RWA: Propitek- Tokenizing Real Estate through DeFi

[GENERAL] Name and surname of main applicant

Nancy Omonhiboloria

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

Entity (Not Incorporated)

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

8

[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)

Propitek solves this problem by tokenizing real estate on the Cardano blockchain, allowing investors to buy, trade, and own fractional property shares securely, with lower costs and transparency.

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

No

[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.”

No dependencies

[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

Propitek can use the MIT License, offering broad freedom to use, modify, and distribute the code.

[METADATA] Horizons

NFT

[SOLUTION] Please describe your proposed solution

PropiToken property tokenization solution on the Cardano blockchain aims to revolutionize real estate ownership and investment by leveraging blockchain technology to make property assets more accessible, liquid, and secure. The solution uses Cardano’s smart contracts, token standards, and decentralized governance to enable fractional ownership, streamline real estate transactions, and facilitate decentralized management of properties.

Key Features of Propitek’s Solution:

Fractional Property Owenership through Tokeniation:

• Propitek will tokenize real estate assets by creating Non-Fungible Tokens (NFTs) or security tokens representing fractional ownership stakes in a property. Each token will grant the holder proportional ownership rights, including the ability to trade or transfer ownership easily through Cardano’s secure blockchain.
• This allows investors to purchase shares of a property instead of the whole asset, making real estate investments more affordable and accessible.

Plutus Smart Contracts for Transparent Transcations;

• By utilizing Plutus smart contracts, Propitek will automate and enforce property transactions, including sales, rental agreements, and profit distribution. These contracts ensure that property transfers and payments happen transparently and securely, reducing the need for third-party intermediaries such as brokers or lawyers.

• Smart contracts also facilitate escrow services, ensuring that funds are only transferred once all contract conditions are met.

Decentralized Real Estate Marketplace:

• Propitek will create a decentralized marketplace where tokenized properties can be listed and traded. This marketplace will allow buyers and sellers to trade real estate tokens in a peer-to-peer manner, ensuring liquidity and transparency.

• Users can trade their property tokens or invest in new listings on decentralized exchanges (DEXs) integrated with Cardano, enhancing liquidity for traditionally illiquid real estate assets.

Goverance and Voting Rights:

• Token holders will have governance rights over the property, enabling them to vote on major decisions such as property sales, renovations, or leasing agreements. These governance features will be powered by Cardano’s Voltaire governance framework, ensuring that all decisions are decentralized and democratic.

• Propitek’s token holders can also participate in profit-sharing mechanisms, receiving a portion of rental income or capital appreciation based on their token ownership.

Compliance and Security:

• Propitek’s platform will ensure full compliance with legal and regulatory requirements, including KYC/AML protocols, by integrating Cardano’s Atala PRISM identity verification solution. This will ensure that all participants in the tokenized real estate market are verified, preventing fraud and ensuring compliance with local laws.

• Security audits of smart contracts will be conducted to ensure the system is free of vulnerabilities, protecting user assets and maintaining the integrity of transactions.

Decentralized Financing and Mortgages:

• Propitek can enable decentralized mortgage lending through DeFi solutions. Tokenized properties can serve as collateral for decentralized loans, providing liquidity for property owners and creating new opportunities for investors.

• This opens up a new financial model where property-backed loans are handled directly between lenders and borrowers via smart contracts, reducing reliance on traditional financial institutions.

Benefits of Propitek’s Tokenization Solution on Cardano:

• Affordability & Accessibility: Propitek lowers the entry barrier to real estate investment by allowing fractional ownership, making it possible for more people to invest in properties with smaller amounts of capital.

• Liquidity: Tokenized properties can be traded on secondary markets, providing liquidity for real estate assets that are traditionally hard to sell quickly.

• Transparency & Security: Blockchain’s immutable ledger ensures that all property transactions are transparent, secure, and traceable, minimizing fraud and increasing trust.

• Global Reach: Propitek’s platform will allow international investors to participate in property investments from anywhere in the world, democratizing access to real estate markets.

By developing its property tokenization solution on the Cardano blockchain, Propitek positions itself at the forefront of the real estate tech revolution, offering a more decentralized, accessible, and secure way to invest in and manage real estate assets.

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

The Propitek property tokenization solution on Cardano can have a significant positive impact on the wider Cardano community in several ways:

1.⁠ ⁠Increased Adoption of Cardano Technology

• By tokenizing real estate on the Cardano blockchain, Propitek encourages the use of Cardano’s smart contracts, decentralized applications (dApps), and identity verification solutions, such as Atala PRISM. This brings more users and developers into the ecosystem, increasing the adoption and use of Cardano’s technology.

