A Deep Dive into dEquity Assets-Backed Crypto
Understanding the Basics and How Yield Is Generated
The world has changed a couple of times already in the past few decades. With the first web revolution, mobile app and rise of social media, we're getting to the point when the digital world is completely changing once again, and even macroeconomics and conditions are changing drastically, creating new digital emerging economies.
In this article, we'd like to elaborate on a new type of asset that is being introduced on the global market right now – ABC or asset-backed crypto.
What is Asset-Backed Crypto in a nutshell
ABC, or Asset-Backed Crypto is a new type of asset that represents digital rights to ownership backed by real-world assets such as US Treasury bonds, cash equivalents or income producing real-estate. What allocates ABC to another type of assets is a combination of three major features.
ABC assets fully comply with regulations, enabling easy conversion into cash, and vice versa, via Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures. These procedures are widely adopted in the majority of financial infrastructures worldwide.Â
Following these standards is mandatory for exercising due diligence in the banking, finance, and crypto sectors to ensure secure transactions. Also, these processes are often uncomplicated and fully automated in most instances.
Utilising the blockchain and smart contracts, ABC minimises involvement of third-parties and administrative work creating a thin management layer. ABC assets offer transparent and reliable information for all participants, protecting investors.
Income producing real estate in Miami
Miami is a crypto hub where cryptocurrency payments for real estate, as well as discounts for buyers who pay with cryptocurrency, are fairly commonplace. This creates great opportunities for investors and real estate professionals, who are interested in exploring the potential of blockchain technology and maximising returns.
In 2022, Miami experienced 34% growth in residential purchases from foreign buyers in dollar volume, with investments totaling over $6.8 billion. As Miami is a business- and crypto-friendly environment that embraces new technologies, we expect these figures to grow.
dEquity’s Primary Focus on Miami Real Estate
Miami's unique location, favourable market conditions, climate, and status as a popular tourist destination make it an excellent haven for real estate investment. However, traditional investing in real estate is exclusive, and comes with a whole bunch of limitations. dEquity resolves these limitations and opens up Miami real estate market access through a one-click solution – the dEquity decentralised app which is currently available as an MVP on the Web platform.
Purchasing of Property Tokens
Utilising dEquity platform, users are able to buy Property Tokens, so that users receive a certificate of purchase and automatically conclude an agreement with a management company in that particular building/apartment.
The management company assumes all maintenance responsibilities for a monthly fee, which, depending on the size of the property, is $150-$200 per property. Any surplus above $200 would be subject to a governance proposal.
How The Yield is Generated
Comprising rental fees and annual property appreciation, projected yield is the sum of expected income, derived from rent, and property appreciation based on market value increases. This calculation combines the anticipated rental returns with the expected rise in unit value, providing a comprehensive measure of the potential returns from an investment.
The yield is generated by income-producing real estate assets and consists of three main parts:
Annual property market appreciation
The median prices for single-family homes in Miami-Dade County saw a year-over-year increase of 9.4% and have consistently risen for an 11-year streak, setting a record. This surge in prices underscores Miami's high market demand, bolstered by its global popularity as a tourist destination.
Contract renewal and annual increase of price
In Miami, real estate is usually rented for long durations, often on a one-year contract. One common rental term includes an annual contract renewal for a price adjustment, typically involving a 10% increase.
Rental fees
dEquity's platform is centred on the use of income-producing real estate to maximise returns on investments. Besides market appreciation, platform users earn yield generated by rental fees.
Rental fees distribution is described on the picture below:
dEquity users can achieve an average of 13-14% returns in US Dollars on their investments. This not only allows for hedging against inflation but also for capital accumulation and effective portfolio management — all accessible globally with just a few clicks.
Summarising the ABCs idea
ABC is a new type of asset that is transforming the world of traditional finance, making it more compliant, secure, and transparent. It eliminates information asymmetry, ensuring fairness for all participants.
The primary goal is to protect all parties involved, with a special emphasis on protecting investors. Considering the imperfections of the real world, ABC aims to mitigate potential downsides and enhance established corporate practices in managing financial structures.
At dEquity, our mission is to streamline and simplify the global investing process by providing access to income-producing assets within a few clicks.