Investors Can Now Buy Home Equity Slices Via Fractionalized NFTs

The new marketplace joins a growing list of startups trying to incorporate real-life use cases for NFTs

article-image

Source: Shutterstock

share

key takeaways

  • “Imagine a world where, with a few clicks of your mouse, you can access the entire accumulated value of the equity in your home without incurring debt or selling and moving,” Vesta’s CEO said
  • The fractionalized NFTs are packaged as a security and registered with the SEC

A real estate startup has rolled out a service that allows homeowners to part with a fraction of their equity via fractionalized NFT sales.

Vesta Equity tapped the Algorand blockchain for its NFT (non-fungible token) marketplace, which it contends is the first peer-to-peer exchange that allows homeowners to leverage and sell a slice of equity with digital collectibles.

“Imagine a world where, with a few clicks of your mouse, you can access the entire accumulated value of the equity in your home without incurring debt or selling and moving,” CEO Michael Carpentier said in a statement.

The fractionalized NFTs — which do not confer residential rights — are packaged as a security and are exempt from registration with the Securities and Exchange Commission. Holders, Carpentier said, can build a portfolio of real estate assets to complement traditional equity investments.

Qualifying as a security and meeting the SEC’s regulatory requirements have often been points of ambiguity for crypto companies.

Last year, a class action complaint was filed against Dapper Labs, the creator of popular NFT collections such as NBA Top Shot Moments, alleging that some of the digital collectibles were acting as unregistered securities.

Vesta sees little gray area in the SEC’s interpretation — Carpentier says he doesn’t “feel the regulatory environment is unclear.”

“The SEC’s position on fractionalized real estate assets is very clearly articulated,” he said. “They consider them securities, and their sale needs to be made under an SEC offering type.”

The marketplace joins a growing number of NFT projects vying for real-life use cases.

Blockchain startup Propy last month auctioned a Florida home as an NFT for over $653,000. Propy CEO Natalia Karayaneva told Blockworks the company’s services could “turn into a standard in the [real estate] industry.”

“NFT sales reached $4 billion in December 2021, and real-world assets will soon represent a significant portion of that market,” Karayaneva said.


Correction: Fractionalized NFTs are exempt from registration with the SEC. This story was updated on April 4th, 2022.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit