Conference: Finance & Real Estate
Speaker
Yael Tamar – Founder and CEO at Doric Studio and Living Walls
Conference Insights
Yael Tamar, co-CEO and co-founder at SolidBlock, shared the most important aspects of decentralised finance (DeFi) when it comes to real estate investments.
Before listing the numerous benefits that DeFi brings to the table when compared to traditional, centralised finance (CeFi), Tamar gave a primer on lending and loaning in the crypto space, decentralised exchanges, the tokenisation of real estate assets, and how SolidBlock fits within the whole picture.
At the end of the conference, Tamar explicitly expressed her availability on social media, LinkedIn, Twitter and Telegram to answer questions from the audience.
What is DeFi?
DeFi is an evolution of CeFi. Banks govern and control people’s assets, whereas individuals are the sole custodians of crypto assets.
DeFi is a new, open-source type of finance made possible by blockchain technology. It is fully transparent, allows new products to flourish, and facilitates existing ones.
Examples of DeFi finance
LENDING AND LOANING WITH STABLECOIN: MAKERDAO
MakerDAO is a decentralized, autonomous organisation. It issues its own stablecoin, called DAI, which collateralize existing crypto assets. It locks away an equivalent worth of crypto or other liquid assets for the issuance of a stablecoin, which is, in turn, tied to real-world currencies (in this case, the American dollar). MakerDAO is now opening to real-world assets as collateral.
DECENTRALISED EXCHANGES: UNISWAP
An interesting thing about DeFi exchanges, such as Uniswap, is that, unlike traditional exchanges, they allow individual investors to provide liquidity for exchanges and over-the-counter desks via liquidity pools.
Tokenisation:
Traditional assets, such as real estate, get on DeFi through tokenization, which means breaking them down into shares and digitizing them by putting the ownership ledger on the blockchain.
In the real world, the asset is listed as belonging to a company under the form of a special purpose vehicle. This company receives funds from investors, allocates shares, and records their ownership on the blockchain. Once their ownership is recorded on the blockchain, they can perform many operations. They can trade, collateralize loans, stack or add their assets to an index, and so on.
ENTER SOLIDBLOCK
Companies like SolidBlock provide a capitalization table over the ground layer of title ownership.
They do so by relying on blockchain, which is a trustless system. On one hand, everybody has visibility into these records on the public blockchain. On the other, the owner of the asset is not able to erase someone’s ownership, because it is written on the blockchain. The owner of the asset remains so on paper but, in reality, it belongs to many owners on the DeFi space.
Benefits of tokenisation
That’s where things are going to become interesting. Let’s review the benefits of tokenisation in DeFi. Of course, trading on exchanges is already a huge benefit for assets in DeFi. Previously, you couldn’t trade assets. You had a long lockup period until you could even get your money out.
INDEXING AND BENCH-MARKING STRUCTURED PRODUCTS
Traditional financial institutions are known for creating structured financial products, which are bundles of investment vehicles for different companies, technologies, commodities… Once those products are digitalised, it is much easier to bundle them up. This opens up the possibility of creating a market on top of a market.
EXCHANGE INTEROPERABILITY
Prior to blockchain, it was impossible or very difficult. This makes collateralization of tokens easier. Lowering the cost of capital by using new types of investors pooling capital together gives it an edge over traditional finance, especially in the current environment, where bank interest rates are going up.
CONNECTING TO OTHER DEFI FUNDING SOURCES
The industry is evolving at such a fast pace that soon we’re probably going to see even more products that we haven’t thought about before. We will probably see something in Web3 that merges crypto and traditional assets.
Regulation is also evolving, which provides additional opportunities.
Updates and further information about the summit’s developments can be followed on the official blog and on its social media channels.
