AUSTRALIA, 22 February 2024
$1.8B USD of tokenised Rent Rolls are coming to the Redbelly Network in 2024.
The Australian residential real estate market has been valued at over $10T, but in the past few decades little progress has been made applying technology to the core legal contracts that underpin this massive asset class. Real estate trust transactions from property sales, and rental property portfolio management have remained largely paper based, stuck in real estate agency filing cabinets and providing a ripe opportunity for technology-driven disruption.
Hutly, founded by Jeremy Hastings in 2017, has a mission to transact real estate as a digital asset. This revolutionises the way in which real estate data and transactions leverage technology, increasing efficiency, providing a single source of truth and transparency over the rich data that these contracts contain, and helping to protect all parties against fraud, theft and data loss. Hastings is clear on the massive opportunity facing the market:
‘Hutly’s mission is to help everyone have a safe, stable and certain home. That means enabling property to be traded as a digital asset, where all parties’ personal and business data can be safely stored and used to reduce the cost and risk of high value transactions. It’s a win-win for everyone involved.’
When it comes to rental management portfolios known as ‘rent rolls’ the opportunity to apply Compliant Asset Tokenisation to rental authority contracts is significant. As a tradeable asset class worth billions of dollars in Australia alone, rent roll portfolio valuations and liquidity depend heavily on the accuracy and validity of the information within the individual contracts.
'Real estate contracts are little nuggets of gold’ says Hastings. ‘They contain 73 data points and form the basis of the value of the rent roll books. It’s time for them to come out of the filing cabinet and into the digital world.’
Hutly’s initial research into distributed ledger technology led them to try Ethereum’s blockchain as a solution, but the limitations of the platform for this use case soon became an issue.
'The bigger problem with Ethereum and other blockchains is that in real estate you have to know the party you’re doing business with, they have to be known for everyone to comply with regulations. On top of this we just can’t operate in a cost effective way with large fluctuations in gas prices.’ says Hastings.
Redbelly Network provides Hutly with solutions to all these problems, with accountability at the core via its innovative Zero-Knowledge-Proof enabled identity layer, and the finality, security, speed and composability that Hutly needed to build a more fit-for-purpose solution. Added to this, Hastings says that Redbelly’s fixed gas fees give Hutly a predictable cost base to use in their expansion plans.
‘We chose Redbelly to tokenise more than US$1.8B of rent rolls because everyone on the network is a fully verified, trusted party, there’s no transaction losses, and that’s what we need to remain compliant. Legally and in terms of the value of the transactions, it’s a better solution for us. We needed a blockchain that was fast and cost effective, and Redbelly ticks those boxes. Tokenisation on Redbelly enables these rent rolls to be traded as real world assets in real time.’
As the partnership grows, Hastings says he has been delighted with the experience of working with the Redbelly team.
My experience of the Redbelly team has been fantastic, not only do they have a really impressive brains trust, they’ve found ways to solve real world problems with blockchain technology that nobody else has.’
And rent rolls are just the first step. Hutly processes over 1 million real estate agreements each year across sales, rental and commercial. This equates to over A$18 billion of rental value in executed contracts every year. The Redbelly and Hutly partnership is focused on converting this volume to moving money via Hutly Pay, the automation of trust accounting to protect all parties’ interests against theft and fraud, solving one of the biggest problems in the real estate industry.
Redbelly’s Founder and CTO Vincent Gramoli believes that Hutly has perfect use cases for the technology he and the team have built.
Compliant Asset Tokenisation of asset classes like these is exactly what we’ve built Redbelly Network to help our customers achieve. We’re pushing the boundaries of the global real-world asset tokenisation category and bringing billions of dollars of TVL to the market.’