Home Equity on the Blockchain? It's here, and it's an NFT
Plus, NFTs are about to take over the Queen City
We’ve all heard a lot about NFTs, mostly in the context of art, music, and graphic design.
But NFTs can be much more than that, and the bourgeoning development around them has led to some innovate takes. For example—what about an NFT for home equity?
The folks behind Vesta Equity say—believe it. The company recently launched on the Algorand blockchain with the singular mission of disrupting home finance. They hope to connect homeowners and investors through decentralization, help people unlock the value in their homes, and change the game about what it means to have a mortgage.
JT and I welcomed Michael Carpentier of Vesta Equity to our Twitter Space (The Crypto Connection, Monday nights at 8PM EST), and he was gracious enough to follow up with me afterwards. Read on for the mission of Vesta Equity in Michael’s own words:
Q. How does Vesta Equity change the home equity game for consumers?
Michael Carpentier: Breaking down the barriers of affordability and shifting the paradigm from a culture of debt to one of wealth creation will create boundless opportunities for consumers. We want to place the power of a bank into the palm of the consumer’s hand.
Q. Vesta's FAQ says investors can purchase as little as 0.1% of a property. On a $150,000 home (for example) that would be $150. How is the company able to offer space for such a small investment?
Carpentier: We wanted to create a platform for the small investor all the way up the scale to institutional level participants. The only way to do that was to break it down to a level where the vast majority can participate. We’ve since updated that minimal increment to 0.01%, so an economic unit of $15 of a $150K investment pool creates a modest and affordable point of entry. Also, given the certainty of the transactional fee structure of our blockchain partner (see below) and our underlying legal structure this becomes affordable value proposition.
Q. Tokenized real estate is an emerging space for investors. Where do you see it going in five years?
Carpentier: We see it growing significantly. Direct access to real estate investing has traditionally been wrought with complexities, sweat equity, and/or a lot of intermediaries packaging and bundling real estate investments with little to no transparency. Once you remove friction and create an open view of deals then you shift the paradigm dramatically. Creating a more equitable ecosystem for investors and broader base of participation. It really is capitalism personified and executed in its true spirit. Everyone having equal access to opportunity and genuine unencumbered access to hard earned equity. In the US alone there is approximately $23.6 trillion in underlying value in residential properties and opening that up will create significant opportunity.
4. Vesta Equity chose to work with Algorand over other blockchains. Why?
Carpentier: A key benefit of using Algorand over other blockchains for NFTs is that Algorand is mathematically proven to be immune to forks, which means the blockchain will never split into multiple networks. Multiple chains are problematic because they can result in duplicate versions of an NFT, meaning that the original asset is no longer unique and its value will diminish. Companies interested in securing and maintaining the long-term value of their NFT should always pick a secure, forkless blockchain.
In addition, the Algorand network provides instant finality; NFTs sold on Algorand have guaranteed finality within four seconds. That’s much different than Ethereum, where it can take hours for a transaction to settle, essentially leaving everyone guessing about who owns the asset for a period of time. This may not seem like a massive concern now, but as activity on marketplaces like OpenSea hit new records and more people and organizations buy into NFTs at higher prices, people are going to want instant, undeniable certainty as to who owns an asset.
Finally, in terms of end users having a good transaction and trading experience with NFTs, fees are important. Fees on Algorand are as low as $0.001 per transaction, compared to $15 or even higher on other networks, like Ethereum. That’s a big difference for buyers in the NFT market.
Q: Tell me a little about your background. What attracted you to crypto and blockchain technology?
Carpentier: I am a senior level executive with over 25+ years’ experience focused mostly on all things digital. I have an insatiable curiosity for innovation. When Satoshi’s white paper and the resulting cryptocurrencies started their first steps out of the primordial ooze of a promised new financial ecosystem, I was hooked. However, not on the hype of quick wealth the speculative nature that crypto was promising. I was excited about how this new technology and approach could be applied in specific use cases to bring about real change and opportunity. It is simultaneously revolutionary and evolutionary. The whole team at the company shares this sentiment and we want this to be part of the DNA of our corporate culture.
If you’re not doing anything this weekend and you’re in the Cincinnati area, check out UNFIT, an immersive NFT gallery on February 25th and 26th at Sample Space at The Banks. It’s presented by NFTxCincinnati, a group of collectors, artists, and enthusiasts. The gallery will feature NFT digital works from artists around the world, panel discussions from industry experts, and educational resources to help those who are unfamiliar with the process and medium.
Yours truly (me) will be moderating one of the panels, and I’m pretty excited about it. I believed NFTs present huge opportunities for creatives, and that the space will really mature in the next decade.
But like any emerging tech, education is key. Help desks will be available for those new to the space, and panelists will discuss the importance of this medium. Attendees can learn about and view works from popular collections such as “Bored Ape Yacht Club”, “Gutter Cat Gang” and more.
"This is bigger than a new fad," says one of UNFIT’s co-curators, "This Exhibition will establish Cincinnati as a leader in the region on NFT experiences, education, and artwork. NFTs are a way for artists to build desire and benefit from their sales long into the future. With UNFIT, NFTxCincinnati aims to help people become comfortable with the ins and outs of crypto and digital art. We want to make it so my grandma has NFTs."
UNFIT will also display NFTs available for purchase. Local and regional artists such as Dylan Graves, Annie Burke, Andrew VanSickle, and more will have work for sale. Thee even will also allow collectors to showcase their collections in person, including work collected by Mr. Pink, Brandon Vazquez, and more. UNFIT will also present works from BuffMonster, Damien Hirst, Dalek, Ian Murray, Shepard Fairy, and others.
See you there? You know you want to come…
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People have asked what “I’m in” right now given the uncertainty in the world, and I want to be transparent. I am only buying $BTC right now, and in small amounts. I am still invested in $ALGO, but I just hold Algorand itself and Yieldly, which I receive as part of a staking pool. I converted all my other ASAs back to Algorand earlier this month. As for $GALA, I pulled that position last night and converted it to $BTC. I still believe that the GALA project is going places, but I am unsure the market sees its value. Should that change, I’ll get back in. I have one major NFT and I have decided to hold that for the time being. Lastly, I yanked my $SHIB position this morning and converted it to $DAI, a stable coin that earns 2% APY. While I’ve had fun with $SHIB, I am no longer comfortable with the speculation of that investment. These moves might strike some as fearful, but right now I feel it is best to have a much more conservative investment stance. This is what is right for me in terms of risk tolerance. Your position might be different, and that’s okay. We all have different calculations.
The Crypto Connection is for entertainment purposes only and is not meant to be financial advice. Please do your own research before investing in any asset class. Sara Celi is not a financial advisor, and holds several cryptocurrencies. To purchase her books on Amazon, please click here.