Introducing Zyfty (zyfty.io) — An industry transforming approach to integrating NFTs with real estate

Over the past nine months, the Zyfty team has been solving the complex problems associated with making the widespread adoption of real estate NFTs a reality. Starting in June, the Zyfty approach to buying and selling real estate NFTs will be available to anyone with a wallet and crypto currency.

Real Estate and NFTs — A Challenging Prospect

The traditional process for buying and selling real estate has evolved over hundreds of years and is generally bureaucratic and cumbersome. The main difficulties arise from the way a title is recorded, held and updated by local government entities throughout the country. If a title is traditionally recorded and also represented as a token on a blockchain, the enforceability of ownership of the title would only be possible if many different local authorities agreed to recognize the token. Although this may be the best way to record titles in the future, the co-ordination and mass adoption of such a system is years, if not decades away. Additionally, there are many regulations, both locally and nationally, that complicate the transfer of titles. All of this hinders the speed and liquidity benefits that can be offered via tokenization of property ownership.

The Zyfty Solution

Zyfty leverages the legal and regulatory framework that is already accepted and in place nationally, while separating property “ownership” from the title.

Simply put, Zyfty acquires a property, becomes the title holder of record and then creates a long-term lease contract that is represented by an NFT. The beneficiary, or owner, of the lease is determined by whoever is the owner of the NFT. The long-term lease offers the NFT owner the key benefits of outright property ownership while also maintaining the ability to freely transfer the tokenized lease on any token compatible marketplace or with a peer-to-peer transaction via the sale of the NFT.

The Zyfty process allows the lease that is represented by the NFT to trade as if it were the actual title of the home. The NFT owner is free to do whatever a traditional title holder may do, but with the increased benefits of the NFT being tradeable via a blockchain ecosystem. The lease is constructed such that the NFT owner may improve the property, sell the property, rent the property, etc., just as they could in a traditional real estate transaction. Representing the property as an NFT, however, provides many other opportunities that are limited only by the imagination and the products currently offered in the DeFi marketplace.

Zyfty NFT Benefits

Privacy: Title records in the US are almost universally accessible to the public online, allowing anyone to quickly and easily find a title holder’s physical address. Zyfty real estate NFTs allow buyers to enjoy the benefits of having a third-party title holder and first lessee, which ensures their privacy without having to setup and manage a shell corporation or an offshore trust.

Speed: Tokenization allows properties to transfer almost instantaneously, without requiring intermediaries. Greatly reduced transaction times help reduce selling costs, from around 5.25% for traditional real estate to as little as 0.5% for a Zyfty NFT sale.

Liquidity: Zyfty provides transparent, complete market listings minimizing the time for due diligence. This not only provides liquidity realized from fast transactions, but also increases other opportunities from exposure to the DeFi marketplace. The Zyfty NFT and related sales contract is designed to support the DeFi products and services now being created and introduced at a rapid rate. These products and services provide NFT owners with a diverse array of opportunities (mortgage type loans, fractionalization, collateralized debt, HELOC, other).

Pay Recurring Home Costs though Wallet: Zyfty facilitates the seamless payment of all fees associated with the NFT via the owner’s wallet (property taxes, HOA fees, other municipal fees and any leverage instruments obtained through the DeFi marketplace).

Upside: While Zyfty NFT’s represent long term leases, our research indicates that long term leases trade at the same value as regular title transfer real estate sales for the majority of the lease duration, holding all else equal. All of these benefits create NFT real estate assets that are superior to the status quo and produce the opportunity for Zyfty NFTs to trade at a value higher than non-tokenized real estate assets. Further, an NFT owner, at any time, can elect to redeem their NFT with Zyfty and obtain the title of the home in their name.

Marketplace: Fee structures of existing NFT marketplaces levy a significant cost on selling an NFT. Zyfty will open its marketplace platform in July, specifically designed for real estate NFT sales and marketing. . On the Zyfty Marketplace, NFT creation and transaction fees will be as low as 0.5% of the price of the NFT or home acquired, depending on the type and level of service.

Zyfty Status

Starting in June 2022, Zyfty will offer NFT services for acquiring condominium/attached homes in California, Texas and Florida. Those services include the following.

NFT an existing home identified by a buyer who would like to purchase it as an NFT.

1. Buyer identifies a home they would like to purchase as a Zyfty NFT.

2. Buyer performs a KYC/AML check (records kept only by Zyfty).

3. Buyer enters into an agreement with Zyfty to purchase the home as an NFT at a specific price.

4. Zyfty acquires the home and creates a corresponding Zyfty NFT.

5. Buyer purchases the NFT directly from Zyfty using their wallet and an agreed upon crypto currency.

NFT an existing home.

1. Homeowner contacts Zyfty to create a Zyfty NFT of a home they own.

2. Zyfty creates an NFT of the home for a fee.

3. Buyer (formerly the homeowner) accepts the NFT with their wallet

4. Buyer may sell the NFT on the Zyfty or any token compatible marketplace or in a direct peer-to-peer transaction.

The Zyfty team’s involvement in the real estate industry over many years includes relationships with real estate brokerages nationally. We work with brokerages in acquiring properties and finding NFT buyers when necessary.

Zyfty Token Base

In order to give the NFT owner all of the opportunities expected of an NFT (DeFi, speed), Zyfty created a new token base that will serve as a standard for not only real estate, but also for other hard assets represented by NFTs. The token base operates on Ethereum and is expanding to platforms and ecosystems that have EVM capability.

Zyfty’s Founders and Vision

Zyfty was founded by real estate and Web3 professionals who have a vision of bringing real estate to the blockchain ecosystem and making NFT property ownership available to all buyers. This is a huge, transformative endeavor that not only affects the traditional real estate marketplace, but also can be a catalyst to the already rapidly expanding DeFi universe.

Upcoming Topics

This article is a high level overview of the Zyfty approach to brining NFTs to residential real estate. There will be a series of upcoming articles, some of which will go into greater technical and process detail.

For more information, you may contact us by email, Twitter and the website.

Email: info@zyfty.io

Twitter: @Zyfty_io

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