This article was first published on Chainlink
Smart contract developers can use Chainlink oracles to obtain real estate valuations directly on-chain, enabling new DeFi products and markets for the real estate industry.
Decentralized Finance (DeFi) has already shown how a wide range of cryptocurrencies, commodities, indices, stocks, and more can be represented on-chain as NFTs backed by real off-chain assets or collateralized synthetic tokens that provide exposure to underlying assets without actual ownership. Chainlink has been right at the heart of these DeFi markets, provisioning price oracles for each of these asset types. This has allowed new products and markets to be quickly launched in areas like lending/borrowing, derivatives, asset management, and more.
Chainlink is now bringing a new asset class on-chain: real estate. The real estate industry alone is vast, expected to grow from $2687.35 billion in 2020 to $3717.03 billion in 2025. Not only can real estate assets be digitized on blockchains as tokens, but hybrid smart contracts can apply logic to their usage on-chain, such as for trading against benchmarks, using as collateral for a loan, enabling prediction markets based on industry trends, or supporting passive yields through decentralized ETFs that serve as on-chain liquidity.
In the following tutorial, we showcase how developers can use Chainlink oracles today to get high-quality data on-chain regarding residential real estate valuations. This involves access to two premium data providers.
- SmartZip — provides estimations of residential real estate values from their patented Automated Valuation Model (AVM).
- ProspectNow — supplies data on the average price per square foot of residential real estate for the last quarter, given a specific ZIP Code.
The data from both SmartZip and ProspectNow can then be averaged to generate a multi-source valuation used to reliably price tokenized or synthetic real estate assets on-chain and enable new DeFi products and markets. To learn ...
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