GoKey: Playbook for Converting Cardano Staking Rewards to Tokenized Real Estate Ownership Interests

[GENERAL] Name and surname of main applicant

Craig Immel

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

12

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

GoKey will develop one or more unique investment models that allow Cardano stake pool delegators to earn ownership interests in real estate and other real world assets in lieu of ADA staking rewards.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

Yes

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

Project solution must comply with all applicable securities and tax laws and regulations - especially in the US. GoKey will consult with attorneys, accountants, tax consultants and other external experts to inform the design and specification of our proposed proof-of-concept investment model.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

We will openly document and share all research, legal documentation, processes, and unique insights gathered with the public.

[METADATA] Horizons

Real Estate

[SOLUTION] Please describe your proposed solution

PROPOSED SOLUTION SUMMARY:

GoKey will leverage Cardano's unique, industry-leading liquid staking mechanism to develop and share innovative new legal and technical conceptual frameworks that allow ADA holders to access legally-compliant ownership interests in real estate investments, while maintaining full ownership and custody of their principal ADA holdings.

We will open source project documentation that will be relevant to investments in a diverse array of real world assets on Cardano.

 

PROBLEM STATEMENT

Many ADA holders want to passively invest in income producing real estate, but don't want to cash out their principal ADA holdings to acquire real world assets in certain tax or market environments. Selling ADA holdings for fiat currencies in the purchase process of real estate interests can be inefficient for capital preservation, tax treatment and time management.

GOKEY'S SOLUTION

The solution to the above problem statement requires utilizing new digital technologies – namely, Cardano's unique non-custodial, proof-of-stake consensus mechanism - to ideate and develop novel business and investment models that allow holders of existing digital assets to access new digital assets representing legal ownership of real world assets such as real estate.

We will research, design, prototype and document new strategies that will allow ADA holders and other Cardano project developers to access valuable new legal and technical frameworks that make it possible for Cardano stake pool delegators to seamlessly invest their typical ADA staking rewards into income producing real estate investments.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

This project will provide valuable open source documentation as a guide for development of secure and easy-to-use option contracts and will pave the way for new financial services, purpose-built for complex real world assets such as real estate. The Cardano Community will benefit by having access to this open legal and financial documentation that could save builders and developers of similar business models hundreds of thousands of dollars in time, labor and legal and consulting fees.

This project will showcase powerful features of Cardano that can uniquely enable entirely new business and investment models. These include Cardano native tokens and NFTs, liquid staking pools, programmable tokens, digital identity solutions, legal signatures and privacy solutions.

Short, medium and long-term impact of this project will be measured by the numbers of individuals engaging with GoKey's stake pool delegation and real estate investment platform, and by the numbers of other Cardano-based real world asset projects and individual users utilizing the produced legal and technical documentation to serve their own user-bases.

We will share the outputs and opportunities resulting from this project with the Cardano Community via open-sourced written reports, playbook for other real world asset projects, working prototype, video demos, live presentations, X spaces, etc.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

CAPABILITY TO DELIVER

Since 2021, GoKey has built a track record of developing innovative business models and tokenized real estate finance and investment concepts, products and services that are made possible only by the unique capabilities of the Cardano blockchain and its growing ecosystem of infrastructure and tooling.

GoKey, in collaboration with Clarity DAO, was successfully funded in Project Catalyst Fund11, and we continue to submit and gain rapid approval for each of our required milestones.

Playbook for SEC Exempt DAOs on Cardano

https://cardano.ideascale.com/c/idea/113206

Experience and Expertise:

• The GoKey team has been building in the Cardano Ecosystem for over 3 years, and was one of the first 10 Cardano native tokens to trade on a Cardano DEX. Over the years we have built a reputation for transparency, fair dealing, high-standards and long-term staying power. GoKey developed and issued the world's first cryptocurrency designed to track movements in real estate market prices, and GoKey DAO recently launch Cardano's first private tokenized real estate investment club, purchasing nearly 3 acres of community owned and managed land in Colorado, USA.

• GoKey has operated and continuously updated GOKEY Stake Pool since early 2022.

• GoKey's Founder, Craig Immel, has nearly 3 decades of deep experience in all types of real estate development, design, technology, finance, investment, construction management, sustainability, consulting and legal issues. GoKey is especially interested in bringing time-proven, yet somewhat obscure, creative peer-to-peer real estate financial and investment products to the mainstream by leveraging Cardano's uniquely powerful and secure financial technology.

• GoKey's deep experience and industry knowledge allows access to top-tier real estate, legal and financial professionals that we can rely on for timely and relevant guidance on the complex issues where Web3 and real world assets meet. We have the unique ability to speak the language of both professional real estate markets and of the underlying technology, enabling us to follow best practices and to consistently make informed decisions and deliver reliable solutions. GoKey's professional partners will review and provide guidance and comments to optimize the value of the project deliverables and improve this project's return on investment to the Cardano Community.

TRUST AND ACCOUNTABILITY

Transparent Communication:

• We provide project development updates, transparent progress reports, and hold interactive sessions to address questions, gather feedback, and ensure alignment with project goals.

Commitment to Documentation:

• Our team produces comprehensive documentation, including technical specifications, user guides, and project reports. These are all made public for streamlined user adoption and to make it easy for stakeholders to review and verify the project progress.

