Blockchain makes deeper inroads into real estate as Roofstock announces its first NFT home sale

Roofstock, the online single-family home investment platform, announced last week that it completed the sale of one of its homes via a non-fungible token through its subsidiary Roofstock onChain. The Columbia, South Carolina, home sold for $175,000 to local real estate investor Adam Slipakoff.

As one of the first NFT-based home sales for the US, the purchase took several players in the blockchain landscape to complete.

To begin with, the home is titled under a limited company whose ownership is linked to Home onChain, an NFT on the Ethereum blockchain. The transaction took place on the Origin Protocol market using stablecoin USDC from Circle, which was converted from US dollars using Wyre. Funding was facilitated via Teller Protocol, a fintech platform that maintains the decentralized funding lending pool USDC Homes (which is not connected to the similarly named USDC, mentioned above). The buyer used a “multi-sig” wallet on Origin, requiring two parties to sign the transaction before the funds were released.

“The smart contract on the market that we use instantly made the switch,” said Matthew Liu, co-founder of Origin Protocol. “NFT appears in this new multi-sig wallet and the USDC that the buyer paid was split [to different parties]. It all happened at the same time in a chain transaction.”

The transfer of funds was simultaneously sent to the seller, minus Origin’s standard fee of .5%, and Roofstock onChain’s fee of 2.5%. Before the transaction, USDC Homes required a guarantee fee and transactions on most blockchain platforms, including Ethereum, come with what is known as a “gas fee” to pay for the cost of using the platform.

“The dream on our part is that at some point in the future, this technology could drive a user experience that looks pretty similar to what Roofstock’s existing business looks like,” Liu said, referring to how Roofstock’s investment process is entirely online. “Many of the difficult parts of the blockchain – fiat on ramps to crypto, the actual smart contracts, the sale of these devices, etcetera – are being simplified so that traditional home buyers and sellers don’t have to fully understand this technology. This lays the early groundwork for all of us as a collaborative industry to eventually disrupt traditional real estate. It might take five years, 10 years. But that’s what we’re most excited about.”

Before the transaction could take place, the buyer had to have their identity verified in a traditional “offline” way, so they could have a whitelisted wallet on Origin.

Liu envisions a future where these NFTs can be sold to multiple parties, saying, “Because NFTs are interoperable and they can be transacted easily, in theory they can also be fractionated. So you can turn one home into many small homes. It creates better market efficiency, price discovery, liquidity and also access to more people.”

There are other players in the blockchain space when it comes to buying and selling physical properties. Real estate startup Propy has completed several sales, most recently in Gulfport, Florida and has more on the way. Another $4 million home under construction in Utah is slated for an NFT sale later this year.