Michael Arrington, founder of TechCrunch, has become an adviser to Propy, an ethereum based peer-to-peer real estate exchange platform which is currently developing the Propy Registry, described in its whitepaper as:
“A blockchain endowed with a suite of smart contracts to track and execute real estate transactions according to regional regulations.”
Arrington is joined by David Cowan from Bessemer Venture Partners, Vinny Lingham from Civic, Mike Costache from d10e, Bruce Cahan from Stanford University, and Jeremy Gardner from Blockchain Capital, who will advise Propy in the creation of its real estate exchange platform utilizing Ethereum smart contracts.
The start-up already has an app for iOS, targeting international property sales, but it’s not clear how many are currently using it.
Founded by Natalia Karayaneva, who has a background in real estate development, the app targets sustainable living, offering a 1 to 10 score based on social, economic, and environmental indicators of the property and its location.
They now plan to take that further by using ethereum’s smart contracts to automate the selling process, but the very brief white-paper hardly provides much detail.
That may be because it’s all in the very early, prototype, stages, with transactions currently taking place in fiat until the registry is fully developed.
The problem they are tackling, however, is considerable. Property sales take months, and even more so for international sales, as the process has to go through many intermediaries, lawyers, land registries, banks, and the rest.
Propy hopes to streamline that process by tokenizing land office copies and by processing payments through the blockchain, allowing “brokers, buyers, sellers, and title agents/notaries to sign off on transactions using private keys within their existing legal frameworks,” trustnodes is told.
While on the app front, they already provide users with services in their own language, allowing them to communicate in their native language with foreign brokers.
“Beyond finance, real estate is perhaps the most obvious industry prime for being upended by blockchain technology,” said Jeremy Gardner, co-founder of Augur Blockchain Capital.
There have been a number of projects towards that end, with REX hoping to tokenize properties through ethereum’s blockchain so that you can buy parts of a house just like you buy stock shares.
Meanwhile, Sweden has already completed a pilot to blockchenize their land registry with initial results showing the system successfully works.
So Propy is likely to face some competition, but to what extent remains unclear as we have not yet been provided with any data on their current revenue and profits.
They say a minimum of 0.2%, with an average of 1%, is taken from each property sale, but fail to state how many such sales there have been in the past year.
Vital information, especially considering they are hoping to raise a maximum of $100 million in an ICO that’s to open this 25th of July.
That would give it an evaluation of a billion or more, but we have no idea whether that is in anyway reasonable as basic information has not yet been provided to investors.
Nor do we know how these funds will be spent. They have a number of former high level executives in their team, including from BNP Paribas and Wells Fargos, who most probably come at a very high yearly cost.
The blockchain part itself certainly wouldn’t need $100 million to be developed, not least because the breakthrough smart contracts invention and ethereum was developed with less than 5% of that sum.
But, how far that blockchain part has progressed also remains unclear. Another very important piece of the puzzle as investors will only receive real returns if the tokens are used for property listings or purchasing.
Such requirement may be quite a barrier to the apps use in itself, but even beyond that hurdle, with the token not functional for real transactions anytime soon, $100 million seems optimistic.
The project itself is interesting, if they can pull it off, but execution is 90% of the game and without any data on how their execution has performed so far through their already operational app, we’re left without any real way of evaluation their Initial Coin Offering (ICO).