🔎How does it work?
ReNVEST DAO integrates cutting-edge blockchain technology with robust business, financial, and legal processes to create a secure and efficient real estate investment platform.
Step 1: Invest
Kickstart your real estate journey with ReNVEST DAO by investing as little as €50. Our user-friendly platform allows you to browse and select from a diverse portfolio of prime European properties. Each investment is converted into digital tokens, simplifying the process and making it accessible to everyone.
Step 2: Ownership
Upon investing, you receive a digital token using the ERC-20 protocol, representing your share in the property. Built on the Polygon network with the ERC-1155 standard, this token signifies your ownership and entitles you to your proportional share of rental income (see the other details, terms and conditions regarding rental income distribution below) and any capital appreciation.
Step 3: Earn
Watch your investment work for you as you receive monthly rental rewards directly to your wallet. Your returns are directly proportional to your investment, ensuring a consistent and transparent income stream. Please see the other details, terms and conditions regarding rental income distribution below.
Step 4: Participate
Join a community of co-owners in managing the property. From deciding on rental agreements, maintenance, and repairs to handling taxes, utilities, and neighborhood relations, your voice and vote matter. This collaborative approach ensures your property is well-managed and optimized for returns.
Step 5: Liquidity
Need to sell? Our platform offers easy liquidity by allowing you to trade your tokens directly within permissionless DeFi liquidity pools without the hassle of finding a buyer. This ensures that you can liquidate your investment swiftly and efficiently.
Tokenization Processes
Let's delve deep into the mechanism behind the real estate tokenization with ReNVEST
Pre-Tokenization Phase
The pre-tokenization phase involves several critical steps to prepare a real estate asset for the tokenization process. This phase ensures that the asset is appropriately vetted, valued and compliant with regulatory standards, setting the foundation for a successful tokenization process.
Asset Identification and Due Diligence:
Property Selection: ReNVEST DAO identifies high-potential real estate assets with strong appreciation and rental income prospects.
Due Diligence: Conduct a thorough due diligence process to verify the property's legal status, ownership, and any existing liens or encumbrances. This step ensures the asset’s legitimacy and market readiness.
Market Research: Ongoing identification of lucrative real estate markets within the EU. This involves analyzing economic indicators, property trends and market demands to identify high-potential investment opportunities.
Valuation:
Professional Appraisal: Engage professional appraisers to determine the market value of the property accurately. This valuation process considers current market and property condition and comparable sales data.
Financial Assessment: Conduct a detailed financial assessment to estimate potential rental income, operating costs and ROI. This assessment helps us in setting a realistic token price.
Legal and Regulatory Compliance:
Regulatory Approval: Secure necessary permits, approvals and exemptions (as necessary, required and possible) from regulatory bodies, adhering to regulatory standards and maintaining transparency in all transactions. Ensure that all operations comply with local property and securities laws.
Legal Structuring: Legally structure the property to facilitate tokenization.
Partnerships & Community:
Collaborations: Establish partnerships with local real estate agencies and property managers to enhance market penetration and streamline property acquisition and management processes.
Community building: Engaging potential investors and fostering a robust DAO governance structure. This involves regular communication, voting mechanisms for key decisions and creating an inclusive community culture.
Property verification: Establish strategic partnerships with local lawyers and/or notaries to enhance security and investor protection, which streamlines property transfers and update the deed title annually to ensure that each tokenholder's right to a hypothec or co-ownership is secured (where the investor gains this right based on his allocation of at least 10% in the underlying real estate asset). Lawyer/notaries will also verify the property to confirm that it exists at the indicated address and in the presented condition in line with the gallery and 3D-tour of each property card.
Tokenization Phase
The tokenization phase involves the creation and issuance of digital tokens representing fractional ownership of the real estate asset. ReNVEST DAO leverages advanced blockchain technology to create these tokens. RNV are minted on the Polygon network, chosen for its scalability and efficiency. The entire process is underpinned by smart contracts, which ensure secure and transparent token issuance, transfer and governance.
Smart Contract Deployment:
Blockchain Selection: Utilise the Polygon network for its scalability and efficiency. Deploy smart contracts to automate the issuance, transfer and governance of tokens.
Token Creation: Mint digital tokens representing fractional ownership of the property. These STOs are ERC-20 tokens and represent a specific percentage of ownership in the asset but not a specific area of the underlying property. Thus, a percentage of the homogenous asset is allocated to each tokenholder proportional to his investment in that specific listed real estate asset (see the other details, terms and conditions regarding rental income distribution below). The STOs are digital representation in the form of contractual relationships against the DAO entity that becomes the legal owner, which consequently distributes the fair share to each tokenholder and registers him as co-owner or a legal hypothec right is created in his name or a security property right is written in the investor's name, as possible and available under the national law of the property's location.
Token Offering:
Initial Token Sale: Offer tokens to investors through various stages, including private sales, public auctions and ICOs. This phased approach helps build investor confidence and ensures broad participation.
