|Creation Date||Q1 2018|
|Block Time / Transaction Fee||–|
|Current Value (Total)||$ 22,146,819|
The Propy Platform – What does Propy do?
Propy is aiming to be a real estate listing platform, as well as aiming to be used as a title registry for properties, with their ultimate aim being to be used as the blockchain platform for the national land registries for jurisdictions around the world. They describe their platform as a ‘Global Property Store with Decentralized Title Registry’. This sounds like an impressive idea in theory, and if it were to take off and Propy were to be accepted by Governments, the value of the token and the blockchain could rise enormously. However, there are several key potential issues with the viability of this model.
Propy as a Real Estate Listing Platform:
Propy already have a working platform, accessible via their website https://propy.com/ which lists properties for sale, and has already had a transaction completed on their blockchain, which is a great sign that there is support behind the platform and that people are willing to place their trust in the Propy blockchain. The first transaction on the Propy blockchain was done in February 2018 for the sale of a property in Vermont, USA. They also have a downloadable smartphone App.
Propy already have a good number of properties listed for sale on their site, so far in San Francisco, Dubai, Beijing and New York, listed in US$. Buyers can pay in Bitcoin, Ethereum or US$ Dollars. Propy claim to be the first such listing site built on the Ethereum blockchain, but, there is already huge competition out there – Rightmove, Zoopla, Trulia, Zillow, and many other such established sites offer a much wider choice of properties for sale or rent worldwide. Propy would have to rely on having enough buyers wanting to pay in crypto and maybe willing to compromise on the property they buy, due to less choice, in order to be able to pay directly in Bitcoin or Ethereum.
Propy offers the option to buy a property in another continent, without the need to physically going there. When you buy a property via Propy, this is what happens:
- You are asked to provide KYC documents, such as ID scans, utility bills, bank records, etc.
- Propy platform prepares a digital deed contract. This is where the Propy tokens come into place: They are used to cover the costs of preparing this contract and overall expenses. Think of them as the commission you pay to a real estate agent.
- After completing the necessary checks, the offer is sent to the landlord. If he/she accepts the offer, the payment is being sent to him/her. The landlord can receive the payment in crypto-currency or Fiat currency, according to the conditions of the listing.
- The ownership is transferred to the new owner on Propy. The Propy team will help the new owner to get his/her deed – but this deed is only recorded on the Propy blockchain, not by any other legal means.
However, this still doesn’t protect the buyer from any risks of buying property unseen, especially abroad, and buying a property which is only recorded on the Propy blockchain offers the buyer no legal protection.
Propy as a title registry blockchain:
There are some real potential advantages from all property sales and indeed every national land registry to be recorded on the blockchain, and indeed several countries around the world are already working on this. For example, parts of Africa, in countries where there has been no land registry to date, are creating new land registries from scratch and adding all deeds for land ownership to their chosen blockchain. Other national Governments are working on creating their own blockchains on which to add land and title deeds and records of all property transactions. Property sales and land registry on the blockchain is clearly the future- currently property sales are hopelessly slow, needlessly expensive, and are frequently subject to mistakes made by solicitors or unintentional or deliberate lies or omissions made by vendors regarding information relating to the sale. Property sales on the blockchain would immensely speed up transactions and avoid the need for repeated searches, and expensive legal fees.
Propy are aiming for jurisdictions to adopt Propy as the blockchain used for their national land registries. A large part of their business model relies on this. They’re reserved 35% of tokens for payments to Governments to help enable this. However, this may not be legal, using tokens to give in this way to Governments may be seen as bribery. And what happens, if that does work, or when they run out of tokens to give to Governments? Whilst it would be great to have one worldwide blockchain on which all property deeds and transactions were recorded, enabling fast, cheaper and more transparent sales and changes to property deeds worldwide, this goal is heavily dependent on the cooperation and acceptance of national Governments. At present, most legal systems are a long way off from accepting properties sold and registered on the Propy blockchain – if one were to buy a property and only have the purchase registered on the Propy blockchain, and not through the relevant legal channels and land registry in question, it is highly unlikely that the transaction would stand up in court, and poses a great risk to the buyer, as no country, yet, would legally recognise the purchase.
The problem is, until Propy were to be adopted by governments around the world, there is no legal protection for buying property that is only recorded on the Propy blockchain.
For any property purchases recorded on the Propy blockchain, there is no legal need for the seller to change the deeds to the buyer on the national government land registry where that property is based. This means that any transactions on property would have no value legally- the purchases would not stand up in court as the Propy blockchain is not registered by national law in any country. Several countries are looking at using blockchain to record property ownership and sales, and to put land registry on the blockchain, but these countries would be creating their own blockchains or working with their chosen partners- just because they would use the blockchain does not mean they would accept any transactions recorded on an alternative privately owned blockchain, Propy. The only way Propy could work, from a legal perspective protecting any buyers using the platform, is if they integrate with national land registries to legally submit changes to property deeds on any sales completed on their platform.
Anyone can buy a property abroad right now, however, in order to get the deeds legally transferred into the buyer’s name, you need to physically apply to that country’s Deed Office or use a letter of attorney and assign a proxy. Legally, this is the only way of transferring the ownership of a property. Laws do not recognize “smart contracts” or protect rights of assets purchased by them, as yet.
So, how does Propy solves this problem? How can someone get a deed after transferring the money over Propy without going to that country and/or assigning a legal proxy? In short, how they are transferring the legal ownership? Unfortunately, Propy does not answer this question. It could be that the Propy team could act as a legal proxy to sign the necessary documents for you, but the legal specifics of this haven’t been made clear. We hope the system works like this, because otherwise, you just sent a very large amount of money to a stranger hoping to have secured a property,and legally, if the seller doesn’t act honorably, there is nothing you can do.
Propy would only really take off if a country were to adopt Propy as their national blockchain for sales and recording of real estate- as then it would be necessary to use Propy for every transaction. But this would be dependent upon a government adopting this.
What does the Propy token do? Are there any benefits to holding the PRO token?
The function of the PRO token is to cover the fees of the service provided by Propy, such as the cost of covering transaction costs and preparing sales contracts, for properties sold via Propy. In this regard, Propy acts exactly like a real estate agent. It handles the payment and instead of getting a commission from the sale price, it covers the expenses and makes money via the PRO tokens earned from the proceeds of dealing with the sale.
Propy token holders don’t receive any rewards or dividends, and unless you want to buy a property using Propy, there are no benefits to holding Propy tokens other than market speculation that they may go up in value.
A large part of the value of the PRO token would be dependent on Propy being adopted by a national jurisdiction, which would most likely cause the value to rise as the demand for the tokens would increase, as then the tokens would be needed for all property transactions. However, there are no signs of this happening yet.
|Can Be Traded In||Huobi, Bittrex, Liqui, Upbit, Fork Delta, Live Coin|
|Can It Be Used in Real World?||Not outside of the Propy Blockchain|
Propy is led by real estate developers: Natalia Karayaneva is a real estate investor with 17 years experience in Bulgaria. She is still the owner of MP Group, which specializes in real estate development. However, she has no previous experience in blockchain technologies. The developer team has accounts on Reddit, Telegram, Twitter, and Facebook.