People are finding more inventive ways to sell homes in today's environment of higher mortgage rates: on October 14, the NFT (non-fungible token) marketplace OpenSea reported the sale of a three-bedroom home in South Carolina by the blockchain-based real estate platform Roofstock onChain for $175,000.
A cryptocurrency that follows US dollars one for one, USDC stablecoins, were used to pay $175,000 for the residence. Because USDC is a "ERC-20" token, you can transfer it and receive it on the Ethereum blockchain in the same way that you can with ether. An Ethereum smart contract went into action as the new owner clicked the final "buy" button, transferring the USDC to the seller's Ethereum wallet and an exclusive NFT (an "ERC-721" token) containing the ownership rights to the property to the buyer's wallet. The entire process took a few minutes, costing roughly $10 in transaction costs. Contrast that to the approximately $10,000 typically spent on listing and agency costs for a home at this price.
The mortgage was obtained through the cryptocurrency lending platform USDC Homes, which provides stablecoin loans of up to 80% of the value of a "tokenized" house in exchange for bitcoin, ether, or USDC as security. To ensure that the borrowers are qualified, the process includes a loan application, an underwriter fee, and the typical credit paperwork.
Even while the majority of people are still dubious of this odd new technology known as blockchain, we'll definitely see a lot more property sales like this in the future, don't anticipate them to become the standard very soon. However, it does strengthen the case for long-term investment in the NFT sector (more on that here).
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