Bastiaan Don - Blockimmo - Ethereum London

you guys can't hear me just give me a shout and so my name is Bastion I'm from LA chemo and I'm really happy to be here today thank you for showing up and I'm really excited to tell you more but what we've been building and when I say we I quickly want to introduce you to Mike which is our lead developer you want to stand up Mike there you go and Jesse he does everything you will be seeing so now I have to thank you sir so yeah blow chemo is a platform for real estate investments and the name obviously comes from blockchain and emo is the German word for real estate and you might have heard that there's been various cases in the news where there were claims that real estate has been tokenized and transacted and the funny thing what I always found out that you couldn't find any transactions so if you look on the ATM blockchain for example there were no visible traces of these cases and today I want to show you a case where we tokenized our first building that was on the 1st of March in Switzerland in took and I'm just going to give you a high-level overview and then you can interrupt me but afterwards you obviously can also ask questions how we did that so funny enough the property was called hello world or still it and as you can see here there is a like a overview page of of this property and let me just quickly refresh the page there we go so what is important for making an investment in real estate is that you know what are the data and what is the return on investment and we basically show a summary on the left side where the building is located and there's a ton of paperwork on the bottom here which should give you the opportunity to do the due diligence so this property was sold in a so called Club view to work for investors and the complete transaction has been taking place on the ETM blockchain and as a means of currency we use this table coin called crypto Frank and that's the digital Swiss franc on the blockchain which has been issued by Bitcoin Swiss another pioneer in too and their daughter company company is called Swiss crypto tokens so what I talked about before I'm just going to show you now so with block mo every property has its own smart contract and if we have a look on eater scan you will see that this is the smart contract of hello world what is significant is that the Swiss Land Register has something which is called a plot number and we use the plot number as a token identifier so here you will see Switzerland then the canton of two and then the plot number which is for one three three and you also find this in the in the due diligence documents in the land register at cert in addition we also use the Egret number which is up here and for each property we create a million tokens what is important for this first case is that we tokenize 20% of the building value and so 20% of the building value was tokenized and then sold to four investors and also here you will see that in the contract of the crowd sale you can actually see the traces of all the transactions so down here you'll see the investment and for example this transaction was 1.3 million going into the crowd sale during the the private offering of this club deal and then shortly after the security tokens so the tokens of this building were distributed to the four investors and I think that's summarizing the the transaction on chain high level and what is important to know is that our platform is regulatory compliant we did a ruling with two financial regulators one in Switzerland and one in Liechtenstein and in order to acquire and invest in these properties you have to be on board it and in order to on board you have to login with your wallet so I'm gonna I'm gonna log in now with a wallet which is not wide listed yet and I think Michaels who wants to be up front here so very good thank you sir yes so there we go so in order to login you have to sign a message in your mate a mask wallet and this is a first time where we are certain that you are owning your private keys and once you've done this we will write direct you to your profile page and ask you to go through what we call a verification process where two elements are most important so one of them is the whole email part where we ask for your source of funds and the last part is where we do the KYT check and maybe most of you have heard of ID now this is basically where you do I take a picture of your ID at the back and from the watermarks etc etc and if you don't go through this process euro you're not white listed so you come participate in these crowd sales and this also means if you're smart and you think well we're not going to use your graphical user interface we're just going to send it directly to the smart contract it will fail so our checks our own chain if you're not in the white list on chain which is a separate smart contract you can't access the crowd sale you can't access tokens and you can't receive tokens and I think that's quite important and yeah we call it a whitelist it's probably a wrong word because the longer the list gets the slower it might get so it's more like a mapping what we do so there's no speed problems in that sense so let's have a quick look at a wallet which is white listed which is mics so I'm gonna look in again and if I go to Mike's profile you'll see that you steyr one so we can invest up to 100,000 and we blur out the private data just in case you're with friends at a computer but just to prove that it's Mike you'll see here that he is from Illinois the US and yeah what's also interesting what I've showed you so far is the primary market so where you can acquire tokens of a building what we also built is the complete secondary market and as a demonstration we have a property called Matsu which we