of the real estate economy in a broader direction.

ESTATEX is one of the explorers and practitioners in the field of real estate RWA. It is building a real estate tokenization market based on blockchain and driving the operation of the system through an innovative economic model. The project hopes to help the real estate industry capture funding on a wider scale and further explore the development potential of the real estate market in this new way. In this process, ESTATEX hopes to allow everyone to become investors in the real estate market with low thresholds and gain substantial returns from the new field of real estate business.

2. ESTATEX Real Estate RWA

ESTATEX has built a real estate market protocol based on blockchain technology, which can tokenize the ownership of real estate, known as RWA. When a property is recorded on ESTATEX, the ownership will be uniquely confirmed through the $PROPX asset, which is a non-fungible token (NFT). Owning this asset means having ownership of the real estate.

The ESTATEX ecosystem provides a complete set of investment services, offering investors all the tools they need for investing, managing, leveraging, spending, and building real estate portfolios. Investors can start with as little as $100, and as an online platform, ESTATEX allows investors to trade anytime, anywhere, providing a wide range of income opportunities for real estate portfolio owners, retail investors, and institutional investors.

The ESTATEX system includes various sectors such as transactions, loans, payments, and education, providing a range of solutions centered around blockchain-based real estate transactions.

LaunchX and PROPX Change are two important hubs on ESTATEX for property asset issuance and trading. LaunchX is a new online market for property asset sales, where investors can participate in initial offerings of new $PROPX assets (similar to the primary market) and enjoy real asset guarantees.

In terms of acquiring properties from ESTATEX, there are three ways: direct purchase from real estate developers, buying from third parties, and cooperation projects with developer funds. Before purchasing, ESTATEX will provide comprehensive property valuation and analysis reports, releasing a key score matrix to evaluate real estate. This will include various factors such as property price trends, occupancy rates, and popularity of the area, among others. Once the evaluation is approved, $PROPX assets will be issued in a compliant manner.

After the issuance, PROPX Change acts as a secondary trading market for property assets $PROPX. It allows users to buy or sell property assets through PROPX Change in a permissionless manner, providing potential liquidity to these assets. Settlement for $PROPX transactions is done using the circulating token of the ESTATEX ecosystem, $ESX. When users purchase $PROPX assets, it represents ownership of the property or a fraction of it, and ESTATEX takes care of the actual management and maintenance of the property.

CapitalX is the loan component of ESTATEX, offering immediate and permissionless loans for investors. There is no need for credit checks or document reviews. Users can mortgage their property assets in exchange for funds to be used for investments, aiming to provide liquidity to a market that often lacks it.

ESTATEX has also introduced a payment component called EstateX LianGuaiy. This component allows users to use physical and virtual payment cards to pay for daily goods and services, both in the real world and within the ESTATEX platform. It serves as a gateway for the exchange of $ESX, $PROPX assets, and fiat currencies, driving more users to earn passive income from the Web3 real estate market. Additionally, ESTATEX has launched the ESTATEX University section, hoping to further assist investors in managing their finances and helping them understand the difference between assets and liabilities, establishing new investment perspectives and values.

Based on the above components, ESTATEX will further expand with rich profit methods and capabilities.

3. Compliance Progress

Currently, ESTATEX has obtained an ECSP license in the Luxembourg region and has signed a series of cooperation agreements. Through these cooperation agreements, ESTATEX has obtained four licenses issued by the German Financial Supervisory Authority (BaFin), including a real estate broker license, custodian license, real estate registration license, and electronic currency license.

Based on these licenses issued by European regulatory authorities, ESTATEX is able to legally operate within the entire European Economic Area, with compliance covering the entire European Economic Area. At the same time, ESTATEX can sell to everyone globally (excluding restricted countries). Currently, ESTATEX is seeking to expand compliance to the United States and gradually obtain full judicial approval worldwide, with the aim of making ESTATEX the most comprehensive, compliant, and widely used tokenized platform in the market.

4. Economic Model

ESTATEX includes two types of cryptocurrency assets, namely $PROPX and $ESX.

