Non-Fungible Tokens (NFTs)

Homebase security tokens are also non-fungible tokens, or NFTs. That means that there will be a finite number of tokens issued per home, which will stay constant and represent fractional ownership of the property. Each token represents partial ownership of a property by an individual, is unique, carries detailed information about the property, and, in the future, can be staked as collateral to take on loans with 3rd party loan providers.

The Security Token Offering is constructed using Metaplex's NFT standard for Solana. A Metaplex Candy Machine is configured alongside several Candy Guards (rules for the offering/mint). The following Guards are used to comply with securities regulation:

  • Allow List: a whitelist that will comprise of addresses belonging to eligible users. Eligible users are determined by the security offering taking place. For example, in a Reg. D offering, all KYCd, American accredited investors will be added to the allow list. No one outside of the allow list can partake in the offering.

  • Mint Limit: a limit on the number of NFTs (shares of a home) that an eligible user can purchase

  • Token Freezing: tokens can be frozen and thawed by the freeze authority (Homebase). This is important when conducting STOs via Reg. D offering as tokens cannot be transferred for 1 year following mint.

  • Token Burn: tokens can be "burned" by Homebase. This is done by nullifying the status of the token in the token's metadata. This will be used in the event that a user's account is compromised or cryptographic keys are lost. The stolen/lost tokens can be "burned" (nullified) and replacement tokens can be issued to the user's new wallet.

Home Metadata

Following Metaplex's Token Standard, every token has its own metadata URI. That URI links the token to an off-chain JSON resource containing the token's metadata. Home data is encoded into the metadata of its respective token. The decision to store metadata off-chain as opposed to on-chain was made for the following reasons:

  • Cost efficiency: The cost to store data on-chain is significantly higher than off-chain storage.

  • Updating: In the event that home data changes (i.e. a new bedroom is added to the home), it is a trivial task to have the off-chain metadata file updated. This change would be reflected in all associated tokens.

Long-term, we plan on migrating the majority of home metadata on-chain as storage costs come down.

Ownership Rights

The tokens themselves represent fractional ownership in the SPV holding the property. That means, if person A trades their home tokens to person B, ownership rights automatically get transferred between both parties at the time of the trade as long as person B is also KYC’d on the Homebase platform. This dramatically cuts down the time and friction required to buy and sell ownership stakes in real estate as opposed to selling through traditional channels.

Photo of the Property

Every home that is fractionalized via NFTs on our platform will have corresponding artwork that represents the property. This is by design. Homeownership is very personal for people, and ownership tokens should be too. The pride that a homeowner feels from showcasing their home to their friends is something that we want to recreate for investors with our home NFTs. The NFTs will be a visual representation of the property they represent, which owners can view directly in their wallet. In the future, we will create 3d maps that will highlight where each investment property is located within a city to further cement that feeling of pride.

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