Global equity marketplace Vesta Equity has chosen the Algorand blockchain to launch its new real estate tokenization services, disrupting a decades-old industry and opening up the possibility for homeowners to convert their equity into digital assets.
Under the new partnership, Vesta will utilize Algorand to further disintermediate the numerous parties involved in the traditional home equity and borrowing space. With Vesta eliminating expensive intermediaries from the process, Algorand’s technology will allow all data to be readily available and verified automatically.
The new marketplace will enable homeowners to convert their home equity into digital assets and sell a percentage of it to accredited investors without compounding interest or requiring an outright sale.
Vest Equity co-founder and CEO Michael Carpentier said:
“We have become a society of debt, but that journey needs to shift to create a more prosperous future for all. At Vesta, we believe the application of the right technologies hold the answer.”
W. Sean Ford, Algorand’s COO, said his company and Vesta Equity share a common vision with respect to blockchain technology and its role in creating more opportunities for real estate investors. He explained:
“By expanding opportunities for homeowners as well as investors, Vesta Equity is at the forefront of creating new, more accessible market opportunities by bringing participants together through Algorand’s technology.”
Real estate tokenization is considered one of the most compelling use cases for blockchain, but until now, the technology has gone underutilized in the sector. A lack of institutional appetite and issues with security token listings have hampered growth in this once-promising space. Overstock.com’s tZero security token platform was supposed to solve the latter problem, but the dramatic exit of CEO Patrick Byrne in 2019 has left the project without much momentum.
At the surface, however, blockchain technology provides plenty of promise for asset owners and investors alike. By tokenizing real estate, fund owners can raise capital much more efficiently. Investors, meanwhile, receive low-barrier access to private real estate.
Perhaps one of the most challenging features of tokenizing real estate is the regulatory implications. By breaking down an asset into smaller and less expensive parts, fund issuers could be entering the realm of securitization with their new offering. If so, this puts them under the watchful eye of the Securities and Exchange Commission, or SEC.
Regarding securitization, he explains that “the programmability of the token creates an important distinction from more traditional securities in that business rules can be applied as logic that automates processes involved with the transaction.”
He also explained that Vesta’s homeowners’ offerings would “likely fall under the SEC’s Regulation D,” which provides exemptions that would otherwise be required for traditional securities.
“At launch, we would also be making the offering only available to accredited investors within the confines of our own marketplace. Our intended framework with the SEC would also allow for aftermarket trading within our marketplace.”
Vesta CEO Michael Carpentier tells Cointelegraph that, by tokenizing real estate equity, his company is “converting financial rights associated with the traditional, real-world asset into a token that can be transacted digitally and benefit from advantages such as liquidity, transaction speed, and transparency.”
Grayscale Total Assets Value Soars Above $50 Billion Following the Recent Bitcoin ATH
Top-tier digital assets manager Grayscale has seen an increase in the value of its total AUM (Assets Under Management) to above $50 billion as bitcoin’s price marked a new all-time high recently.
The Grayscale Bitcoin Trust (GBTC) is now worth over $41 billion, while the Ethereum Trust (ETHE) holds over $7.4 billion.
The Road to $50B
As reported, Grayscale added five new tokens to its list of trust offerings, including Chainlink (LINK), Basic Attention Token (BAT), Decentraland (MANA), Filecoin (FIL), and Livepeer (LPT).
According to the firm, this integration came shortly after seeing a large inflow of clients demanding exposure to other cryptos, while most dominant assets consolidated at the beginning of March.
04/14/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) April 14, 2021
Now, the company reports that its total assets under management (AUM) have grown in value to more than $50 billion for the first time ever. It’s a major milestone for Grayscale.
At the time of writing, BTC is trading at around $63,000 while Ethereum’s ETH eyes $2.5K and a lot of other altcoins looking very well across the board.
AUM Growing Fast
As the interest for crypto assets increases, the firm’s total AUM is growing rapidly. On April 9, Grayscale’s total AUM grew by more than $1 billion in less than 24 hours. Michael Sonnenshein, the CEO, has stated that the firm amplified its suite of investment trusts as accredited investors and clients were demanding exposure to more cryptocurrencies.
Institutional investors have also intensified their demand, while Bitcoin mining companies are making big purchases of Antminers. As reported, Riot Blockchain bought 42,000 S19 Antminers from crypto-mining company Bitmain, totalling a purchase worth 138.5 million.