• Propitek’s platform can demonstrate Cardano’s scalability and low transaction fees in real-world applications, showcasing its viability for enterprise-level projects and attracting more businesses to the platform.

2.⁠ ⁠New Investment Opportunities for the Community

• Propitek’s tokenized real estate assets provide a new, accessible investment avenue for the Cardano community. Cardano users can diversify their portfolios by investing in fractional property ownership, benefiting from rental income, property appreciation, or resale profits without needing significant capital.

• This democratizes real estate investments and allows community members from different economic backgrounds to participate, creating wealth-building opportunities across a broader section of the community.

3.⁠ ⁠Strengthening Cardano’s DeFi Ecosystem

• By integrating real estate tokenization into Cardano’s decentralized finance (DeFi) ecosystem, Propitek can contribute to the growth of decentralized lending, borrowing, and collateralization opportunities. Tokenized properties can be used as collateral for DeFi loans, creating more liquidity and financial options for Cardano users.

• This also strengthens Cardano’s DeFi sector by adding real-world assets, increasing its utility, and creating innovative financial models that can be adopted by other dApps in the ecosystem.

4.⁠ ⁠Boosting Liquidity and Economic Activity

• Tokenized real estate assets bring liquidity to traditionally illiquid assets like property, allowing property tokens to be traded on Cardano’s decentralized exchanges (DEXs). This increased liquidity benefits the entire Cardano network by creating new market activities and driving transactions, which can positively impact ADA and other tokens.

• Property tokenization also opens the doors for global investors, enhancing cross-border transactions within the Cardano ecosystem and boosting economic activity on the network.

5.⁠ ⁠Building Trust and Transparency in Real Estate

• Propitek’s use of blockchain technology ensures transparency in property transactions, reducing fraud and increasing trust in real estate investments. This can attract a broader audience to Cardano who value secure, transparent, and decentralized operations.

• By providing immutable records of ownership and transactions on Cardano, Propitek reinforces the platform’s strength in governance and decentralized record-keeping, aligning with Cardano’s commitment to high standards of security and integrity.

6.⁠ ⁠Increased Use of Cardano’s Identity Solutions

• Propitek’s integration with Atala PRISM for KYC/AML compliance can expand the use of Cardano’s identity solutions within the real estate sector. This could set a precedent for other industries, showcasing Cardano’s potential for managing secure and decentralized identity verification.

• As Propitek grows, it will likely push for further development of identity-related technologies on Cardano, stimulating innovation and research in this domain.

7.⁠ ⁠Stimulating Community Innovation and Development

• The success of Propitek on Cardano could inspire other blockchain-based real estate projects, fostering innovation within the Cardano community. This can lead to the development of more property-focused dApps and services, creating a niche industry within the broader Cardano ecosystem.

• Propitek’s open-source development or collaboration with other Cardano projects could stimulate community-driven growth, creating new development opportunities for blockchain developers and real estate professionals alike.

By offering a decentralized, transparent, and accessible property tokenization platform, Propitek can drive adoption, innovation, and economic growth within the Cardano community, aligning with Cardano’s broader mission of empowering individuals and creating sustainable financial solutions.

[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?

Propitek’s Capability to Deliver with High Trust and Accountability

1.⁠ ⁠Team Expertise and Background:

Propitek’s team consists of experts in real estate, blockchain development, and financial services, bringing a wealth of knowledge and practical experience. This multidisciplinary approach ensures the project is guided by professionals with a deep understanding of the real estate market and the technical capabilities to build on Cardano’s blockchain.

2.⁠ ⁠Decentralized and Transparent Platform:

By building on the Cardano blockchain, Propitek ensures all transactions and property ownership records are secured in a decentralized and immutable ledger. The transparency inherent in blockchain technology provides trust in the system, with all actions auditable by stakeholders.

3.⁠ ⁠Smart Contracts for Accountability:

Propitek will leverage Cardano’s smart contract technology to automate and secure key processes like escrow management and title transfer. These smart contracts remove intermediaries, reduce the potential for fraud, and ensure accountability by automatically executing agreements once pre-defined conditions are met.

Feasibility Validation

1.⁠ ⁠Pilot Program:

Propitek intends to launch a pilot program where a select number of properties are tokenized and sold through the platform. This pilot will test the system’s functionality, user experience, and security in real-world conditions, gathering valuable data to refine the platform before scaling.

2.⁠ ⁠User and Community Feedback:

The project will continuously engage with the Cardano community and real estate investors to gather feedback and improve the platform. Propitek aims to integrate community input into the governance model, ensuring the platform evolves according to user needs and market trends.

