Morning Minute | Real Estate Investing via NFTs
GM!
Take a minute to catch up on the latest in the Web3 space with today's NFT market analysis, top movers, and upcoming mints:
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TylerD's Market Summary
Homebase just sold the first-ever fractionalized home on Solana via NFTs. Is this the future of the $10B crowdsourced real estate investing industry?
🏠 Buy an NFT, Own A (Fraction of) House
Real estate investing is coming to DeFi and NFTs.
Homebase sold out its first tokenized property on Tuesday, a singly family home in Macallan, TX, raising $246,800 in the process.
The kicker - they did it via fractional shares with NFTs on the Solana blockchain that cost just $100 each.
We have seen homes sell on the blockchain before, but never via fractional NFT shares.
What Happened?
Some of the headlines around this one were a bit deceiving on what actually happened, but the story is still interesting and important regardless.
Homebase worked with the owner of the McAllen home to tokenize the property.
The owner held back 80%, and 20% of the equity was up for sale via the NFTs. And they sold out that 20% (actually 19% as Homebase kept 1% interest) in 2 weeks.
Here are the key numbers from the transaction:
- Home price: $235,000
- Total raised by Homebase: $246,800
- Total raised by NFT sale: $45,600
- Total investors: 38 (30 of which were non-accredited)
- Average investment: $1,200 (or 12 NFTs)
- Min investment: $500 (5 NFTs)
- NFT holder equity: 19%
A few important takeaways:
- The entire property was not sold to NFT holders - just a 20% stake
- Homebase captured a spread of $11,800 to "account for maintenance and other issues"
- Most investors were not accredited
The story would have been more interesting if the entire property had been sold, but alas, 20% is still a great start and a pilot for fractional real estate investing via NFTs.
But you might be wondering - how does this actually work? Do the NFT owners actually hold equity?
Here's How It Works
For each property that Homebase plans to tokenize, they will:
- Create an SPV (special purpose vehicle) to acquire the home
- Sell NFTs that represent ownership in the SPV
- Use the funds raised to buy the property and manage it
- Distribute rent monthly to holders
KYC is required on the Homebase site in the application process and open only to U.S. investors at the moment as Homebase tries to comply with U.S. securities regulation.
Every NFT owner is a rightful owner of their share of the property and receive monthly payments tied to their share of rent.
(Though the McAllen property NFT owners should not be expecting too much from those monthly rent checks, which I calculate as being around ~$5-$7 per month).
Why Solana?
The fact that the sale was done on Solana was interesting but makes sense when thinking about those monthly rent payments being in single digits.
Homebase apparently evaluated both Ethereum and Polygon along with Solana.
They ruled out ETH due to the high gas fees and Polygon due to the hurdle of bridging and the "friction" it would cause newer users (both very valid points).
Specifically regarding Polygon, the team stated in their decision thread that "Bridging money over is HARD and EXPENSIVE."
Frank DeGods must have missed the memo.
Read their full rationale for Solana in this thread.
Why It Matters:
According to Custom Market Insights, the global market for crowd-funded real estate is $10.8B and projected to reach $250B by 2030.
NFTs have a strong value proposition in this process, as they allow for more entry/exit options via their ability to be traded on secondary markets.
Adding the potential for instant liquidity to a previously illiquid investment process is a big deal.
Real estate on the blockchain is coming, it's just a matter of time.
Kudos to Homebase for taking this big step and proving out this new use case.
🐵 Yuga and The HV-MTL Reveal
We got the first glimpse yesterday of the HV mech types and the primary takeaway is that they will evolve over the coming months as dynamic NFTs.
The updated website has a new image visually exploring "wtf happened" to cause the HV-MTLs and how they fit into the larger Jimmy the Monkey lore, somewhat telling the back story.
The HV-MTLs apparently need to evolve into their final forms before a "cosmic battle" comes.
Here's what we know:
- Each HV is a unique, dynamic NFT that evolves based on NFT holder decisions
- There are 8 different HV-Types with countless trait combos, and each has its own skills, personality, and roles (and can/will transform over time)
- The HV-MTL Forge is where holders will build and customize a workshop that prepares the HVs for their evolution
- Better creations lead to higher ranks on the leaderboard and unlock special abilities
The EVO 1 Reveal stage is next, coming in April, so expect more information on how the game will work and how HV-MTLs will evolve coming soon.
