
<p>Real estate is one of the oldest, most regulated, and desired asset classes. However, <a href="https://www.propertygateplc.com/the-total-value-of-global-real-estate/">the $320 trillion valued market</a> is still one of the most inaccessible for everyday investors. Many potential investors are sidelined by high entry costs and significant downside risks associated with poor investment decisions.</p>



<p>Investors require an improved way to get exposure to the immense benefits of real estate deals with relative ease and minimal risks. Web3 real estate investing platform <a href="https://app.parcl.co/?utm_medium=affiliate&amp;utm_source=Blockworks&amp;utm_campaign=Blockworks5/23"><strong>Parcl</strong></a> leverages blockchain to address the current bottlenecks facing property investing. Parcl brings the world’s most desirable real-world asset (RWA) to the blockchain by offering a platform for users to get exposure to entire cities through an index.&nbsp;</p>



<p>An RWA index is one that measures the underlying price of a tangible asset that exists in the physical world that has been bridged to the blockchain. By investing in an RWA index, Parcl users allocate capital to an investment vehicle that tracks the price movements of a city’s residential real estate market.&nbsp;</p>



<p>What sets Parcl apart is its focus on high-demand markets such as New York and Los Angeles, which are notoriously challenging to invest in due to high prices and agent fees. Beyond tokenizing real estate on the blockchain, Parcl prioritizes these otherwise inaccessible markets, offering an innovative solution for DeFi traders seeking exposure to the global real estate landscape.&nbsp;</p>



<h2 class="wp-block-heading">The Story of Parcl</h2>



<p>Parcl’s story began at the depth of the COVID-19 pandemic, which arguably disrupted the real estate market for decades to come. Parcl’s experienced co-founder Trevor Bacon worked as a hedge fund manager at the technology and payments industry intersection. Bacon’s expertise revolved around identifying relative value trades where one sector was losing at the expense of another and capturing the price appreciation at the winning field.</p>



<p>The COVID-19 pandemic created numerous opportunities, especially in the United States real estate market. For instance, while real estate values in major New York cities like Manhattan crashed by up to over 30%, suburban counties saw a <a href="https://www.nytimes.com/2020/08/30/nyregion/nyc-suburbs-housing-demand.html">corresponding increase in demand</a>, causing prices to skyrocket.&nbsp;</p>



<p>However, there was no viable solution for investors to capture this irresistible opportunity. The traditional investment approach required acquiring an exact house or building in the region, a process that was far from instant. Besides, Trevor Bacon had wondered,&nbsp;</p>



<p><em>“Why can’t [investors] trade the value of general areas like neighborhoods, zip codes, towns, or cities? Why couldn’t an investor be offered exposure to a city or neighborhood instead of having to choose an exact house or building?” Is there a way to avoid a hyper-specific investment that requires so much cash?.”</em></p>



<p>Parcl was born to make these previously impossible trades possible and level the barriers facing global real estate investing. As a case study, Parcl is already empowering international users and DeFi traders to gain exposure to the U.S. real estate market for the first time.</p>



<p>Parcl’s blockchain-based solution further democratizes access to the most lucrative real estate markets, allowing anyone to invest as little as a dollar into a traditionally barricaded asset class. Parcl makes it possible to invest in a single city&#8217;s residential real estate market, unlocking high-demand markets like New York, Los Angeles, and Miami.&nbsp;</p>



<h2 class="wp-block-heading">How Parcl Is Different from Other Forms of Real Estate Investing</h2>



<p>Parcl differs in several ways from other forms of real estate investing. The most notable is that Parcl’s DeFi protocol enables users to invest in neighborhoods and cities instead of specific buildings. Parcl indexes are the first ever real-world asset (RWA) Index that represents a city’s residential real estate market. Each Parcl index represents the median price per square foot in a given geographical location and is freely tradable within the platform’s liquidity pools.&nbsp;</p>



<p>Parcl’s radical approach to real estate investing unlocks numerous benefits. For one thing, it eliminates the particular risks of owning a real estate property within a distinctive region. It empowers investors to gain exposure to multiple RWAs through a single vehicle and thus extract value from the underlying neighborhood.</p>