Adherence to Best Practices and Standards:

• We follow industry best practices, adhere to established standards, and conduct thorough testing and security audits to ensure the reliability and robustness of our solutions.
• We prioritize data privacy, asset security, and stake pool operations, implementing safeguards and risk mitigation strategies to protect funds and maintain trust.

By combining our experience, transparent communication, documentation practices, adherence to standards, and past successes, we are confident in our capability to deliver the proposed project with high levels of trust and accountability.

VALIDATION OF FEASIBILITY OF PROJECT APPROACH

We have conducted initial research into the feasibility of creating legally binding real estate ownership digital assets and security tokens by leveraging Cardano blockchain stake pools, and we have confirmed the validity of the project approach.

MANAGEMENT OF CATALYST FUNDS

GoKey takes a conservative approach to managing its project development funds. We run lean, low-cost operations and practice sound fiscal management by maintaining diversity in digital asset holdings, stablecoins and cash to ensure received Catalyst funds will sufficiently cover project development costs.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Research of Ideal Legal Structures and Compliance Paths

Output: 

• A report sharing best legal and technical options for utilizing Cardano non-custodial staking mechanisms as investment vehicles, including investment analysis, legal review, and exploration of Cardano's potential in addressing real estate investment challenges.

Acceptance Criteria:

• Completed report identifying key challenges and opportunities for investing in tokenized real estate ownership via Cardano staking rewards
• Legal and regulatory analysis to ensure compliance with US securities regulations.

Evidence of Completion: Submission of a comprehensive research report covering legal and technical issues, and investment analysis.

Technical Approach and Implementation Strategy

Output: 

• Analysis of technical options available for implementation of conversion of conventional ADA staking rewards into ownership interest tokens and/or compliant security tokens.

Acceptance Criteria:

• Completed report including analysis of preferred options for technical implementation of the project.

Evidence of Completion: Submission of completed report covering technical implementation options and preferred strategies.

Financial and Investment Modeling

Output: 

• Analysis of financial and investment modeling, incorporating parameters related to Cardano stake pool profitability, diminishing staking rewards, ADA price volatility, lending market conditions, etc.

Acceptance Criteria:

• Completed report including analysis of preferred options for financial and investment strategies and implementation of the project.

Evidence of Completion: Submission of completed report covering financial and investment modeling, and implementation options and preferred strategies.

Proof of Concept Delivery

Output: 

• Proof of Concept and final documentation

Acceptance Criteria:

• Completed report including project background and proof of concept for community review.

Evidence of Completion: Submission of completed report and community outreach

[RESOURCES] Who is in the project team and what are their roles?

GoKey: GoKey is on a mission to help everyday people access the wealth building benefits of property ownership.

• Craig Immel: Craig founded GoKey in 2021, building on 20+ years of tech-forward real estate and construction management experience. He is committed to leveraging Cardano's unique blockchain architecture and tooling to drive massive improvements in real estate and housing finance and investment markets. Craig holds a Master's degree in Real Estate and Construction Management from the University of Denver. (https://linkedin.com/in/craigimmel/)

We have anticipated recruitment of several legal and technical partners if funded, including attorneys, tax accountants, stake pool operators, programmable token developers, digital identity providers, token distribution platforms, etc.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Answer:

ADA price assumption $0.30

Legal Fees 50 hrs $450/1,500 ADA per hr: 75,000 ADA

Accountants 35 hours $200/666 ADA per hr: 23,310 ADA

Documentation and Community Outreach: 150 hours $100/333 ADA per hr: 49,950 ADA

TOTAL: 148,260 ADA

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

• Enhanced Compliance Knowledge: The project's investment in legal expertise will contribute to a better understanding of compliance within the Cardano community. This knowledge can be applied to other projects, ensuring they navigate legal requirements effectively.
• Ecosystem Expansion: By enabling new, legally-compliant investment models on Cardano, the project contributes to the expansion of the Cardano ecosystem. New investment opportunities attract more users and investors, increasing the ecosystem's overall vibrancy.
• Community Empowerment: The open-sourcing of documentation and best practices empowers community members to create their own compliant organizations. This self-sufficiency fosters a sense of ownership and innovation within the Cardano community.
• Long-Term Viability: Building a foundation for compliant investment opportunities ensures the long-term viability of Cardano as a platform for real-world financial applications. This adds credibility and attractiveness to Cardano for potential investors and partners.
• Knowledge Sharing: The project's commitment to sharing research, findings, and insights helps educate the wider blockchain and cryptocurrency industry. This, in turn, can draw attention and investment to Cardano as a leading blockchain platform.
• Reduced Legal Risk: By addressing legal compliance challenges, the project reduces the legal risk associated with blockchain-based investments on Cardano. This can attract risk-averse investors and institutional players to the ecosystem.
• Innovation Hub: As the project pioneers new use cases like on-chain real estate investment and decentralized venture capital, Cardano becomes an innovation hub. This reputation attracts innovative projects and individuals, further enriching the ecosystem.
• Global Collaboration: Through partnerships and collaborations, the project establishes Cardano's presence in the global blockchain landscape. This fosters international collaboration, sharing of ideas, and cross-border investments, benefiting the ecosystem's global reach.
• Scalability and Adoption: The project's success in incorporating real-world entities sets an example for future projects, encouraging them to scale and adopt Cardano as their blockchain platform of choice.
• Trust and Credibility: By adhering to legal compliance standards, the project enhances trust and credibility within the Cardano ecosystem. This trust factor can lead to increased adoption and partnerships with established organizations.