tokenized and sold I think two weeks ago three weeks ago for 2150 died so again these are no real numbers but it's just to illustrate the functionality and on the right side here you will see that you're able to trade these tokens so if for instance I can buy maybe a thousand of these property tokens and again this is all off chain I'm going to speed up the transaction a little bit unchanged and you will see that the transaction is mining up here and in addition you can also get an email confirmation with all the details of the of the trade you just did so let's see our fastest goes you also get a notification as you can see right here and once the transaction is confirmed there we go alright so you also see it's a little bit tiny because the order wasn't too big but there's a slight increase in price obviously depending on the amount of liquidity that there is thank you and it's it's it's really interesting right it's it's pretty sick when you think that you can trade an asset in this way without the world manager without the bank from your private home with your own connection your own wallet within a couple of minutes so yeah that's the buying part I can also demonstrate the selling but it basically works exactly the same and again it's all completely done unchanged so if you look at this transaction here you will see that the thousand tokens we just talked about are transferred to your wallet yeah so I think in really short high-level real estate the organization primary market secondary market life up and running and yeah that's blocking Oh in short thank you for attention I think in in a first step we're working with normal management companies so it's a you can call it it's more like an indirect investment so the property is managed by professionals if there's a surplus we divide the dividends through the smart contracts but we don't do any these kind of details things yet on chain we don't see a need for that as a start and we might consider something different in a couple of years when a lot of other things are solved first so that that's a really good question what we we are for a reason we're starting with investment properties because it's easier to understand and in this first case is just for the owner to generate liquidity without taking out another mortgage or high fees or loans further down the road we will enable that you can tokenize your private property just like you said before so imagine there depending on the jurisdiction you're in the bank usually finances up to 60 70 percent and suddenly you can tokenize the other 20-30 percent yeah and get liquidity out of that the whole legal side of things with inherits I'm not a lawyer but I'm pretty sure it's not different than how the world functions now so in the end you have a trace of ownership oh yeah I agree yeah that's a good question so we did a ruling with two financial regulators as I mentioned before and one of the key elements is that per tokenization per property we will have to write a prospectus and in there you will find in a transparent way all the legal side of things one of them is the transfer of ownership and what I can say is that if it's a public offering as we have planned then we wrap the assets into a global certificate and there's a way how you can transfer ownership completely paperless using that method so we have a blog post on our blog we're very transparent about that and that's also why we got the green light I think it's a very clean way to to exactly solve this problem whereas in a lot of jurisdiction you still have the obligation to have a writing so a signature on the page with the global certificate you don't have this problem but again this is legal stuff we solved it and there's a lot of information in our blog if you want to know more I was just wondering as well so if you sell this to somebody else [Music] yeah that's exactly it so in the in the prospectus you will find that the traces on the public key theorem blockchain is where you agree that your ownership is transferred to another wallet and back in our system we can identify the wallets because you're being through our onboarding process turkeys don't steal a pair of articles right mr. process how do you handle do you expect there to be any issues with token say being misused sent from hackers or anything else nature so I mean I think you have to be a little bit more exact so you're a first the hacker has to own board be whitelisted right I understand why this probably greatly misjudged that I saw this plan so obviously person to someone you presume there will be workers but say for example someone gets through your whitelist in terms of you know they yeah fake or see documents or so many other do that it acts as the liquidity pool near instantly because you might better contrast is better now very quickly and if you have any sort of backup mags in terms of nobility for that okay yeah you're forgetting one important step in that is acquiring the tokens so these are kind of essence we're talking about millions of Swiss francs or dollars or Euros so yeah you have to be quite interested in doing something wrong but to answer your question do we have a solution if people lose their private keys or if they buy accidents and tokens somewhere I would say for private keys we have so it it's opt-in because we believe in the decentralized way of doing things so if you trust us to have a backup or a way to regenerate your tokens then we can facilitate that if you send the tokens to a wrong address I think that's highly unlikely I mean again these have to be whitelisted yeah so in that sense I think that's an edge case which is not so relevant at the moment [Music] to your first question in the end we're using a highly regulated document right a prospectus so in the