The last idea to get people to actually buy NFTs: Throw in a house

Like the rest of the cryptosphere, NFTs have had a tumultuous year. Back in January, the world’s largest NFT trading platform by volume, OpenSea, saw a record monthly sales volume of around $5 billion. But by September, it was only trading about $329 million worth of digital assets per month, a drop that led to deep layoffs. Even the Jimmy Fallon-loved leverage monsters that are Bored Ape Yacht Club (BAYC) tokens saw their price floors drop to a fraction of their former value.

All that is to say that the NFT market has reached a tipping point, and for good reason. The get-rich-quick promise of digital assets has lost its luster against the backdrop of the broader crypto industry crash, which appears to have revealed how little tangible, lasting value these assets actually have without the mega-hype that once fueled them.

Still, NFTs aren’t quite dead yet. And to keep them alive, a growing number of web3 operators are turning to a more familiar market: residential.

Importantly, the NFT manufacturers in question are not just selling expensive JPEGs from digital homes. Rather, these new ventures showcase real estate and offer potential investors the opportunity to purchase those properties using NFTs. Thus, the digital tokens are not exactly assets, more like mules. Or paperwork. Or both, as the digital tokens are allegedly embedded in all inspections and deeds and the rest of the home buying paper trail.

Essentially, advocates say, it’s the click-add-to-cart ification of home buying. And on the NFT producer side, it is intertwining blockchain assets – which post-crash are of more dubious value than ever – with real estate, a much more tangible investment.

“When [the investor makes] the purchase decision, then it becomes so easy,” Sanjay Raghavan, head of web3 Initiatives at Roofstock onChain, the web3 subsidiary of web2’s real estate rental investment platform Roofstock, told Futurism.One click transaction.”

Earlier this month, Roofstock announced its first sale: a “rent-ready” single-family home in South Carolina, which went to a seasoned real estate investor for a cool $175,000 worth of the popular stablecoin USDC. But this was not the first sale of its kind. Back in February, a similar startup called Propy similarly auctioned a home in Florida via NFT for $653,000 Ether.

“The only bureaucratic process we had was during the auction,” said Propy founder and CEO Natalia Karayaneva Fortune at the time of the sale, citing the same alleged ease, efficiency and reduced institutional involvement that Roofstock promises its own clients, “was a five-minute process of going through the KYC verification where the bidders had to provide their name and ID and connect to their wallet their.”

Interestingly, both of these sales relied on first transferring home ownership to an LLC; the homeowner LLC is actually what is provided under the NFT exchange.

At first glance, it is admittedly tempting to cut out steps on the way to buying a home. Buying a house is a long, drawn-out process, and a lot of money ends up going to the process itself, not just the value of the house. That said, that process is long and complicated for a reason, and seasoned real estate investors like those that Roofstock markets to are people who probably already know how to navigate that process pretty well.

And to that point, not all experts are entirely convinced that this development is really all that necessary.

“I find this particular line of development fascinatingly irrelevant to the real problems we face today: maybe we can house the homeless in the Metaverse while we’re at it?” Michael Every, a global strategist at Rabobank, told Futurism. “It seems to be the direction of the unicorn!”

Cyber ​​security is certainly a concern here as well. After all, if your home is embedded in an NFT, someone could theoretically just hack you and steal it; Roofstock, for its part, assured Futurism that it has digital security measures against hackers, while the inclusion of the LLC allows for the addition of an off-blockchain paper trail for proof of ownership. (Of course, everyone in blockchain says that, and they keep getting hacked.)

Of course, it could be argued that neither Roofstock nor Propy are really NFT creators, at least not in the traditional sense. Sure, the startups are using the symbols, but there is no value—and therefore, they say, no cost—embedded in them. The asset is the house alone. But in that way, we have see a home seller incorporate NFTs into a home sale.

“It’s not just a $7 million house, but I mean, you’ve bought virtual real estate,” Jorge Guinovart, the real estate developer and crypto enthusiast behind a project called Reflection Manor, told Futurism last month. Guinovart, eager to combine the real-life houses he builds with the cryptoverse, listed Reflection Manor—a real-life $7.7 million mansion in Miami—with a few digital pot sweeteners: a stylish virtual home in the still-uneven-in . -beta “metaverse” of Alpha City, plus an NFT copy of the house.

And is either that “country” or that NFT worth anything? No. But according to Guinovart, they may be one day.

“Two to three years from now, when the alpha is fully open,” he continued, “you have virtual real estate that could be worth a million, two million dollars as well.”

A few days after Roofstock announced its first sale, a real estate investment company in the Bahamas announced a similar blockchain venture: turning a 60-acre portion of Fyre Fest island into a “100 percent tokenized” luxury resort community for the crypto elite. Like Roofstock, the venture claims that every single one of the 60 multimillion-dollar properties to be built on the island will be sold by buying on an NFT.

Which again can be attractive to some – especially those who want quick and easy access to offshore bank accounts. But according to Every, it looks more like “a good way to launder money” and “exchange useless crypto and NFTs for the real assets they are supposed to replace.”

Everyone has a serious point. While most of these properties are sold in good faith – to experienced landlords with enough crypto in their digital wallets to fill their blockchain shopping cart with as many houses as they can – there is still plenty of room for abuse.

Regardless, this trend is likely to continue, as it almost certainly confirms one thing: that NFTs cannot live on hype alone. And to that point, while Roofstock and Propy have found a new use for them, NFTs were not created to be payment platforms. They were made to be assets, and their apparent demotion to a blockchain point of sale or even just currently worthless pot-sweeteners is not a great look for an industry trying to build an increasingly digital version of the future – especially when the assets that these NFTs are used to trade with are completely real.

More about blockchain houses: Developers are turning Fyre Fest island into an exclusive colony for crypto millionaires, of course they are