$PROPX assets represent partial ownership of real estate investments, and holding them means holding ownership or partial ownership of corresponding real estate. A limited number of corresponding $PROXP tokens will be issued for each real estate. The entire issuance process of $PROPX will be fully regulated by multiple financial regulatory authorities in Europe to ensure ongoing security and compliance.

ESTATEX has established a series of issuance and trading facilities for $PROPX assets, making it easy for users to buy and sell on the EstateX primary and secondary markets. At the same time, $PROPX asset holders can also receive rental income generated by properties in the form of $ESX tokens on a daily basis, and can obtain derivative benefits in the form of securities (such as sharing ESTATEX income and profits), as well as instant, permissionless loan services.

$ESX is a utility asset within the ESTATEX ecosystem. It is one of the main payment methods for purchasing $PROPX assets and will be used to represent various income methods within the ecosystem, including rental income. At the same time, $ESX is also the economic currency that drives the self-motivation of the Estatex ecosystem. Holders will receive a series of ecosystem benefits, including exclusive use rights to high-quality properties, DAO governance voting, property project submissions, participation in community meetings, exclusive ESTATEX University courses, and discounts on property purchases.

The total supply of $ESX assets is 6.3 billion. ESTATEX aims to create a contractionary economic model through various means, and this asset will be listed and circulated on external CEX platforms.

So overall, investors can benefit from a series of passive income from the ecosystem of ESTATEX, including rental income, expected upward return of $ESX with strong demand, and profit sharing from income.

It is understood that currently 80% of $ESX investors have pledged over 80% of their $ESX assets, with an average pledge period of over 7 years. This also means that 50% of $ESX assets will be pledged for the long term.

Overall, ESTATEX is inclusive for individual investors, property developers, property owners, and investment institutions. This new way of investing in real estate has excellent advantages compared to direct investment, trusts, private equity funds, and real estate funds.

ESTATEX recently launched several rounds of token sale activities, which have received high attention in the market. ESTATEX has raised over $2.9M in funding, making it one of the projects with the highest amount of funds raised in the IEO market in 2023.

4. Team

Thomas Onel – CEO

Thomas Onel is one of the co-founders of EstateX.

Over the past 2.5 years, they have been dedicated to turning the vision of EstateX into reality, raising nearly $2 million from the pre-sale community. Thomas started researching Bitcoin in 2014, which sparked his interest in cryptocurrency and blockchain technology. He made his first cryptocurrency investment in 2015 and learned valuable lessons in market collapses, pattern changes, and trend monitoring. While pursuing a degree in Natural Science and Innovation Management, he co-founded EstateX with Bart de Bruijn in early 2020. This was inspired by firsthand discovery of the inefficiencies in the real estate market and understanding how to connect blockchain technology with the real estate market to provide a range of solutions. After investing a lot of time and money to validate and develop their concept, they are now creating a new solution ecosystem for the finance and real estate industries.

Bart de Bruijn – COO

Bart de Bruijn is another co-founder of EstateX. They have been working with Thomas for over 2.5 years to turn their vision and technology into reality, raising nearly $2 million from retail investor communities.

In 2017, Bart participated in a 3-year legal assistant research program, which provided him with a deep understanding of legal frameworks and established relationships with many lawyers. Since 2018, Bart has been running multiple e-commerce businesses and achieving success. He found his passion and what he wanted to do: entrepreneurship. Besides economic returns, Bart has learned a lot from his experience in managing businesses, sourcing products, importing laws, distribution, marketing, listing, storage, sales, and operating online stores. Also in 2018, Bart started to get more involved in the cryptocurrency field and made his first Bitcoin investment that year. After understanding the potential game-changing benefits in the financial industry, he started exploring various opportunities. In early 2020, after discovering the inefficiencies in the real estate market and the benefits and solutions of connecting it with blockchain technology, he co-founded EstateX with Thomas Onel. In 2020, Bart began his studies in Entrepreneurship and Innovation at the university and received support for the launch of EstateX. Bart is committed to using the power of cryptocurrency as a tool to achieve high liquidity possibilities, with the goal of empowering individuals and enabling people to achieve financial freedom.

