UPRETS View | When Stable Coins Meet DeFi, How Would That Affects Real Estate Investment?
Stable coins meeting DeFi is expected to change the whole real estate investment scenario, as it will bring much-needed stability that not there with cryptocurrencies. The past few years have witnessed a number of technological innovations and developments, and while the world focused on Bitcoins and other cryptos, a new entrant called stable coin slowly made its way into the limelight. Stable coins emerged in 2018, with the primary motive of shielding its users from the high instability or volatility associated with cryptos.
Today, they have become the focal point of discussion of quite a few international bodies. Due to its stable nature, as the name suggests, the stable coin has become a preferred option for those who want to invest in real estate using digital securities.
DeFi Encounters DAI Stable Coin
DeFi is a movement started by a group of projects building financial products and services on the Ethereum blockchain to promote their work as well as for the development of an open financial system. Now, it has become the most popular use case for Ethereum. The launch of the DAI stable coin by MakerDAO has changed the real estate investment scenario as well as DeFi. DAI and other stable coins such as USD-Circle (USDC) are cryptocurrencies whose value is pegged to something for stability; in this case, the US dollar. This stability will make real estate investments easier as well as more reliable.
DAI is not a dollar-backed stable coin; it is a blockchain-based stable coin. It is a vital distinction. DAI’s price stability functions independently of any real-world counterparty risk. Some stable coin systems simply accept deposits of currency and issue Digital Securities in exchange. However, what makes DAI stand apart is that it’s minted using collateralized debt positions (CDPs) created on the MakerDAO platform.
Real World and Crypto Assets Will Come Together
Now, the aim is to bridge the gap between cryptocurrencies and real-world assets like real estate. Particularly in the DeFi space, which aims to provide a borderless financing infrastructure, the first few steps are made to bring real-world assets as collateral for loan issuance. MakerDAO, the community that is behind the DAI stable coin, arguably the most popular DeFi project, has confirmed the vote on to allow real-world assets to be included as collateral options. The startup Centrifuge has also developed a protocol that lets users digitalize real-world assets against which ERC20 digital securities can be issued. This allows real-world asset securitization as these digital securities are interest-bearing and will be issued as Non-Fungible Tokens (NFTs).
DeFi applications, which are mostly built on top of the Ethereum blockchain, promise to give access to more people to borrowing, lending, and other services because they do away with the need to go and transact through any financial institution. When it comes to MakerDAO, the system built with DAI lets users deposit cryptocurrency-denominated collateral to take out loans denominated in the US dollar-pegged stable coin DAI. Getting real-world assets, like real estate, involved in the DeFi industry is what MakerDAO with its DAI stable coins is trying to achieve.
Making Decentralized Financial Instruments More Accessible
Stable coins are booming as they have made decentralized financial instruments more accessible and provided users with more chances to gain long-term benefits. For instance, Ethereum stable coins, which constitute roughly 50 % of all stable coins, with a total value of more than $7.3 billion — a remarkable 800% surge from the beginning of 2019 — have outperformed even the traditional financial applications such PayPal due to DeFi considerably facilitating value transfers. This has made stable coins a great investment opportunity for real estate as well as other real-world assets.
Playing A Strong Role within the DeFi Movement, DAI Is Changing Real Estate Investments
Borderless and decentralized, DAI is the world’s first unbiased currency, offering users greater control of their assets, an increase in convenience, and a higher degree of transparency regardless of location and financial history. The stable coin offers quite a few advantages over traditional currencies, creating opportunities as well as solving problems:
· It can be accessed by anybody, including under banked and unbanked individuals, anywhere.
· It can be used to buy and sell real estate.
· It can be transferred anywhere around the world promptly.
· It is programmable money providing the foundation for innovation and helpful financial solutions.
Conclusion
DeFi is changing the financial services world. The integration of stable coin and DeFi into the traditional financial services sector is driving innovation globally and resulting in greater transparency, control, and choice for consumers. And MakerDAO and DAI are at the center of this movement. Apart from that, there are platforms like UPRETS that are making it easier to invest in real estate using digital securities. Many real estate assets are expected to benefit from the integration of DeFi and stable coin as their current markets are plagued with inefficiencies in the transaction processes, poor liquidity and limited accessibility.
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,
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