Blockchain startup Propy will oversee a Kiev apartment NFT auction next month. The non-fungible token is being listed with a $20,000 starting price, and bidding begins 8th June 2021.
The buyer receives access to property ownership paperwork, and a digital artwork NFT by Ukrainian graffiti star Chizz. The real life piece is also painted on a wall inside the apartment. TechCrunch founder, Michael Arrington, is the current owner.
“This NFT will go down in history. For Propy it is a major milestone in leveraging the promise of blockchain technology and non-fungible tokens (NFT) to achieve ‘self-driving’ real estate transactions and real estate participation in the decentralised finance economy,” Natalia Karayaneva, CEO of Propy, told TechCrunch.
A usage case for smart contracts
NFTs have smart contracts at their core, and these are widely seen as one of the technology’s biggest selling points. The agreements are locked into the blockchain, and cannot be adjusted without consent.
Propy’s Kiev apartment NFT auction creates a strong usage case for these digitised deals. In this instance, Arrington has signed legal papers for NFT ownership to be transferred to an unknown buyer through Propy, which handles payment.
Once funds are received, the company releases the non-fungible, transferring rights to the apartment. The process is expected to take one minute, a huge reduction on standard property sales. But perhaps what’s most impressive is the way this smart contract will then automatically repeat each time the NFT is resold. Full details of the auction can be found on Propy’s website.
The first Kiev apartment NFT auction?
Propy’s NFT apartment auction is a bold move for Ukrainian real estate, and something the city has never seen before. But this is not the world’s first NFT house sale.
As reported in Decrypt, a home in Kransberg, Germany was placed on the OpenSea marketplace in April 2021. Bidding opened at $74,000, and the buyer gained access to token content allowing organisation of a ‘real world’ sale.
Meanwhile, around the same time US graphic designer Kii Arens created another NFT linked to a physical house. The property in Thousand Oaks, California, was rendered in bright colours for a 45-second video clip, which was sold as an NFT. But, as per Dezeen‘s coverge, the buyer also received the brick and mortar building itself.
NFTs and real estate
Propy’s Kiev apartment NFT auction may not be the first of its kind, but this is another significant moment for non-fungible tokens. As Arrington told TechCrunch, it’s all about decentralised finance (DeFi).
“Right now, if I have a real piece of real estate, there is no way for me to borrow against it, without a middleman, because I have to go through a bank and get a mortgage or whatever. And it’s also the friction, all of the costs in terms of speed and how long it takes,” he said. “If we can find a way to plug real estate and other real-world assets into DeFi, I think that the amount of credit that can be created around that is in the trillions, eventually.”
The news comes at a time when NFTs and real world real estate have been reaching new heights. Earlier this week it was reported that New York’s tallest skyscraper, 111 West 57th Street, would be a blockchain network tower and house the world’s largest NFT museum.