Beckfordhuss – Marketing and Business Development

Beckfordhuss is a well-established international marketing company with a strong track record in the blockchain field. They joined EstateX because of their recent successful crypto project, which is a metaverse based on virtual reality blockchain. They are responsible for branding, marketing, visibility, hype building, and business development. The token achieved over 170x in its IEO, increasing its market cap from $2 million to over $300 million!

They have an internal team of over 20 employees and have developed social communities on multiple platforms with hundreds of thousands of active investors, cryptocurrency enthusiasts, and project fans. The team is led by award-winning entrepreneurs who have successfully invented and brought to market a range of products, brands, and technologies, achieving international success and selling millions of products in over 50 countries/regions worldwide. They have extensive experience in sales to investors and end consumers, able to transform the most complex concepts into clear, concise, and eye-catching brand messages to boost revenue. In addition to marketing, the management team also has rich skills and experience that will take EstateX’s success to the next level! This includes backgrounds in HSBC stockbroker services, laying a solid foundation for market analysis and operations, experience in luxury residential and central London commercial real estate markets, and being pioneers in SaaS technology development.

Beckfordhuss has enviable high-profile cross-industry contacts, managing relationships with celebrities, TV personalities, top athletes, brand ambassadors, and subsidiary companies. Beckfordhuss was responsible for completing the second-largest deal in the history of global Groupon, having extensive experience in corporate negotiations and completing seven-figure transactions. Additionally, they have expertise in fundraising and serve as the strategic business development function for multiple organizations, leveraging their knowledge, expertise, and networks to elevate clients to a new level. Beckfordhuss’ distribution, commodities, and capital investment departments collaborate directly with hedge funds, public companies, pension funds, governments, family offices, and ultra-high-net-worth individuals, facilitating commodity trading and sales of various off-market landmark development projects in central London, Dubai, and Miami, among others.

Klaus Skanin – Blockchain

Klaus is one of the pioneers in the commercialization of artificial intelligence technology in the northern part of Jutland.

With a Ph.D., he holds a Ph.D. in statistics/computer science and became the CEO of Dezide in 2001. Dezide is an AI-based diagnostic and troubleshooting software provider. He has been fulfilling this role for over 13 years. In 2014, he became the founder of Sales on Tap and CS Consult, where he mentors and advises emerging IT and research-based companies. In 2017, Klaus became the Chief Operating Officer of VentureFusion, a secure ecosystem for creating and developing startups.

That was before he founded DigiShares and made a splash in the tokenization industry. DigiShares is a white label platform provider offering secure tokenization products. He has secured multiple funding and collaborated with venture capital firms, numerous clients, and institutional investors worldwide. With over 20 years of experience in software, IT, computer science, and tokenization industry, he is a valuable asset to the board.

Adam Schmidtke – Chief Technology Officer

Adam is an experienced full-stack developer and a former software engineer for Ethereum. He played a role in Prezi’s startup team and as an entrepreneur, has been involved as a co-founder in multiple startup teams.

One of Adam’s best qualities is motivating and guiding teams to maximize productivity, and he is a certified Scrum Master, which is a crucial factor in founding a successful organized startup.

Adam Blazeck – Technology

Adam is fundamentally a software developer. Software and technology have been his daily focus since he was a child. He created his first computer game at the age of 12.

He holds a Master’s degree in Computer Science from Aalborg University and is currently a respected business developer for DigiShares in the tokenization industry. He also serves the same role at VentureFusion, a venture capitalist investing in startups, introducing this new technology through blockchain.

Alexander Bernstein – Project Advisor

Alexander holds a Master’s degree in Law and an MBA in Business Administration. He serves as Chairman, CLO, and CEO of multiple companies. Alexander is considered one of the most renowned figures in the European blockchain industry.

Alexander’s Spherium Finance, for which he serves as CEO, is one of the largest decentralized finance projects in Europe. After several successful token sales, Alexander also serves as an advisor for DeFi, ICOs, and blockchain at EstateX.

Sergey Sevantsyan – ICO Director

Sergey graduated from State University and worked as a software engineer, graphic designer, and then became an office manager. He opened offices recruiting IT professionals and managed highly successful internet service providers and computer and network support center businesses. Eventually, he seized the excellent opportunity to manage the entire ICT infrastructure of international giants such as Nokia, Alcatel-Lucent, GEA, Shell, Charle, Bytech, in Moscow and the CIS. He has become a highly qualified senior ICT manager, CIO & CTO in the ICT industry.

