At 1 pm on June 8th, 2021, TechCrunch Founder Michael Arrington listed his Kyiv Apartment for sale through Propy, marking what will hopefully be the world’s first NFT Real Estate Sale. Arrington is using Propy’s protocol for the transfer of full ownership rights with each trade of the NFT. Despite taking place in Eastern Europe, This framework is based on US legislation and thus will hopefully lead to promoting real estate NFTs amongst US-based real estate firms at scale. While this headline is still a first, this is not Arrington’s first time processing a real estate transaction on the blockchain. In fact, Arrington purchased his Ukraine apartment back in 2017 with Ethereum, also through Propy. A few years later, Propy will be taking the helm on auctioning the same property, but this time as a real estate-backed NFT. Though it will probably spark a bidding war, the starting price is only 8 ETH or just under $20,000 USD as of today.
One of the many interesting aspects of this potential sale has to do with an analogy that has been made in the space frequently over the past few months. Comparing NFTs or Smart Contracts to the deed of a house. This project takes this a step further by actually finding a way to officially and legally mint this property as an NFT. According to Propy:
“In the current legal environment, title deeds cannot be directly represented by a token, but legal entities can. The apartment is owned by a Delaware Limited Liability Company (LLC). The LLC is ‘tokenized into’ a specific NFT and made available for purchase.”
So now that it’s live, how will this bidding process work? Now that the seller has signed the proprietary legal paperwork for the NFTs, the bidding has officially begun and bidders’ names are being aggregated by Propy. According to their site, once the final bid is accepted, the transaction should be able to be processed and accepted “within a minute.” This extremely quick timeframe alone should be attractive to many used to typical lengthy wait times within the real estate space. This will hopefully act as a new prime example and real-world use case for how NFTs can go so far beyond simply a buzzword, but that smart-contract technology, in the form of NFTs, really can be used to tokenize or certify anything. What other financial process can transact even $20,000 USD within one minute? Unless you are very friendly with a private banker, most traditional institutions would make processing a transaction of this size intentionally difficult in order to dissuade customers from withdrawing sizable portions of funds.
However, Michael Arrington seems to be of the mindset that no matter how large the purchase, doing so through a blockchain, and furthermore an NFT, is a clear evolution of the process. Not only is the transaction completed within a minute, but you have a virtual unfalsifiable certificate that you effectively can’t physically lose. To Arlington, from the outside, this seems extremely logical. And many leading voices within the space agree. According to Investor Tim Draper: “I am excited about how NFTs in the virtual world are going to be applied to real estate in the physical world. I suspect that people will soon be able to buy a building, buy the air rights and buy the virtual rights of any physical space. The future is awesome.” (I absolutely agree).
On top of the home itself, the sale will come along with An NFT Art Piece hanging on a wall as well as a printed cyberpunk picture as unlockable content. Furthermore, of course, the sale will also come along with access to ownership-specific transferred paperwork, the apartment picture, and a unique NFT by a popular Kyiv graffiti artist, Chizz. There is also a physical painting of the digital artwork which is painted on a wall of the apartment.
Interested in seeing this for yourself? Check out the project landing page here, and if you feel the urge to be a part of history, the bidding is still quite low considering!