prospectus everything is organized and there is no room for conflicts between investors so you as a token holder in a property like I mentioned before it's an indirect investment and it's not that you can go and say I don't want that land which is not working anymore not to be changed so there's a certain barrier so the management company can do his work and what's also important that with each property smart contract we have attached the Dow so if there is a case where we need a voting we can enable people to do so through our platform and then the more tokens you hold the more weights your vote has so that's like a virtual assembly if you like second question help me quickly what was it there's definitely a a master smart contract up to a certain height in the beginning we will adapt to every jurisdiction depending on how their structure is either on the land register side or on the legal side of things so maybe I'm I need to talk to Mike but maybe we can reuse 70% of the functionality the other 30% we have to change parameters but it's still 98 there you go even better so yeah it's definitely scalable everything all the intelligence is on the blockchain level we have a very light weight back-end we completely serverless we're using AWS it's going to be probably one of the fastest adapts you'll ever see right so if you look in the traditional real estate this is not possible so the closest what you probably will find is a REIT or an investment fund and which is always a mixture of certain properties if you're lucky in the same area I usually spread all over a country so here you can say I believe in this street number in this area in Zurich and I want to invest in Frankfurt and in Amsterdam at this street and these are the locations I believe will grow over the next year's and as the second benefit you profit from the rent income obviously and comparing costs I think you just saw the transaction cost is probably 30 cents obviously we introduced ourself as an eel middleman and at the moment we have a transaction fee of 1% for each transaction which is probably in every jurisdiction at least I know of at least half or even more less than any other middleman you will find so that's one key element of our business model obviously we take a management fee of the dividends which are distributed and we have a couple of other let's say revenue models which I'm not going to share today but they're they're more for the long term because we want to remove ourselves as a middleman on the long term and still be able to generate money and this is where a really cool products like compound build finance come in maker and we all have them integrated so also this you will find on our block are you currently ready or regulated to recognize property in the UK that's a good question so we are actively looking for partners in every jurisdiction which is not Switzerland the regulators are already having a hard time to put it politely and to understand what we're doing so if we're going to tell people at the regulators that we're gonna do something international then it's just a big note so what would really help is old-world crowdfunding real estate platforms they already have the licenses and they can basically apply this within a day and and get it get started labelled you with another country four weeks ago and we're probably gonna announce it I'm saying it now but officially announced at the end of March [Music] so to my knowledge at there's no country yet who has a legal definition of a token and as long that is not the case the token is just the shell and you can put any existing financial instrument in there as long as you stick to the regulatory environment and that's the cool thing about our model we support SPG's like this deal but our higher aim for public offerings is a fund and that's exactly what we did a ruling for so why a fund with the fund you're talking about a highly regulated instrument each property will have its own sub fund and you don't have to trust me as the owner or the management director of a company that we will do what we promised we say we do so if you put a property in SPG and a public offering on day one you can collect the funds on day two you buy the property and distribute the security tokens on day three the management is corrupt sells the building and your tokens are worthless so that's why for public offerings we highly suggest or at least we are moving into the direction of a fund and a fund is again it's a regulated instrument there's a depo Bank involved you have a fund manager so in theory and you have a fund ownership of course with people sitting in there publicly known so in theory all four of them have to be corrupt in order to do something against the will of the token holders property has its own sub fund that's really important so we're not mixing any properties together if one property burns down highly unlikely but let's say it as an example all the other properties are not affected not legally not on token level in Switzerland that if you want to do full-fledged trading you have to have a banking license or a security dealer license but they allow you to do secondary training let's call it bulletin board Stan so the clear definition is that the transaction should take place outside of your platform and as you could see in our demo before the transaction takes place on the blockchain DS here and blockchain has nothing to do with Loki MO and therefore it's outside of our platform and that's peer-to-peer right we're actively working on the second project which is called STX security token exchange and there we were building a fully fledged security token exchange fully regulated and yeah we hope to also there be a little bit more specific in the end of coming months [Music] [Applause]