UPRETS Highlight | MakerDao: Hedging Risk in DeFi Through Real Estate Assets Is the Next Step in DeFi’s Development

With UPRETS’ latest application of collateralizingits participated and originated OST-1 real estate digital securities on MakerDao, the Decentralized Finance (DeFi) could soon boast a real-world use case.

MakerDAO, the organization behind the dollar-pegged stablecoin known as dai, is in the process of voting on whether to further diversify the collateral it accepts for loans beyond cryptocurrency and tokens to include real-world assets (RWAs).

Specifically, Maker would also allow supply chain invoices and musicians’ future royalty streams as security when it lends out DAI. These assets would be represented on the Ethereum blockchain by non-fungible tokens (NFTs), the innovation that spawned CryptoKitties. Small businesses and artists could take the borrowed DAI, which usually trades 1-for-1 with the U.S. dollar, to crypto exchanges like Coinbase and convert it to cash. If approved, the proposals would pave the way for the first application of DeFi to solving a tangible business problem outside the rarefied realm of crypto. The current crisis, like the 2008 financial meltdown, has seen big firms apply the brakes across supply chains, to the point where innovative ways of freeing up working capital for suppliers awaiting payment could be a lifesaver.

“The average crypto user that bought bitcoin when it was a few hundred dollars and is using DeFi to trade and manage their wealth is a very different user from a business that is actually quite cash-strapped,” said Lucas Vogelsang, CEO of Centrifuge, a startup focused on bringing real world assets to DeFi.

The Advantages of such Hedging

Real estate is considered to have a more stable price model than other assets. Moreover, real estate has a clear link in space and in a materialized form. Digitalization of real-world objects will lead to faster and more flexible management of rating positions in the DeFi ecosystem.

Rune offers a broad system of real estate assets that are located in different jurisdictions. This should be created in case the government of one of the countries where the property is located imposes a moratorium on the use of real estate as collateral and digitalization.

But the digitalization of real assets in the blockchain is not a new development. Right now, there is an immovable boom and in the world of cryptography, that is taking shape.

Just as what explained by Rune Christensen “That way, even if e.g. the US decides to shut down all stablecoins and DeFi within their borders, there should be enough decentralized assets, as well as real world assets based in EU, APAC democracies and emerging markets, that MKR can absorb the loss.,” the digital securities participation in the DeFi game filed backed-up by real estate assets, for instance, URPETS’ OST-1, is one of the most exciting blockchain flourishing steps in the very near future.

About UPRETS:

UPRETS is a platform focused on simplifying investment in real estate by advising on and digitalizing assets and securities.

We are dedicated to providing a convenient, legally compliant and advanced real estate digital securitization platform for property developers, asset owners and investors globally.

By utilizing our UPRETS platform, real estate developers and assets owners can create digital securities for their properties, providing investors with various low-barrier, secure and convenient forms of investments.

Backed by a publicly listed real estate conglomerate (NYSE:XIN) and our award-winning, patented blockchain technology, Xbolt, we bring a network, experience and luxury assets to the platform.

For more information about UPRETS,

visit https://www.uprets.io

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MakerDao Forum: https://forum.makerdao.com/t/ost-1-mip6-application-by-uprets-real-estate-backed-digital-security/4438