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

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million