HOW PHAETON USES NFTs TO FUND ITS KEY PROJECT

In raising equity capital for Phaeton Smarter Community’s key project in Mandurah, Phaeton has created Real Estate Non-Fungible Tokens (NFTs) Marketplace. It is a blockchain marketplace where real estate developers and investors can trade NFTs. It is also a form of “crowdfunding” where sponsors and developers can mint NFT tokens of a real estate project and sell them on the marketplace.

What is an NFT?

NFT stands for non-fungible token. The opposite of an NFT is “Fungible”, where a good is exchanged for another good of the same asset class. For example, the US dollar and Bitcoin are both fungibles. Therefore, you can trade a Bitcoin for another Bitcoin, and you would still hold the same value. Non-fungible, on the other hand, describes a one-of-kind, unique good that cannot be readily exchanged for another good within the same asset class. Non-fungible tokens are also indivisible. Below is a table explaining the difference between Fungible and Non-Fungible tokens.

Phaeton Real Estate NFT Marketplace

NFTs can tokenise real estate, but they need a marketplace to trade. One of the significant problems with traditional real estate investing is illiquidity. The marketplace created by Phaeton offers a liquidity solution. Investors can trade their NFTs whenever they want.

THE PROCESS

Phaeton Real Estate NFTs are powered by Phaeton Blockchain. It is a new way to support and manage the application of NFTs, such as property ownership transfer for a property or fractions thereof. Below is an outline of an NFT process.

  1. First, there is a requirement for legal preparation for the sale of a property as an NFT or a development proposal requiring equity capital for the total development cost.
  2. The proposal is submitted to Phaeton’s Real Estate Marketplace Platform for approval by Phaeton’s investment committee.
  3. If approved, the NFTs are “minted” — that includes descriptive and legal data about the property, including paperwork, disclosures, reports, image files, and even videos. The NFT is proof of ownership. Legally, whoever has possession of the NFT, owns part of the property through an ownership vehicle.
  4. That NFT, which resides on a distributed ledger, can be placed for sale in an existing NFT marketplace.
  5. Potential buyers and investors bid or buy the minted NFTs. Successful buyers pay for the NFT in fiat or cryptocurrency via a custodian type smart contract designed to perform escrow duties.
  6. After funds are released to the seller or developer within a limited window, the NFT is transferred to a wallet controlled by the buyer entity. Finally, the buyer entity completes paperwork to finalise the legal ownership transfer.

This process opens an entirely new playing field for property investors and traders. For years platforms have been trying to tokenise real estate assets with marginal success. However, this adds a whole new level to democratising real estate. One of the critical benefits of the NFT marketplace is liquidity. NFTs can be traded on the secondary market on the same platform should a buyer require funds for personal reasons.

Smarter Communities showcase model

Phaeton Smarter Communities is developing a project in Mandurah where NFTs will be sold to raise equity. The proposed development is in a Transport Orientated Development (TOD) precinct and consists of the following accommodation.

  • A medical centre plus a NDIS (National Disability Insurance Scheme) Hub
  • A social enterprise coffee shop to train and provide work for people with disabilities.
  • 10 NDIS Accommodation apartments
  • 22 Affordable co-living apartments

This project is chosen as it embraces and integrates Phaeton’s Blockchain Applications with Phaeton ESG Infrastructure — all under one ecosystem. An amended Development Approval application is currently underway, and construction will start in the last quarter of 2022.

We introduced this project to the public two weeks ago and received significant interest from investors. If you are interested in investing or merely want to know more about our Smarter Community’s finance models, please email investor.relations@phaeton.io.

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Phaeton utlilises Blockchain Technology to create sustainable communities for future generations using our own independent Blockchain platform.

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Phaeton Technology

Phaeton Technology

Phaeton utlilises Blockchain Technology to create sustainable communities for future generations using our own independent Blockchain platform.

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