Finance officials pour cold water on cryptocurrency amid Coinbase celebrations
Finance officials from both sides of the globe are taking the opportunity to criticize the value and utility of cryptocurrencies, as media focus intensifies on the space following Coinbase’s direct listing on the Nasdaq.
Bank of Korea Governor Lee Ju-yeol said cryptocurrencies had “considerable limitations” as a method of payment, following a monetary policy meeting on Thursday, reports local outlet KBS World.
While asserting that it was difficult to accurately value cryptocurrencies due to their volatile price fluctuations, Lee said the BOK had not shifted on its stance that they had no intrinsic value.
Lee also referenced United States Federal Reserve Chairman Jerome Powell, noting that the head of the Fed shared his sentiments on the crypto space.
Hours earlier, Powell stated in a virtual interview with The Economic Club of New York that cryptocurrencies were purely speculative, adding that they had not been readily adopted as a means of payment.
“They’re really vehicles for speculation. They’re not really being actively used as payments,” Powell said, according to CNBC.
Flying in the face of Powell and Lee’s comments is the recent adoption of cryptocurrency by major global payment processors. Visa, Mastercard and PayPal all began to implement crypto payment options in the past few months, while Tesla introduced Bitcoin (BTC) as a payment option for its electric car business.
That’s not to say Bitcoin and other cryptocurrencies are a sure thing as far as payment methods go. Bitcoin’s average transaction fee is currently around $30 due to its limited block size and resultant network congestion. For this reason, payment processors are often forced to eat such transaction fees as a cost of doing business. Until they can no longer afford to, as was the case with gaming platform Steam in 2017.
One point of agreement shared by Powell and the crypto community is the suggestion that cryptocurrency could be compared to gold — but for completely different reasons. Cryptocurrency (particularly Bitcoin) proponents argue that the technology can be used as a long-term store of value in the same manner as a precious metal.
Powell, however, intended the comparison to be derisory. The Fed chairman’s opinion of gold seems to be no better than that of cryptocurrency.
“For thousands of years, human beings have given gold a special value that it doesn’t have,” said the chairman of the fiat-printing center of the United States.
As XRP Skyrockets, Ripple CTO David Schwartz Wants You To Consider Selling Some Crypto Holdings
David Schwartz, the Chief Technical Officer at Ripple Labs, has been giving some pretty positive investment advice, but it comes at an interesting time.
Simply put, the CTO believes that if someone has life-changing amounts of different cryptocurrencies, that person should definitely consider selling some of the said cryptos in order to reduce the risk of failure and over-exposure. This was communicated to Schwartz’s followers in a tweet, and he later clarified that this investment advice is not representative of some prophecy or projection about the future of any cryptocurrency market, and is mostly just general advice.
Schwartz said in the tweet that it was likely to be his “least famous tweet” ever, but he nonetheless advised his followers that selling a considerable portion of their respective cryptocurrency assets isn’t a bad idea, particularly given the industry’s unpredictable nature. This is definitely real, as there have been countless examples of people keeping their investments for far too long, only to see the valuation of those assets plummet by the time the owners attempt to cash them out.
Furthermore, with the present state of the cryptocurrency industry, XRP has risen by 850 percent this year while Bitcoin has simultaneously risen by 790 percent to a new all-time peak of $64k.
Schwartz has, in the past, taking his own advice. In 2019, he admitted to selling $40,000 in ETH prior to the late-2017 bull run in order to buy solar panels. In the most recent thread, he mentioned that, in retrospect, he could not have sold the majority of it. “I guess I was hoping it would come back down so I could buy back in,” he tweeted. “However, it did not succeed. Of course, you may come to regret taking smaller risk,” he said.
Ripple V. SEC
The legal battle between Ripple and the SEC is still ongoing. Despite recent wins for Ripple, the matter is still far from settled. Furthermore, during a legal proceeding, executives normally maintain a low profile so that their comments do not become weapons to be used against them.
Schwartz, on the other hand, was thinking of cryptocurrencies in general, not XRP directly, and he also suggested that cryptocurrency prices can and so often do deteriorate.
However, XRP seems to be an exception to this rule, as its particular price has been slowly stretching, hitting its highest level in three years at just over $1.8.
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