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(Kitco News) - Real estate has often been identified as a sector ripe for the integration of blockchain technology. Now Quarter Inc., the first owner-occupied fractional equity home funding program and technology platform in the U.S., is looking to establish itself as a leader in the field with the launch of tokenized home equity via the TOKO asset tokenization engine.
TOKO is a digital asset-creation platform operating on the Hedera network that utilizes distributed ledger technology (DLT) to provide transparency and disseminate market information.
According to a press release shared with Kitco Crypto, Quarter purchased a pilot home for $740,000 in Longmont, Colorado, which was financed with third-party investors directly supplying 97% of the purchase capital as alternative financing to mortgage credit.
“This investment capital was minted into the Quarter Asset token - a smart contract representing proportional ownership of the home and rights to a monthly fee,” the release said. “The Quarter HPI token will represent future appreciation of the home.”
Quarter’s ultimate goal is to help facilitate homeownership for millions of individuals who cannot afford a home using traditional debt-based capital.
HPI is the first-ever fractional investment token, Quarter Homes said. The token enables investors to tokenize their real-estate equity, while buyers will be allowed to acquire partial ownership of real estate – “a move that is set to democratize homeownership for millions of American citizens.”
“The Quarter tokenization project is exciting and one of our favorites as it represents tradable investment securities backed by the largest, and most stable, asset class on earth – owner-occupied homes,” said Scott Thiel, the founder of TOKO. “Investors will have the option to buy, trade, and sell tiny, passive positions of homes on the Quarter network as an alternative to active, whole home investment.”
The recent passage of the Markets in Crypto-Assets bill in the EU, which established a comprehensive regulatory framework for the bloc, is a clear sign that the world is slowly progressing towards the integration of blockchain technology into the global financial system, of which real estate is one of the largest sectors.
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| Citi says tokenized securities could hit $5 trillion, over 4x today's total crypto market, by 2030 |
“Our ambitious vision is to make trading Quarter Asset and HPI security tokens as simple as it is today for global investors to buy and sell tiny shares of IBM, Coca-Cola, or Exxon on the New York Stock Exchange,” said Shannon Diesch, CEO of Quarter. “This will serve to democratize the supply of housing capital to retail and institutional investors everywhere and provide more affordable options vs. mortgage for consumers who are priced out of homes today all over the world.”
Diesch noted that she had the equity of her home minted into digital tokens via TOKO and was able to save 50% vs. mortgage in monthly payments by getting direct investments to make the purchase. “These security tokens offer my investors a way to trade, or exit into cash, my home’s rising equity when we launch our future secondary marketplace and grow its liquidity,” she said.
TOKO elected to host its protocol on the Hedera network due to its low-cost, scalable nature that is capable of providing the throughput required for a globally active DLT platform.
“By leveraging the Hedera network for tokenizing home equity assets, participants can tap into a secure, scalable, and governance-focused ecosystem that enables efficient ownership transfer, enhanced liquidity, and heightened trust,” said Christian Hasker, Chief Marketing Officer at Swirlds Labs. “Hedera's strengths in security, scalability, governance, regulatory compliance, and interoperability make it the ideal platform to unlock the full potential of tokenized home equity assets in the digital age, and we congratulate Quarter and TOKO on this milestone.”