Now fully involved in the blockchain industry and delighted to change the world by implementing and spreading cutting-edge technology to people. Since 2017, he has organized, led, and hosted over 100 events worldwide, led at least 30 ICOs, and is currently collaborating with outstanding startups.

Lex Schroder – Real Estate and Finance

Lex has over 20 years of experience in the financial market and the Dutch real estate market. He is an experienced mortgage advisor.

Lex owns multiple shops of the award-winning Dutch mortgage company “de Hypotheekshop.” Lex’s daily work includes interacting with clients, banks, and mortgage institutions, thus possessing extensive experience in mortgages, loans, refinancing, and real estate, as well as a vast network in the financial industry.

Vladimir Havryliuk Jansen – Legal Advisor

Volodymyr is a Danish/Ukrainian lawyer specializing in international commercial law and the legality of cryptocurrencies, regulations, and securities products.

After obtaining an International and European Law degree at the University of Groningen with a thesis grade of 8.0, Vladimir continued his studies, specializing in international commercial law, to earn a Master’s degree in Law from the University of Copenhagen. Here, his thesis received a score of 12 (out of 12), focusing on the changing framework of EU financial law, particularly highlighting DeFi and security tokens.

Prior to joining DigiShares as a legal advisor, Volodymyr served as a legal assistant in the corporate sector for a period of time. Volodymyr will advise EstateX on all regulatory requirements applicable to the primary and secondary issuance of security tokens in various jurisdictions. This will include prospectus rules, licensing, and reporting requirements. He will also offer advice on token structures, distribution, and compliance responsibilities.

ESTATEX Development Potential Outlook

As one of the early explorers attempting to tokenize real estate in the form of RWA, ESTATEX is breaking free from a series of shackles in traditional real estate investment.

Blockchain itself is a permissionless, distributed, public facility that can serve as a fresh conduit connected to all people and represents a whole new ideology. ESTATEX is based on the issuance of on-chain tokenized real estate, enabling transparency and eliminating the information asymmetry of traditional real estate bonds. Investors can have a clearer grasp of potential risks rather than being outmaneuvered by bankers, developers, and the like.

DeFi has already demonstrated early examples of on-chain finance, making on-chain financial products more scalable and versatile. ESTATEX is now reimagining the real estate market through DeFi and RWA, offering advantages and potential for exploring more revenue streams and diverse product forms.

By bringing real estate value and the real estate economy onto the blockchain in the form of RWA, this innovative approach is more inclusive and flexible compared to traditional real estate investments. For instance, ESTATEX can tokenize properties and provide long-term liquidity, allowing all types of investors to conveniently enter and exit the potential real estate market and profit quickly.

With ESTATEX’s new on-chain real estate infrastructure, a series of potential and flexible business models will drive the real estate market in a new direction, unlocking the untapped potential in the real estate industry.

In terms of market size, despite the severe impact on the global economy caused by events like COVID-19, the traditional real estate market still maintains significant value. Currently, the global real estate market is worth more than the total value of all stocks and bonds worldwide, nearly four times larger than GDP. Additionally, the tokenized real estate market in Europe is projected to reach 1.5 trillion euros by 2024. With a new business track backed by trillions of dollars in real estate RWA, ESTATEX’s development potential is evident.

Of course, as an emerging field, RWA faces challenges in executing and coordinating on-chain and off-chain processes. Unlike DeFi lending protocols, where liquidation is fully automated and managed by code, the liquidation of RWA collateral (at least partially) must be handled off-chain, typically through legal systems. This complexity introduces legal disputes for debtors and presents the most significant challenge for all RWA projects.

ESTATEX is legitimizing its operations through regulatory compliance. In the European region, it has already obtained support from relevant regulatory bodies during the process of real estate tokenization, significantly reducing potential legal risks and safeguarding investors’ rights. Additionally, ESTATEX’s team and advisory board consist of industry professionals with expertise in real estate, law, finance, and more. This will further contribute to ESTATEX’s exploration of compliance and risk mitigation.

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