<p>Parcl’s novel platform for DeFi traders is notable for bringing unparalleled liquidity to one of the world’s most illiquid assets. The current real estate investment landscape requires investors to engage several stakeholders, including agents, brokers, title companies, and local governments, before entering or exiting the market. In the United States, a <a href="https://realestate.usnews.com/real-estate/articles/how-long-does-it-take-to-sell-a-house">house sits on the market</a> for an average of 22 days, with a standard 30 to 45 days closure period also included. In the United Kingdom, it takes <a href="https://housebuyers4u.co.uk/blog/study-best-time-to-sell-your-house/">at least 57 days</a> to go from listing a property to closing a sale.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1292" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=1024&amp;h=1024" alt="" class="wp-image-56870" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=318 318w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=323 323w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=271 271w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-16.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">(Source: <a href="https://housebuyers4u.co.uk/blog/study-best-time-to-sell-your-house/">HouseBuyers4U study</a>)</figcaption></figure>



<p>Parcl’s solution drastically improves the timeline for real estate investors. Trading Parcl’s RWA indexes lower the entry and exit timeline to mere minutes and allow users to proactively manage their portfolios.</p>



<p>Additionally, the Parcl platform represents a significant improvement to Real Estate Investment trusts (REITs) and the idea of passive income from property investing. While REITs focus on investing in distinct buildings within diverse regions, such investments typically rely on various real-world factors beyond the average investor&#8217;s control.&nbsp;</p>



<p>For instance, investors expect the real estate management company to remain proficient and hope that architectural trends in the area do not render properties less attractive for tenants. Parcl narrows down these risk factors by focusing on geographical areas instead of property-oriented features that are more susceptible to constant changes. Investors can thus benefit from truly passive income while eliminating the rigors attached to actively managed properties and investment assets like stocks.</p>



<p>Lastly, Parcl unlocks unprecedented flexibility and access to the most lucrative cities around the world. Unlike fractionalized ownership applications that often provide access to less-desirable areas, Parcl focuses on entire neighborhoods inside the world’s best-performing cities, including New York, Miami, and Los Angeles, with international markets like Paris, London, and Singapore, to be available in the near future. Parcl users can invest in multiple cities at once, predicting market movement in a bullish or bearish direction.&nbsp;</p>



<p>The opportunity to go short on different regions is also a powerful tool for experienced DeFi traders. It provides a way to hedge against macro headwinds, such as rising interest rates, while protecting rental properties within these jurisdictions against a decline in value.</p>



<h2 class="wp-block-heading">The Parcl Platform&nbsp;</h2>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="920" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=1024&amp;h=1024" alt="" class="wp-image-56871" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=454 454w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-18.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



<p>Built on the low-cost Solana blockchain, the <a href="https://www.parcl.co/">Parcl</a> DeFi platform is easily accessible with compatible wallets. Users can invest in their favorite places, with over 15 cities currently listed on the platform, users can build their dream real estate portfolio. Parcl provides cutting-edge data analytics to enable investors to make informed decisions, a liquidity pool for passive income earners, and the flexibility of entering and exiting positions.</p>



<p>Parcl’s protocol further improves the traditional leverage capabilities, which allow investors to own property with as little as a 3.5% down payment. Advanced traders can maximize their real estate portfolio on Parcl by leveraging their original investment up to 10x for greater returns. The platform also offers collar positions mode, permitting investors to minimize the risk of volatility in either market direction by simultaneously holding long and short positions.</p>



<h3 class="wp-block-heading">Who Parcl Is For</h3>



<p>Parcl is ideal for DeFi traders and medium to long-term real estate investors who have conviction in the trends of a particular area and want a relatively easy way to gain exposure to such favorable dynamics. Users can maintain their position in these geographical areas by holding related open positions and providing liquidity to earn passive income.</p>



<p>Short-term traders also benefit from Parcl’s flexible real estate trading platform. Parcl’s current investable markets have yielded an average six percent return in the past quarter, making the offering attractive for investors seeking short-term real estate gains without the long-term commitment of owning and maintaining properties.&nbsp;</p>



<p>Moreover, high-frequency and momentum traders can leverage Parcl’s platform to boost their real estate portfolio performance. Aside from the potential to profitably trade funding rates on listed assets, traders can tap into a superiorly quicker entry and exit route than traditional real estate.&nbsp;</p>



<h3 class="wp-block-heading">Parcl Labs and the Future</h3>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1023" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=1024&amp;h=1024" alt="" class="wp-image-56872" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=402 402w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=408 408w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=343 343w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-19.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



