Crypto is such a tantalizing movement because it is going to impact every industry in some facet. Inherently, the first industry was finance as bitcoin aimed to be a new means of currency and payments. DeFi, decentralized finance, then evolved to replicate and innovate on many more aspects of the traditional finance ecosystem including lending (staking in crypto jargon), borrowing, trading, raising capital, investing, and so much more. Then came NFTs which have created new paradigms for art, music, sports, gaming, and the creator economy as a whole. DeFi and NFTs have enabled DAOs to change the way we think of organizations through decentralized treasuries controlled by community members who own the DAOs NFT (or token). The latest trends gaining steam now include DeSo, decentralized social media, which has seen a new layer 1 blockchain called DeSo building out its expansive ecosystem and onboarding users. DeSci, decentralized science, is establishing a more open-sourced research environment and providing new pathways to funding science that have historically been barred by antiquated gatekeepers with misaligned incentives. I would like to coin a new term that I have not yet seen DeRe, decentralized real estate, which is developing new use cases seemingly every day. A common theme for a lot of what is going on in Web3 is the democratization of communities, investment opportunities, or experiences that have historically been inaccessible to the masses due to certain financial requirements. Real estate, one of the oldest assets in history is mostly inaccessible to your average citizen because of its complexity and cost. Parcl is looking to change that by being “a digital real estate platform that lets you gain exposure to the real estate market with no minimum investment, low transaction fees, and immediate liquidity.”
Parcl is a digital real estate protocol built on Solana giving investors exposure to real estate markets that have never existed before. The barriers to real estate investing include large sums of capital, locked up liquidity, and extensive industry knowledge. Parcl addresses all of these by requiring no minimum investment, the ability to trade in and out of positions 24/7 providing constant liquidity, and a simple user interface allowing users to invest in real estate that they can understand.
Imagine owning just one square foot of a luxury condo in Miami. How about adding a few square feet in San Diego? And if you think Austin is booming, why not buy ten feet downtown to add to your coast-to-coast real estate empire? Imagine being able to do this at the click of a button!
The above image shows an example of some of the locations that Parcl has rolled out for investors on its Testnet and it will only be adding more over time. But, how does this all work? Where are these prices from?
In simple terms, Parcl pulls mountains of data from various sources to calculate an average price per square foot for a given neighborhood. Parcl does this for a growing number of neighborhoods around the country to get real-time prices that can be relied upon.
With all of this information compiled Parcl then determines the cost of a square foot in a neighborhood and creates a token that is linked to that price. For example, if you wanted to buy a digital square foot in Chelsea, New York it would cost $1834.53, at the time of this writing (so much for the COVID downfall of NYC real estate), and the price would change as the underlying asset increases or decreases.
So what are you buying? You're not buying the actual house or a square foot in it. You're buying a stake in a digital market that tracks to the actual underlying asset, and you're able to trade your stake with others interested in getting into that market.
Users can diversify their portfolios with as few or as many neighborhoods as they would like with no minimum investment required. Additionally, participants can earn profits by providing liquidity to the various trading pools allowing them to earn high returns.
Earning Profits Through Liquidity Providing
Parcl protocol is designed to share the small transaction fees directly with participants who provide the money (capital) needed to create the trading environment. These so-called 'liquidity providers' (LPs) enable the system to operate smoothly, so they get rewarded for this activity. LPs fund the trades, allowing people to buy or sell their position at any given time.
Top APR % for providing liquidity
South of Market, San Francisco: 85%
TriBeCa, New York: 81%
Williamsburg, New York: 50%
Capitol Hill, Seattle: 48%
South Beach, Miami Beach: 47%
These are great returns for participants who are willing to provide liquidity to this up-and-coming platform that is only in its Testnet phase, which started March 30th and is ending April 10th, but is already seeing impressive growth in user adoption.
How to Get Started:
Since this protocol is built on Solana you will need a Solana compatible digital wallet. We recommend using Phantom but see the full list below.
You will then need to buy USDC and swap it with whatever neighborhood token you are interested in investing in (see below).
Having tested the platform out for ourselves we applaud the Parcl team for its ease of use and functionality as it is only in its Testnet phase and will continue to improve!
Plans for a DAO?
We connected with Parcl on Twitter to see if plans for a DAO were in its immediate plans.
While there are not currently plans for a DAO it is promising that the team will be setting up a governance token that will give members a voice in the future of this innovative platform. As for what our Parcl portfolio strategy might look like, we will be stealing Packy McCormick’s, founder of Not Boring and advisor at a16z, strategy.
Long NYC, short SF seems like a good strategy to us as NYC continues to rebound from its COVID lows and the exodus from crime-ridden SF continues. Whatever your investment philosophy is we are excited that Parcl has created a new way to partake in one of the world’s oldest asset classes. Web3, and blockchain technology, at its best provides people with opportunities they never had, gives them a voice, and creates new paradigms for century-old industries. It is still early for Parcl as they finish up their Testnet phase but the community has already grown to 41 thousand Twitter followers and 25 thousand Discord members. Decentralized real estate, DeRe (you heard it here first), is here to stay and will only be expanding its use cases as web3 and blockchain adoption grows… join the movement while it is still early!
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