Market response
In-line with almost every announcement in the past few weeks, the floor did fall post-reveal.
HV-MTLs sit at 2 ETH this morning, down 9% on the day (and 15% from local highs). Though they did see a 450% spike in daily trading volume yesterday.
We will soon see if there's enough demand for the HV-MTL collection and the incoming Vessels as Yuga continues to press forward on its many verticals.
🚚 What else is happening in NFTs?
Here is the list of the major headlines from the day in NFTs:
- Trading volume came in at 24k ETH on Wednesday, up 10% from Tuesday
- Beeple introduced his new work "S.2122" on Wednesday, his latest "kinetic sculpture" piece focused on climate change; it will be featured at Art Basel Hong Kong
- Magic Eden is launching its ETH marketplace beta on April 6th, marking its 4th supported blockchain
- Art Blocks launched its new secondary marketplace yesterday after the "Cargo" Curated drop, along with its new fair price Dutch auction format (everyone pays the final price), though it's up to artists to use or not
- PROOF launches PROOF Curated and its first project "Evolving Pixels" which will feature 5 generative artists and 5 AI artists and is curated by "Memories of Qilin" artist Emly Xie
- Jack Butcher switched the metadata on Opepens to "this artwork may or may not be handmade" indicating the use of AI; Opepens popped 43% on the news
- Doodles shared a new link to the Genesis Box site ahead of the March 31 opening date to generate some excitement (floor -2% at 0.11 ETH)
- End of Sartoshi holders are eligible to register for a new exclusive art drop from @pixelord
- VVD is expanding the Notable Pepes collection, adding a new companion in Potentially Notable Pepes
🌎 Around Crypto and Web3
A few other Crypto and Web3 headlines that caught my eye:
- The crypto market was up yesterday: BTC +1.3% at $28,700; ETH even at $1,810
- Aeropostale filed trademark applications for downloadable virtual good and other Web3 initiatives
- Fetch.ai secures $40M to facilitate the commercialization and deployment of AI-generated data; Fetch.ai is built on blockchain tech and has created an $FET token for use on its platform
- Influencer Irene Zhao's Web3 social platform, SO-COL, just raised $4.5 million in new funding as investors bought SO-COL's $SIMP tokens; they plan to use the funds to expand to multiple blockchains
🚀 NFT Total Volume
- Otherdeed (4,179 ETH, 1.86 ETH Floor)
- HV-MTL (2,337 ETH, 2.2 ETH)
- Nakamigos (2,212 ETH, 0.3 ETH)
- MAYC (1,770 ETH, 13.1 ETH)
- Wrapped CryptoPunks (1,397 ETH, 64.3 ETH)
📈 NFT Floor Price Increase
- Opepens (43%, 0.42 ETH Floor)
- Checks - VV Originals (17%, 0.42 ETH)
- Checks - VV Edition (14%, 0.84 ETH)
- Nakamigos (12%, 0.34 ETH)
- v1 Cryptopunks (12%, 5.6 ETH)
🗓 Upcoming NFT Mints and Reveals
Today has several drops worth looking at, bucking this week's trend.
The Mafia Animals is likely the mint of the day, a free mint from the co-founder of the CryptoNinja NFT collection. That ecosystem has seen more success than most, and free is a great price in this market - expect big demand.
Cantera is a Bright Moments collection for Jacek's upcoming Berlin mint, but with just 95 NFTs, the fear is illiquidity post-sale (see "Velum").
Then The Glimmering launches on Polygon, which is an on-chain tabletop role-playing game. The price isn't cheap at 250 MATIC ($275), so this will be a good test of the true current interest in new mints on Polygon.
- TheMafiaAnimals Soldiers (11:00 a.m. ET); free
- FRENS by Gabe Weis (11:00 a.m. ET); 0.01987 ETH
- Cantera by Jacek Markusiewicz Mint Pass (1:00 p.m. ET); Dutch auction
- The Glimmering (1:00 p.m. ET); 250 MATIC
- Escher Eclusives (TBD)
Enjoy this write-up? Follow along with me on Twitter @tyler_did_it or reach out via email tyler.warner@luckytrader.com.
For all volume and floor price data, see Lucky Trader's Project Rankings page.
For all upcoming mints, see Lucky Trader's Project Schedule page.