<p>The Parcl real estate investing platform utilizes powerful and granular insights delivered by <a href="https://www.parcllabs.com/">Parcl Labs</a>, the protocol’s lead maintainer. Parcl Labs&#8217; core invention, the Parcl Labs Price Feed (PLPF), tracks real-time changes in the value of residential real estate across multiple geographies and property types.&nbsp;</p>



<p>Parcl Labs adopts an enterprise-level process to evaluate hundreds of millions of data points that form the basis for its innovative price per square-foot metric for tracked neighborhoods. Parcl Lab’s resourceful and granular data collection disrupts the largely-unchanged information ecosystem that has underpinned the real estate industry for several decades. Such high-end data will also pave the way for Parcl to expand into more markets like Paris, London, and Singapore over the coming months. The daily price feeds have already been trusted by top media outlets to provide daily updates of different real estate markets: <a href="https://www.cnbc.com/video/2023/03/10/why-the-housing-market-is-in-increasingly-big-trouble.html?&amp;recirc=taboolainternal">CNBC</a>, <a href="https://www.cbsnews.com/video/us-home-prices-drop-for-seventh-straight-month/">CBS</a> and <a href="https://fortune.com/2022/11/10/pandemic-housing-bust-rocks-bubbly-housing-markets-like-phoenix-redfins-ibuyer-program/">Fortune</a>. </p>



<h3 class="wp-block-heading">Experience the power of simplified real estate investing with Parcl.</h3>



<p>Parcl taps into the power of the blockchain to provide innovative ways for investors to capture the value of real estate price movement in diverse geographical areas. This previously impossible trade demonstrates blockchain&#8217;s potential to solve significant problems with RWAs and underlines Parcl&#8217;s commitment to addressing these challenges.</p>



<p>At its core,&nbsp; Parcl levels the playing field for everyday investors by providing unparalleled liquidity, desirable locations, global access, and advanced features for leveraging price movement in multiple directions. Parcl&#8217;s core proposition of allowing investors to gain exposure to entire neighborhoods and cities without owning specific properties in the real world is a game-changer for the simplified real estate investing landscape.</p>



<p>Parcl Labs is poised to significantly drive mainstream investment into real estate by providing cutting-edge insights and trading solutions. The race to disrupt the multi-trillion dollar industry is well underway, and Parcl&#8217;s upcoming expansion into new territories will only pave the way for more investors to build truly global real estate portfolios!</p>



<p><em>This content is sponsored by <a href="https://app.parcl.co/?utm_medium=affiliate&amp;utm_source=Blockworks&amp;utm_campaign=Blockworks5/23">Parcl</a></em>.</p>



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How to Access the Most Desirable Real Estate Markets in the World With Blockchain Technology


<p>Traditional real estate has been the “safe” investment of choice for decades. Because of the simple fact everyone needs a home, this need has long-provided stability against sharp declines in value that investors find indispensable. Because of these fundamentals, real estate saw some of the sharpest appreciation in its history of the last few years. While it has slowed a bit, it was still the major relative outperformer in 2022. Combine this with the rampant housing shortages and the prospects of buying a house for both Millennials and Zoomers seem pretty bleak.</p>



<p>Real estate experts suggest workarounds such as house hacking or equity partnerships to get exposure to these markets. But for most millennials who don’t even have a credit line and struggle to clear their student debt, these methods are often neither feasible nor smart.</p>



<p>In this article, we’ll go through traditional “low investment” methods for real estate, and how crypto natives can gain exposure to the real estate market without breaking the bank.</p>



<h2 class="wp-block-heading"><strong>Traditional ways to invest in real estate with little to no money&nbsp;</strong></h2>



<h3 class="wp-block-heading">FHA loan</h3>



<p>It’s no secret that the US Government wants its citizens to own their own homes. While it’s never been more difficult to do so, the government-backed FHA loan program is one that puts a home in reach for many. As long as you agree to live in the home as a primary residence, the program offers favorable loan terms and lighter eligibility requirements for buyers. And this couldn’t come at a better time. For many prospective buyers who could qualify for a conventional mortgage, the next hurdle is having enough capital for a down payment.&nbsp;</p>



