In an age of streaming services, ride-hailing apps, and digital goods being assigned more value than ever, a myth arose that people no longer want to own physical assets. As we live our lives increasingly online and spend more on services, it’s clear how we spend our money has changed. As much as younger generations might appear to value doing things over having things, there's more to the story of ownership, in particular home ownership, than frivolous spending habits.
Property, home ownership, and investment appeal to all ages. Real estate has been a strong source of wealth creation over the past few decades. Yet, the cost of entry (and the associated administrative quagmire) has risen out of reach for many due to the economic climate. This is where blockchain enters the conversation, proposing that tokenization and fractional ownership could solve the accessibility and affordability problem in the housing market.
A property in Darwen, just outside of Manchester, was the first house to be tokenized in the UK. It was completed through Ctrl Alt, an alternative assets marketplace built on the Algorand blockchain. "Tokenization" means digitizing the deeds of a property and storing them on a blockchain in the form of a security token. In this case, Ctrl Alt is recording the homeownership information to Algorand's digital ledger. While it can take months to complete a traditional property sale, a transaction on Algorand can take seconds.
Employing blockchain technology and tokenizing real-world assets opens up another possibility: fractional ownership. If you don’t have enough money for the whole property, you can buy a percentage of it. Thanks to Algorand’s smart contract technology, it’s possible to divide up ownership of a digital asset – hence the term “fractional ownership”. It means anyone can invest in high-value assets at a lower entry point than ever before. Through the Ctrl Alt app users can invest in property, sustainability projects (coming soon), and other assets at a minimal cost. Like with a share in a company, your investment appreciates or depreciates with the overall value of the asset.
Fractionalization works with the help of smart contracts. When you sign a transaction (in other words, make an investment) through the Ctrl Alt app, a smart contract on the Algorand blockchain carries out the legwork in the background. The original token that represents the house is split (metaphorically), with your share percentage being represented by a new token. This token gives you legal ownership rights over your fraction of the property.
Blockchain innovation makes fractional ownership possible, accessible, and streamlined. Ctrl Alt CEO Matt Ong explained:
"Combining our expertise with groundbreaking technology, we’re offering an alternative to the traditional world of property investing, which often requires large amounts of capital to get started."
While fractionalization lowers the barrier of entry for investors to access real estate investments, it also helps to inject more liquidity into a notoriously illiquid property industry.
Fractional ownership isn't new – but access to these types of investments has remained elusive to most. Access is the issue that Ctrl Alt and Algorand are looking to solve. The Algorand blockchain brings speed, transparency, and security to property ownership. It gives companies, like Ctrl Alt, the infrastructure to tokenize high-value assets, like houses, and record data immutably on a public ledger. It can facilitate the sale of digital tokens tied to real-world assets in under 4 seconds. Algorand’s smart contract technology is positioned to be the backbone of fractional home ownership, allowing Ctrl Alt to quickly and seamlessly divide assets between an unlimited number of investors.
Real estate, particularly high-end, continues to grow in value, despite the global economic climate, proving that any big or small investment has a shot at appreciation. Tokenization appears to be an inevitable next step for the housing industry, with Algorand’s technology primed to record ownership on its immutable ledger and the Ctrl Alt app set to be a thriving marketplace for alternative asset investing. Fractional ownership could prove an excellent means of democratizing property ownership and giving all investors access to a potentially wealth-generating asset.
Ctrl Alt is currently available in the UK and will be available in the rest of Europe soon.
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