KEY POINTS

  • Real-estate tokenization has a huge future: TerraMint co-founder
  • First property in Tennessee will go live for $1.2 million next week
  • More properties like an Airbnb to list in coming weeks

Real-estate tokenization startup TerraMint is all set to make live its first token offering for real estate investors on its platform next week. Co-founder and COO Chris Gerardi confirmed that the property will be a ranch in Tennessee, which will go live for $1.2 million. 

"So, the first token offering is going to be a ranch in Tennessee, and we're going to set it to go live and it'll be set up for four months. People will be able to go on and start purchasing tokens in that property," Gerardi said in an exclusive interview with International Business Times.  

The buyer needs to have a minimum of $500 to purchase the property token, he said. 

The next one will be an Airbnb property in downtown Dallas that will be listed in the next four weeks, and then two weeks later, a property in Aspen would go live, Gerardi revealed.

As of now, the properties that will be available for tokenization will be in U.S. The company has plans to expand globally in the future.

Real-estate tokenization is the process of creating a virtual token representing the ownership of a real-estate asset. This is similar to NFTs except that a real-estate token is tied to an underlying physical asset.

Similar to traditional real-estate investing, the value of the token fluctuates based on the performance of the asset. However, the ease of transfer using blockchain gives it an edge over the traditional real-estate investing. Tokenization of real-estate also makes property search easier for investors as they are listed on one centralized marketplace. 

To purchase the tokens, one needs to create an account on the platform and complete their KYC and AML verification process, and then connect their wallet to the platform. 

"And you can basically transfer that money and purchase through Dai stable coin. Or you can purchase with fiat USD by putting in your bank account and then you click how many tokens you want, and then that's executed for you," Gerardi said.

TerraMint recently launched a Defi real-estate platform for both buyers and sellers. If a seller wants to list their property on the platform, it can be done for a flat fee. 

"Its flat fee is $10,000 for us to basically create smart contracts for tokenization. All the legal work. And then we charge anywhere from one and a half percent to two and a half percent of the total capital raise. That's a one time fee," he said. 

There are two markets on the platform. First, there's a primary market, where the initial capital raise happens. When a property is listed on the platform it will go live for a certain amount of time. 

“Then when it raises the minimum capital requirements, to say a million dollars. Once it raises a million dollars, then it goes to the secondary market. When it goes to the secondary market, you can sell your tokens, other people can buy your tokens," Gerardi explained.

Real-estate tokenization is at an initial stage in the crypto world and not many firms have started dealing in it. Gerardi believes that this space has a "huge" future. The company plans to expand to list properties like amusement parks, yachts, private jets and so on in the near future.

ChrisGerardi-2 TerraMint co-founder and COO Chris Gerardi. Photo: Chris Gerardi