<p>This is really where the FHA loan shines. Contrary to the commonly held belief that you need a 20% down payment to get into a home, you only have to put down 3.5% with an FHA loan. For the Q4 2022 median home price of almost $470,000, that’s the difference between putting down $94,000 and $16,450. While there are downsides to the FHA like agreeing to live in the home for a certain amount of time and paying monthly mortgage insurance for the life of the loan, this difference in down payment requirements is more than worth it for those who would otherwise be unable to afford a home.  </p>



<h3 class="wp-block-heading">Equity partnerships</h3>



<p>An equity partnership is a business deal between two or more investors who pool their funds, resources, and respective skills to purchase, develop, or lease property. Both the risk and the profits are divided depending on each partner’s level of contribution to the business.</p>



<p>Just like in normal business deals, there is potential for conflict between the partners, especially if there’s a disproportionate distribution of responsibilities. On one hand, usually the person with less capital in the deal will offer more sweat equity on the property, often leading to the aforementioned conflict over feelings of one party pulling more weight than the other for less profit. On the other hand, if things go south with the partnership, the investors who own the most equity have the most to lose. Because of these reasons, entering an equity partnership must be made carefully with these dynamics in mind.</p>



<h3 class="wp-block-heading">House hacking</h3>



<p>The house hacking trend emerged out of a desire to live rent-free. The hacker’s real estate strategy is to acquire a house for a low down payment and offset their mortgage payments by renting out parts of their property — essentially covering living expenses.</p>



<p>The issue with house hacking? You’re legally required to live in the same house as others, so if you’re not used to having roommates, it can get uncomfortable. Plus this operation is impossible to scale. So, while this might be a good strategy if you don’t have enough upfront cash for a starter home, it’s not for everyone.</p>



<h3 class="wp-block-heading">Rental arbitrage</h3>



<p>Rental arbitrage is a way to make rental income without owning property. Instead of utilizing low down payment options, this close cousin to house hacking provides rental income through signing long term lease agreements that let the leasee list the property as a vacation rental.&nbsp;</p>



<p>While this strategy may offer an additional income stream, it doesn’t provide full real estate exposure. If done successfully though, the rental income can provide enough of a down payment to make a purchase. There are regulatory risks since zoning laws differ across the country. For example, in California, the person listing the rental is required to live in the unit for a majority of the year.&nbsp;</p>



<h3 class="wp-block-heading">Microloans</h3>



<p>Microloans are small-scale loans, typically under $50,000, financed by individuals instead of traditional financing sources such as banks.</p>



<p>Microloans are great when you need fast financing, but their short repayment terms of just under a year and high interest rates are not ideal for long-term real estate investments. Thus, microloans can be used as a way to supplement your capital, not finance your entire real estate journey.</p>



<h3 class="wp-block-heading">REITs</h3>



<p>REITs are a popular way to gain more liquid exposure to the real estate market, without buying physical properties.&nbsp;</p>



<p>In REITs, you buy publicly traded shares of a revenue-generating real estate company such as warehouses, apartments, data centers, commercial developers etc. The company uses that cash to finance its operations and gives you a substantial portion of its generated income as dividends.</p>



<p>But, of course, that’s not without its downsides. All property investment decisions are managed by the general manager – excluding any input from investors. REIT companies are usually heavy in debt and highly centralized. And since you have no control over how the REIT manages or buys properties, nor where they are located, you are unable to manage the risk of the property investment.&nbsp;</p>



<h2 class="wp-block-heading"><strong>Digital real estate investing</strong></h2>



<p>With traditional real estate being inaccessible for most people, digital real estate investing has seen significant interest. New asset classes such as fractional ownership via NFTs, metaverse land, and tokenizing real-world assets have opened the market to a wider pool of investors.&nbsp;</p>



<p>In this section, we’ll look at the major digital real estate investing avenues and how they have performed.</p>



<h3 class="wp-block-heading">Metaverse land&nbsp;</h3>



<p>Imagine a world where you can go to a music concert, explore a museum, play a car race, all while sitting at your desk. That’s exactly what a metaverse like Decentraland offers — a virtual substitute for a real-life experience. Buying land in Decentraland equates to owning a part of this ecosystem — similar to owning a plot of land in the real world.</p>



<p>During Facebook’s rebrand to Meta, most metaverse projects saw exponential growth in trading volumes for their land NFTs — with the average price reaching up to $17,000 in the January of 2022. However, the onset of the bear market has been the reality check that this ecosystem was always bound to contend with. </p>



