The current bitcoin price has shocked investors leaving some to look towards a peer-to-peer stable market such as real estate. However, investors agree that the two major problems with the real estate industry are illiquidity and centralization. Propy aims to solve these problems by providing a platform for international peer-to-peer real estate transactions.
What is Propy?
According to their website, Propy is a global real estate marketplace with decentralized title registry. The company is aiming to build a unified property store and asset transfer platform for the real estate industry.
This will allow buyers, sellers, brokers, and title agents to come together to execute transactions via smart contracts on the blockchain. Propy wants to provide the peer-to-peer network for real estate professionals to conduct these transactions online.
Digital transfer of ownership conducted on the Propy Registry. The registry uses smart contracts in order to track and execute real estate transactions that are in accordance to regional regulations.
Propy, built on the Ethereum blockchain, one of the most popular blockchain platforms out there. On this platform, users can trade ERC20 “PRO” tokens to conduct exchanges on the peer-to-peer network.
Propy is tokenized and in order for a user to interact with the Propy Registry, they must have PRO tokens. For example, when users change ownership of a title or register a new title they will use tokens.
The History of Propy
Propy is led by CEO Natalia Karayaneva, who founded the company in 2015 with the intention to resolve issues foreign buyers encounter while investing in foreign real estate.
She has a background in real estate development and is an advocate for blockchain technology. Karayaneva roadmapped Propy’s global property market and decentralized title registry. Her intention is to disrupt the $340 billion cross-border real estate market.
“I’ve been a real estate developer for 12 years, constructing 100–400 unit vacation developments and selling them to foreign investors,” Karayaneva said. In addition, “My team, which consists of brokers, lawyers, and accountants, has been facilitating cross-border payment assistance and title deed issuance assistance in-house. Being a software engineer by profession, I believe in solving problems by automation.”
Karayaneva discovered in early 2016 that blockchain and it’s peer-to-peer network has the potential to change the global real estate market.
“I then asked a friend of mine, Alex Shelkovnikov, [formerly] the blockchain advocate at Deloitte, to help us engineer a solution for cross-border payments, and he advised us to talk to the crypto engineer and entrepreneur Andrey Zamovskiy, who later became our chief blockchain architect,” said Karayaneva.
According to Karayaneva, Zamovskiy influenced the Propy team to apply the solution of “double spending” for digital assets to real estate ownership transfer. Not to mention that double spending is when two conflicting transactions are sent in rapid succession into a blockchain network.
The Problem with International Real Estate Investing
In real estate, there is often a lack of trust and is an environment susceptible to fraudulent activity. For example, unsuspecting investors often find themselves being taken advantage of in foreign countries.
Karayaneva believes that blockchain technology is the solution to this problem. As a matter of fact, automating real estate purchases on a transparent network is the missing link.
“Cross-border real estate transactions usually involve language and cultural complexities, of course,” said Karayaneva. “But the localized and bureaucratic nature of real estate, the difficulties in cross-border payments and the need for myriad third parties involved in all aspects of the transactions can lead to long delays, at best. At worst, fraud concerns and just general transaction friction can make buyers hesitant to enter these markets. This leads to less liquid markets, which exacerbates problems.”
Propy aims to solve these issues by assembling and translating listings in global cities. Furthermore, the use of blockchain smart contracts allows each party to sign off on each transaction that consists of payment and legal paperwork.
The issue with Propy’s current legal framework is that it is based on U.S. cases that comply with California legislation. The service is narrowly focused for now however there are plans for international legal frameworks.
Despite this, Propy is a profitable idea that may change the way real estate investors currently do business. There is hope that Propy will make the market accessible to a greater number of people.
For now, Propy has a long way to go and a lot to prove before it can become sustainable.