3.⁠ ⁠Collaboration with Cardano Developers:

Working closely with Cardano’s developer community and leveraging the extensive resources of the ecosystem, Propitek will ensure technical soundness and scalability. This collaboration will validate that the platform’s architecture aligns with Cardano’s best practices for blockchain solutions.

In summary, Propitek combines a strong, capable team with transparent processes, blockchain-backed security, and a clear plan to validate and scale their solution.

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

To successfully complete the Propitek property tokenization solution on the Cardano platform, the following five key milestones should be achieved:

Research and Feasibility Study (Month 1)

• Conduct Market Research: Analyze the real estate market and blockchain use cases, focusing on property tokenization, compliance requirements, and user demand. Study Cardano’s technical advantages like scalability, low fees, and sustainability.

• Feasibility Study: Evaluate the technical and financial feasibility of tokenizing real estate on the Cardano platform, including legal implications, KYC/AML compliance, and security considerations.

Partnership Development (Month 2)

• Partner with Legal and Regulatory Experts: Collaborate with legal experts specializing in blockchain technology and real estate regulations to ensure compliance with security laws and real estate ownership frameworks.

• Collaborate with Cardano Ecosystem: Engage with Cardano-based developers, stakeholders, and projects to integrate the necessary tools such as Plutus smart contracts and Atala PRISM for identity verification.

Platform and Smart Contract Development (Month 3)

• Develop Smart Contracts: Create and test Plutus smart contracts for fractional ownership, asset tokenization, escrow, and governance systems. These contracts will handle property sales, voting rights for owners, and profit distributions.

• Design the Tokenization Platform: Build the front-end and back-end architecture for Propitek’s tokenization platform where real estate assets can be tokenized, traded, and governed.

Tokenomics and Governance Model (Month 4)

• Define Tokenomics: Determine the token distribution model (e.g., token allocation per property, pricing, and fractional ownership rules). Ensure the economic model is designed to provide liquidity and incentivize participation.

• Develop Governance Mechanisms: Implement governance structures where property decisions (e.g., selling, leasing, or renovating) are managed by token holders through a decentralized voting system.

⁠Compliance and Security Audits (Month 5)

• Smart Contract Audit: Conduct third-party security audits of the smart contracts to ensure they are free of vulnerabilities.

• Compliance Review: Ensure the platform complies with international real estate and security regulations (e.g., KYC/AML). Work with regulators to ensure the tokens are legally recognized as ownership stakes in real estate.

6.⁠ ⁠Platform Launch and Token Offering (Month 6)

• Beta Platform Launch: Launch a beta version of the platform with a few tokenized properties to gather user feedback and ensure the system operates as intended.

• Token Sale and Distribution: Offer the first batch of tokenized properties to early investors, allowing them to purchase fractional ownership tokens. Ensure a seamless experience for token purchasing and trading.

Liquidity and Exchange Listings (Month 7)

• Integrate with Cardano DEXs: List the property tokens on decentralized exchanges (DEXs) built on Cardano to ensure liquidity and ease of trading.

• Establish Liquidity Pools: Allow token holders to participate in liquidity pools to enhance the tradability of tokens and ensure that investors can easily buy and sell ownership stakes.

Scaling and Community Building (Month 8)

• Expand Property Listings: Tokenize more real estate properties across different regions, including commercial, residential, and mixed-use developments.

• Grow the Community: Build a strong community of investors and property owners by educating users on the benefits of property tokenization and engaging them in the platform’s growth.

Global Expansion and Innovation (Beyond Month 8)

• Explore International Markets: Expand tokenized real estate offerings to international markets by ensuring compliance with foreign regulations.

• Innovate with DeFi and Mortgages: Explore decentralized finance (DeFi) applications, such as enabling decentralized mortgage lending and borrowing, where tokenized properties serve as collateral.

By comprehensively analyzing each milestone, we intend to ensure that the Propitek project is well-structured and strategically planned. By setting these milestones, Propitek can systematically develop a property tokenization platform on the Cardano blockchain, ensuring regulatory compliance, security, and user adoption.

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

The Propitek project team comprises experienced professionals with diverse expertise.

1. Nancy Omonhiboloria, founder/project manager of Propitek, overseeing the project execution and ensuring milestones are met, managing the budget and timeline for the project. Linkedin: https://www.linkedin.com/in/nancy-omonhiboloria-84370b107
2. Anderson Omorogbe, a blockchain developer, will lead blockchain integration for secure transactions and smart contracts.
3. Abah Gandoki, a UI/UX designer and front end developer, designing the visual layout and branding elements for Propitek. LinkedIn Profile: https://www.linkedin.com/in/abah-gideon/
4. Precious Igbokwe, a software engineer, will oversee the development of the AI-driven property search algorithm and the web application. LinkedIn - www.linkedin.com/in/ijeoma-igbokwe-55a441198

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

Here’s a comprehensive cost breakdown for the Propitek property tokenization solution on the Cardano blockchain, structured around an asking fund of 100,000 ADA:

Total Project Budget: 100,000 ADA

Proposed Budget Structure

The budget is structured at 20,000 ADA per month, with the project expected to take five months to complete. To demonstrate good faith and accountability, the budget for the first milestone is requesting an increased by 40%, with the remaining amount allocated to the final milestone.