<p>There have been few answers to the simple question of how should someone ascribe value to a potentially infinite resource. There’s nothing keeping developers or community members of a metaverse land project from creating more real estate, and this has been at least partially responsible for the drastic price decline in the asset class (with an average 85% decline to $2,500). This volatility has led many investors to rethink the viability of investing in virtual land for the long term. As of now, it appears that this asset class may depend on the “greater fool theory” for future price appreciation.&nbsp;</p>



<h3 class="wp-block-heading">Fractional ownership&nbsp;</h3>



<p>As the name suggests, investors own a fraction of an asset in fractional ownership, allowing them to get in at a significantly cheaper cost and get exposure to high-value assets. Even though that might sound like the best of both worlds, it presents its own set of challenges and comes at a cost to homeowners.</p>



<p>Fractional ownership offerings are typically limited to a handful of high-value assets, constraining the options for investors to choose from. Naturally, the demand for specific properties is usually disproportionate – leading to lower-quality deals. If the demand goes down, this asset becomes highly illiquid.&nbsp;</p>



<p>To understand the real risks of fractionalization, we’ve to first understand the current real estate landscape. The low supply of real estate and the perpetual demand of needing a place to live makes it an attractive investment choice.&nbsp;</p>



<p>But the increasing financialization of this market has unsustainable consequences for the cost of living. Patrick Condon summarizes this problem in his <a href="https://thetyee.ca/Culture/2020/02/25/Push-Documentary-Tracks-Housing-As-Latest-Investment-Commodity/" target="_blank" rel="noreferrer noopener">article</a> about Push, a documentary covering the ways big finance is driving housing prices,&nbsp;</p>



<p>“The “financialization” of housing is an out-of-control global pandemic, driven by the hunger of the financial management industry to find things to buy that will increase in value in a world where too much money is chasing too few assets — and where those assets are returning less and less profit as a result.”</p>



<p>Digital fractional ownership is a double-edged sword in that it contributes to the same problem by increasing speculative demand. More companies are removing supply from the system by buying homes with the intention of raising more money through fractionalization. This directly hurts millennials’ ability to buy a starter home.&nbsp;</p>



<p>More significantly, it creates a first come first, served system that favors institutional players. So even though retail investors may have a lower cost barrier, the deal quality is much lower than traditional offerings. This system also lacks a breadth of offerings needed to compare investment decisions – increasing risk to investors.</p>



<h2 class="wp-block-heading"><strong>DeFi and real estate – the volatility problem</strong></h2>



<p>In 2021, <a href="https://www.naiop.org/Research-and-Publications/Magazine/2021/Winter-2021-2022/Development-Ownership/How-Real-Estate-Tokenization-Could-Revolutionize-Future-Capital-Raising-Efforts" target="_blank" rel="noreferrer noopener">$32 million worth of real estate</a> had been tokenized. By February 2022, that number had already grown to <a href="https://blog.stomarket.com/security-token-market-real-estate-report-february-2022-32896e51eedc" target="_blank" rel="noreferrer noopener">$50 million</a> — almost double. This clearly shows the potential of the tokenization of real estate.</p>



<p>The main issue, though? If the DeFi summer of 2020 taught us anything, it’s that without real-world utility and adoption, DeFi protocols can be massively volatile and prone to manipulation by larger players. These larger players like FTX and other centralized parties have shown the world with painful clarity how the cryptocurrency industry is far from being immune to the greed and corruption seen elsewhere in more traditional financial systems. These high profile implosions have only reinforced the need for DeFi to continue building solutions that provide stable backing to protect against volatility.&nbsp;&nbsp;</p>



<p>Combining the power of DeFi with the stability of real-world assets and synthetics brings about such a solution. This combination can effectively level out crypto portfolios through more stable asset classes like real estate. The Parcl Protocol is making that a reality. Let’s see how.</p>



<h2 class="wp-block-heading"><strong>Using derivatives to invest in real estate</strong></h2>



<p>The Parcl Protocol allows you to get exposure to the residential real estate market, with digital assets called ‘Parcls’. Each Parcl is tied to a price feed powered by the blockchain, which tracks the average price per sq. ft in popular real world neighborhoods. So, when you invest in a Parcl, you’re not buying actual land or even fractions of it — you’re buying a stake in a digital market that tracks real estate prices in a particular neighborhood.</p>



