Applications on the Blockchain (Part 5)

If you’ve checked our first part to this workshop series ‘Blockchain & Art Entertainment (What’s the Metaverse & NFTs?)’, you likely learned that the transfer of assets between various users is largely trafficked due to its profit system of virtual mechanisms at which cryptocurrencies are held as the main facility of control. Generally speaking, as these assets could be mapped out in their various formats through digital marketplaces or land-based graphical visualizations like you may see through Web 3.0 applications such as Upland, one particular tool strives to create a lenient format for which this level of variance with real estate could be simplified if not held to an advanced tier of high financial returns.

This application goes by the name Propy, and is built as an interface that provides greater flexibility for users who have an ambition in pursuing real estate in a private sector held under a decentralized environment. The particular model of this instance is similar to that of purchasing property with the help of a mortgage broker, though instead you are doing the equivalent of creating a portfolio in the same sense by purchasing or sharing similar assets under the Propy application. A key feature of the application which may work both domestically or internationally, is that it entices exploration of opportunities in financing personal real estate beyond where you may be living, helping to exceed the control to the user than the average brokerage and housing services mentioned from before.

As investing into such an aspect of the financial markets with promising returns in the long-run could be tedious at times, this particular application solely relies on secure transactions based on a private token called PRO, which serves as a benefactor for permission that a user must call for when looking to make a transaction while holding their own governance over a particular node within the system. Referring to our article about how Audius serves to be a platform for music listeners and artists to freely share their work online without major restrictions, Propy like Audius, helps in making use of tokens to create the same permutable adjustments in data transfers that does not necessarily have to be narrowed down to one way of financing an asset.

Now, you are likely wondering how such a transaction could potentially work within an application that promises a diverse way of investing into real estate. To simply put, when mapping the relationship between the buyer and the seller, either party must agree to sign a smart contract at which the person selling has specifically established an LLC based from the US, in order to ensure that property from the buyer can be inspected with the full verification that the user providing it owns it within that time period. This is particularly guaranteed in such instances where you are holding an NFT auction, which is almost always the case when seeking a profitable transaction within the network. In addition to this, similar to what was discussed before in articles emphasizing on the use of blockchain wallets how they’re helping to build financial portfolios can provide great resource accessibility for the user (read ‘How to Invest Using a Blockchain Wallet’), the Propy token(s) can also serve as an airdrop at which they are promised to be earned freely under the conditions that a user must follow particular activities that will likely grant them permission to receive and make use of them. This works separately from how a government would choose to use the application, as Propy tokens are divided between tasking the user in earning the small supply of tokens when joining the platform, visiting a particular property as a form of inspection, and either listing or sharing the listing of property. Governments in the other hand, may simply earn a return in tokens under the regulation that they perform enough successful transactions themselves, as the proven security of Propy is established on behalf of their policies such as creating an LLC.

In addition to the process of the transaction itself, like an average Web 3.0 website showcasing the available market for NFTs, Propy has its own marketplace called the Network Growth Pool. Through NGP, with the supply of 100 million tokens under Propy’s currency, around 45% of the total (or 35 million of them) are distributed for sharing within this marketplace to serve as a platform for users to allocate their earnings into property offerings. As the history of all of the terms I’ve mentioned thus far in this article require some form of registration through the network itself with the help of tokens, Propy makes use of the Propy Registry protocol which serves as a ledger at which the transfer of recorded properties by different users are provided a legal status at which they can be verified, not only confirming the validity of transactions but also ensuring that the traffic of them are sustained efficiently. As a side note, when it comes to blockchain technology, a ledger is simply just a log (either physical or digital) that records the ongoing transactions associated with any part of a financial system that takes place within or in parallel to it.

