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DeFi and the tokenization of the real estate market

Real estate is traditionally seen as one of the least liquid asset classes in the market. Real estate transactions require property management, a lot of legal work, warranties and paperwork, and plenty of planning. But what if properties were tokenized on the blockchain, and investing in such assets was simplified to the point of “slicing up” luxury real estate worth a few million reals?

This is the premise of the conversation we had with Cássio Krupinsk, entrepreneur, crypto market investor and CEO and founder of BlockBRa fintech specialist in tokenization and investments in digital assets, which is preparing a first-of-its-kind project – the first DeFi for the real estate market, called T-Propt, which will tokenize and trade luxury homes. The solution is being developed in Brazil and Switzerland and has already started with a R$50 million fund to support the initiative.

Below you will find highlights of the conversation. The complete interview, in video, can be seen below or on ANBIMA’s YouTube channel.

The tokenization of real estate

Entrepreneur Cassio Krupinsk says he has a portfolio of more than 22 startups created or invested in. From a traditional family within the financial market, he began his career at 16 as an apprentice to the brothers Joseph and Moise Safra, but only stayed for a short time. In 2018, “because of the cryptoactive wave, and already imagining that they would have their own revolution, not only by decentralization, but by democratization of access,” he took over as business manager of CoinPayments, a fintech linked to payments using cryptoactive. In 2021 he went back to entrepreneurship, creating BlockBR, a receivables asset tokenization company.

Tokenizing physical assets

“Making the tokenization of an asset and making the offering of that digital asset in a democratized way is a beautiful story, but we still need to have an evolution in the culture of blockchain and Web3, because although it is much simpler than Web 2.0, all these new terms that it brings still create a lot of confusion in people’s minds.

Let me give you an example: there is no point in me tokenizing heads of cattle and creating a DeFi for the livestock sector, if the sector doesn’t already have a blockchain technology in place, where it at least stores data so that you have the immutability and the efficiency of that data that ensures security along with real assurance. Anyway, it still has a lot to go forward.”

Luxury Real Estate, Affordable

“Real estate has always been an area that I have looked favorably upon. We then created within BlockBR the tokenization of physical assets, and this category includes real estate. To do this, we had to create a project within the company that was within regulatory compliance and that also made sense for the market. We decided to create a developer (taking advantage of the 2019 multi-property law) and I invited four renowned architects to be part of it – Gui Mattos, Felipe Diniz, Arthur Casas and Tiago Bernardes.

One focus was on changing people’s view of post-pandemic real estate. A R$5 million house is a very nice house, but in times of economic crisis, war and instability, finding people with that kind of money becomes much more difficult, right?

Keeping an eye on Real Digital

“We then created T-Properties, which does luxury home design and construction and the offering of multi-property fractions – it has fractions from 8 to 32 quotas, depending on the location. If we were talking about the traditional market, it would basically be an SPE that owns a house, and that house is sold in 8 fractions, which represent 12% ownership within that SPE.

We set up a DeFi, which replaces a real estate fund, in which the investors’ contribution has the property as collateral until the total sale of the shares is made for use. We have created within the project NFTs for the right to use all other properties.

What we are waiting to happen in the market, from the regulator’s side (Central Bank), is the Real Digital (the Brazilian CBDC) because the Real Digital itself will work as a register of transactions through the blockchain. In that way, it’s going to make it much easier to decentralize, to inject liquidity of capital from the outside in, and the opportunity for supply from the inside out.”

Source: ANBIMA Linkedin

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