<p>Here’s how Parcl can tilt the real estate game in your favor:</p>



<h3 class="wp-block-heading">1. Higher investment scope&nbsp;</h3>



<p>Instead of restricting your investment scope to a particular house, like in fractional ownership, The Parcl Protocol allows you to invest directly in high-demand neighborhoods. So, even though finding the right investment properties might be tough in New York, you don’t have to worry about limited inventory with Parcl.&nbsp;</p>



<p>You can invest both at a granular level or a broad level. The granular level allows you to invest with no minimum, so you can start gaining exposure with as little as $1.&nbsp;</p>



<p>And at the broad-level, you can access the returns of an entire city or neighborhood which is far more stable than an individual property.</p>



<h3 class="wp-block-heading">2. Highly liquid and accessible</h3>



<p>The Parcl Protocol solves the age-old problem in the real estate market: affordability while maintaining liquidity. It achieves this through synthetic assets that aren’t tied to a specific property, but a neighborhood instead. Then, using its automated open market, you can freely trade your tokens with others who want exposure to that area.&nbsp;</p>



<p>Therefore, synthetic assets allow investors to gain broader exposure to the real estate market, without worrying about the illiquidity of fractional ownership or inflating prices.</p>



<h3 class="wp-block-heading">3. Hedging your investments with derivatives</h3>



<p>Apart from price tracking, <a href="https://www.parcl.co/">Parcl Protocol</a> helps you hedge your investments by taking positions on them. It works similarly to taking a bet on the price of an asset. If you predict that a particular neighborhood’s real estate will decline in price, say everyone is moving due to political reasons, you can open a short on it. If you’re right, you can see a tidy return on your investment from your short.</p>



<p>Conversely, if you’re confident about a neighborhood — maybe there’s solid infrastructure growth — you can go long. If the asset price increases, you benefit directly. Depending on how you want to structure your portfolio, you can use shorts and longs strategically to support your investment thesis.</p>



<p>Real estate is still one of the leading hedges against inflation and a primary source for creating generational wealth. However, the real estate market has clearly taken a turn for the worse, with rising rates, unfair monetary policies, and shortages. As such, this market is out of reach for the new generation. Solutions like Parcl’s synthetic asset technology are fundamental to bridging the disparity in real estate markets and helping rising generations take greater ownership of their future.</p>



<p><em>This content is sponsored by <a href="https://www.parcl.co" target="_blank" rel="noreferrer noopener">Parcl</a>.</em></p>



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The Crypto Native’s Guide to Real Estate Investing

Morgan Chittum

<div id="highlights-block_621eabc4c01c6" class="highlights">
        <ul>
                <li>Led by Archetype, raise investors include Coinbase Ventures, Dragonfly Capital, Solana Ventures and ParaFi</li>
                <li>Parcl has 15 full-time employees but hopes to expand its staff to 25 by the end of the year</li>
            </ul>
    
</div>



<p>Parcl, a startup that digitizes real estate investments via the Solana blockchain, raised a $4.1 million seed round Tuesday, earmarked for marketing and staffing.</p>



<p>The New York-based company has 15 full-time employees but aims to expand its staff to 25 by year-end, co-founder and CEO Trevor Bacon told Blockworks.</p>



<p>“It&#8217;s a tough hiring environment, but we&#8217;ve managed with our team and vision to have been able to attract some of the best talent,” Bacon said.</p>



<p>Parcl’s mission is to give everyone a chance to invest in real estate, a market which has historically high barriers to entry, but consistent returns.</p>



<p>Parcl’s protocol allows users to invest in a digital square foot of real-live property via its price index, which replicates the price per square foot in various neighborhoods. The platform has transaction fees, but no minimum investment requirement.</p>



<p>“[For example], Tribeca will have a price per square foot of like $2,000, and we&#8217;ll call that a ‘parcl,’” he added. “‘A parcl’ is one square foot of any given neighborhood, and the blockchain is what allows you to create those assets and trade them. It’s basically a way to gain exposure to real estate.”</p>



<p>Led by Archetype, raise investors include Coinbase Ventures, Dragonfly Capital, Solana Ventures, ParaFi, Shima Capital, Slow Ventures, Tribe Capital, Not Boring Capital and FJ Labs.</p>



<p>Parcl will launch a testnet, along with the release and sale of a non-fungible token (NFT) collection in the coming weeks. All of the proceeds, Bacon said, will go toward buying someone a house.</p>



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