Milestones Breakdown

Milestone 1: Platform Design, Initial Wireframes, and Documentation

• Cost: 23,750 ADA (11,875 ADA for initial milestone + 11,875 ADA increased for accountability)

• Percentage of Total Budget: 23.75%

• Estimated Time: 4 weeks

• Description: This phase includes designing the user interface and experience for the tokenization platform, creating static wireframes, and documenting initial technical requirements.

Milestone 2: Wallet Integration and Smart Contract Development

• Cost: 23,750 ADA

• Percentage of Total Budget: 23.75%

• Estimated Time: 5 weeks

• Description: This phase involves integrating digital wallets for user transactions and developing smart contracts to facilitate property tokenization on the Cardano blockchain.

Milestone 3: Enhanced Smart Contract Functionality

• Cost: 23,750 ADA

• Percentage of Total Budget: 23.75%

• Estimated Time: 5 weeks

• Description: This milestone focuses on adding advanced functionalities to the smart contracts, including compliance checks and automated transaction features.

Milestone 4: Front-end Development and User Testing

• Cost: 23,750 ADA

• Percentage of Total Budget: 23.75%

• Estimated Time: 5 weeks

• Description: Completing the front-end development of the platform and conducting user testing to ensure functionality, usability, and security.

Milestone 5: Project Close-out Report and User Training

• Cost: 5,000 ADA + 11,875 ADA = 16,875 ADA

• Percentage of Total Budget: 16.875%

• Estimated Time: 1 week

• Description: Preparing a comprehensive project close-out report, providing user training, and ensuring all documentation is complete and accessible.

Summary

This structured budget and milestone plan ensures that Propitek can effectively allocate resources to achieve a successful property tokenization solution on the Cardano blockchain, promoting transparency and fractional ownership in real estate investments.

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

Asking for 100,000 ADA in funding for the PropiToken project represents a significant investment in the Cardano ecosystem, showcasing its potential value through various quantitative metrics. Here’s how this funding can be justified in terms of value for money:

1.⁠ ⁠Tokenization Potential

• Case Study Example: If PropiToken enables the tokenization of properties worth $1 million, and each property is divided into 1,000 tokens, each token would represent $1,000 worth of real estate.

• If PropiToken can sell 100 tokens for a property, the initial investment of 100,000 ADA could facilitate the listing and trading of these tokens, creating a market for fractional ownership.

• Assuming the current ADA price is around $0.30, 100,000 ADA would be equivalent to $30,000. If successful, this can yield returns significantly exceeding the initial investment through property appreciation and transaction fees.

2.⁠ ⁠User Acquisition and Growth

• Marketing Reach: A well-planned marketing campaign with a budget of 30,000 ADA can reach potential investors and users through social media, webinars, and local events. If this effort successfully attracts just 100 investors, and each invests an average of 2,000 ADA (approximately $600), the total investment raised would be 200,000 ADA or about $60,000.

• This illustrates a 6x return on investment from a marketing expenditure aimed at building the user base on the Cardano platform.

3.⁠ ⁠Transaction Fees and Ecosystem Growth

• Transaction Fee Model: PropiToken will charge a small transaction fee for each property token trade. If the platform enables 1,000 trades monthly, with an average fee of 5 ADA per transaction, this generates 5,000 ADA in revenue per month.

• Over one year, this would result in 60,000 ADA in revenue, effectively covering the initial investment in less than two years and providing funding for further development and ecosystem enhancements.

4.⁠ ⁠Projected Value Increase of ADA

• Market Dynamics: The demand for Cardano-based projects may drive the price of ADA up over time. If ADA appreciates from $0.30 to $1.00 during the project’s lifecycle, the initial investment of 100,000 ADA would increase in value to $100,000.

• This appreciation not only benefits initial investors but also enhances the project’s overall financial stability within the Cardano ecosystem.

Conclusion

The request for 100,000 ADA represents a strategic investment with the potential for high returns through property tokenization, user acquisition, and revenue generation from transaction fees. By showcasing the scalability and profitability of PropiToken, this funding request is quantitatively justified as providing significant value for money within the Cardano ecosystem.