This article was first published on Chainlink
Real estate, the largest asset class by value which is expected to grow from $2687.35 billion in 2020 to $3717.03 billion in 2025, is primed to be disrupted by the introduction of blockchain technology. Not only can real estate assets become digitized as tokens on blockchain ledgers, but smart contract developers can deploy on-chain logic that automates various real estate transactions, products, and markets using external data inputs and traditional settlement outputs.
Hybrid smart contracts–smart contracts that leverage both the security of blockchain networks and the richness of real-world data inputs–give holders the ability to use their tokenized real estate assets on blockchains in unique ways, such as trading them against reliable benchmarks or supplying them as collateral for a loan. Additionally, exotic derivatives products can be created and settled on-chain using an external data feed, allowing stakeholders to hedge against various real estate industry trends. Each of these hybrid applications requires access to existing APIs like premium real estate data providers and payment gateways, which Chainlink makes easily available on-chain for both developers and businesses eager to explore the possibilities of blockchain-based real estate applications.
The Benefits of Blockchain Technology for Real Estate
Blockchains allow real estate property to be digitized as fungible or non-fungible tokens (NFTs) on blockchains, giving holders percentage ownership or whole ownership over the physical property they represent. Hybrid smart contracts enable the creation of data-driven logic that allows holders to use their real estate assets on-chain in unique ways, or even to gain exposure to the real estate market without actually holding the underlying assets.
Blockchain-based real estate applications include:
- Transferring real estate ownership based on predefined conditions
- Locking up real estate NFTs as collateral for on-chain loans
- Triggering recurring rental payments at the beginning of each month
- Offering derivative products ...
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