Investor Onboarding: Implement a KYC process to ensure compliance with AML regulations. Once verified, investors can purchase tokens using fiat currency or cryptocurrencies.
Governance and Compliance:
DAO Integration: Integrate the tokenized asset into the ReNVEST DAO governance framework. Token holders can participate in decision-making processes related to the asset.
Compliance Monitoring: Continuously monitor to ensure all token transactions comply with regulatory standards. Smart contracts enforce compliance and automate processes such as dividend distribution.
Property Rights: Ensuring clear and enforceable property rights for token holders. This includes registering ownership with local land registries and ensuring that token holders' rights are protected.
Post-Tokenization Phase
The post-tokenization phase involves managing the tokenized asset, ensuring investor returns, and facilitating liquidity. This phase focuses on maintaining asset performance and providing ongoing value to token holders.
Asset Management & Aquisition:
Property Management: Partner with professional property management firms to oversee day-to-day operations, maintenance and tenant relations. Ensure the property remains in optimal condition and generates steady rental income.
Performance Monitoring: Regularly assess performance to track rental income, occupancy rates and overall asset health. Provide periodic reports to investors on the property’s performance.
Ownership and Rental Income: NFT holders become co-owners of the property and receive proportional rental income (see the other details, terms and conditions regarding rental income distribution below).
Reinvestment: Utilizing profits to acquire new properties and enhance platform capabilities. This reinvestment strategy ensures continuous growth and the ability to offer more diverse investment opportunities.
Income Distribution:
Rental Income: Distribute rental income generated by the property to token holders based on their property STOs as long as they hold at least 10% of the tokenized property in the shape of STOs. This distribution is facilitated through smart contracts and blockchain technology, ensuring transparency and efficiency. These rental rewards will be sent to the greenlighted (pre-approved) wallet address(es) of each investor in the form of RNVD tokens after the equivalent conversion is carried out at market price (conversion rate: day of receipt +/- 48 hours). Thus, one participant needs to hold at least 10% in a tokenized property at sub-DAO level to enjoy the right to directly proportional rental reward distribution. Otherwise, the supra-DAO may retain those proceeds for investors with less than a 10% stake in that tokenized property. Such proceeds may be used to buy back RNVD from the open market to be burnt or permanently locked in a smart contract with destroyed private keys in order to create buying pressure and scarcity with regards to RNVD. However, the supra-DAO may still decide to distribute rewards from time to time to those initial STO tokenholders who are not qualified to receive directly proportional rental rewards in line with a fixed and announced schedule. The non-qualified STO tokenholders (with less than 10% in each sub-DAO representing the tokenized property in question) would still enjoy the capital appreciation and every other right prescribed to them in this Whitepaper.
Dividends: Distribute any additional income, such as profits from property appreciation or sales, to token holders as dividends.
Liquidity and Trading:
Secondary Market Trading: Enable tokens to be traded on secondary markets, providing liquidity to investors. Support trading on centralized and decentralized exchanges (CEXs and DEXs). Partnerships with regulated MTFs (e.g., Archax or NPEX from the Netherlands) under MiFID II in the EU will also add an additional stream of enhanced liquidity.
DeFi Integration: Allow token holders to leverage their DeFi platforms to use their tokens as collateral for loans, participate in liquidity pools, or earn additional yields.
Governance Participation:
Voting Rights: Grant token holders voting rights on key decisions related to the property, such as major renovations, refinancing, or selling the asset. This participatory model ensures that investor interests are aligned with asset management. Thus, every STO holds the function and characteristic of an utility governance token at property level, or the so-called Level-2 DAO (sub-DAO/property-level DAO). To participate in decision-making at supra-DAO level, one must hold RNVD tokens that may purchased from the ReNVEST DAO's administrative entity or from the secondary open market via CEXs, DEXs, liquidity pools, or P2P (OTC). The RNVD tokens allow any tokenholder to propose and participate in decision-making processes at supra-DAO level with regards to business decisions, such as reinvesting and allocation of profits, operations, next markets to tap into for tokenization of real-world assets (RWAs), marketing of the DAO, partnerships and collaborations, selection methodologies, including property managers, yields and structuring products for institutional investors, and more that impact the development of ReNVEST DAO as an entity on the global scene as a leading tokenization solution for RWAs.
Community Engagement: Continuously engage with the investor community through updates, forums, and events to maintain investor trust and loyalty.
Additionally, the following business processes run continuously and independently of the tokenization processes:
Marketing and Sales: Utilizing strategic marketing to attract a diverse investor base. This includes digital marketing campaigns, investor education programs and leveraging social media platforms to raise awareness.
Investment Pooling: Aggregating investments through the sale of fractional ownership tokens. This pooled capital is used to acquire prime real estate properties, ensuring diversification and risk mitigation.
Compliance Monitoring: Ongoing monitoring and adaptation to regulatory changes. This proactive approach ensures that ReNVEST DAO remains compliant with all relevant laws and regulations, mitigating legal risks.
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