As I’ve mentioned before, with every application, there may still come to be flaws in security at which transparency may not necessarily be practiced in the decentralized real estate community especially under this branch. This may include transaction records not being validated due to coding defects, at which the major solution involves repeating the transaction until the parties set in place may correctly use LLCs to confirm the buying and selling of their property, in order to help it remain visible on the ledger. Second to this, a major shield to other security flaws which could include an intruder attempting to alter or manipulate shared instances of transactions by users without their rightful confirmation which has been proved as explained in our series ‘Cybersecurity Vulnerabilities in Blockchain Technology: The Erebus Attack’, Propy makes it so that you must make a specific entrance with permission in order to participate in the legal buying and selling of the showcased properties. How this is done is that the user themselves pay a fee for the reservation of a particular listing, hence giving them a number of tokens in return, at which outside of the network a qualified broker is notified and requests that the seller confirms their receipt of the particular deposit that was made. A great aspect of this feature, is that it also includes a fair combination of by -laws, similar to the kind of regulation we’ve seen with issued governmental policies such as the FATF (Financial Action Task Force), the buyer and the seller within the transaction must be obligated to look over and fit under the rules of certain policies such as the Know Your Customer (KYC) and Anti-Money Laundering (AML) documentations to verify that the procedure of the transaction is completed.

If you have made it this far into the article, you’ve likely noticed that the combination between regulatory management combatting irregular activities within financial markets which is seen in our normal economy, is now merging with a fully decentralized world. Regarding this overlap of systems, it is simply a sign that full control to the user over their own desires in portfolio investments, is given a safeguard similar to the crypto architecture of other applications we’ve covered in past workshops. Though patterns of usability with portfolio management in connection to Propy amongst other clients is becoming ever more consistent as developers seek to break the boundaries of this technology, it would be nothing short in saying that we are not omniscient in the disadvantages that come with these platforms.

On top of the possible security flaws we’ve mentioned before, Propy doesn’t entirely encapsulate the transactions of property between buying and selling parties through the mechanism of non-fungible tokens themselves, since they work under a different set of given rules by the developers. To be frank, there are more costs with the process behind verifying real estate with Propy than there is with NFT auctions, as you are having to establish a limited liability company (LLC) that has far greater expenses especially on the behalf of the US government, since they include include an increase in having to administrate efforts and costs of assessed portfolios within the system, where limitations may ensue due to how a decentralized transfer of data between two or more parties in a transaction isn’t ultimately possible when fully legal establishments are not set in place. This is largely due to the fact that governments and organizations are only just in the process of establishing an avenue for this to take place, with the second aspect being that Propy itself does not have its own private and secure transaction system so that tokens do not have to be purchased directly from a third-party source instead of directly from the source. Returning back to the notion of how merging digital systems are still ongoing in their developments when trying to align with real-world policies, the World Intellectual Property Organization (WIPO) formed the equivalent of the FATF with the Blockchain Task Force, at which under the rules of their member state the CWS (Committee on WIPO Standards), a specific law is to be registered at which IPs must be outlined within blockchain technologies to be facilitated within an ecosystem that practices various challenges that must be overcome such as governance over what is being bought and sold between responsible authority, the ability for advanced computing systems to make use of and exchange information at a substituted level, to altogether create a manner at which discourse or turmoil in security is combatted and limited within private and public sectors.

As the discussion and implementation of these rules by WIPO and Propy is being developed to reach an end goal, there still remains to be competition that branches from these tools which may promise to further adjust how future businesses are communicating with each other regardless of the industry they’re connected with. These include Web 3.0 clients such as ShelterZoom or StreetWire, that try to fully digitalize the intertwining between workforces within a business by making use of blockchain-based software through grounding of the SaaS (Software As A Service) protocol, which is used to divert the nodes of a network into a particular software that may make use of them (please check out our workshop ‘Blockchain and Identity Protection’ for further context). Altogether, it is safe to say that the development in structure for the users control is more or less becoming abundant in sectors that were once only known to be centralized, at which our transition from Web 2.0 to Web 3.0 will only become more fluent in its efficacy as a result.