FAQ

Tokenisation is the process of converting the value of real estate or other (tangible) Real World Assets (RWAs) into digital tokens on the blockchain. This allows for fractional ownership, making RWAs and impact investments more accessible and liquid.

REClosure via Propto provides an end-to-end platform for property / RWAs tokenisation. Our services include:
– Due Diligence
– Legal Structuring
– Token Issuance
– Fee Apportionment & Dividend Payments
– A comprehensive management suite for Governance
We strive to ensure strict compliance with regulatory requirements.

REClosure’s platform Propto is designed to accommodate a wide range of entities interested in tokenising real estate assets and RWAs. This includes:

– Social housing providers

– Real estate developers

– Investment funds

– Asset management companies

– Special Purpose Vehicles (SPVs)

– Impact Investments Bonds

The DSIP is a blockchain protocol specifically designed for real estate tokenisation.

– Built on the ERC-20 standard

– DSIP includes features essential for real-world property investment

– Limited Total Supply

– Whitelisting Mechanism

– Clawback Provision

– Ability to Freese Account

– Fees in Stablecoin

– Fee Distribution

– Rent Payment Functionality

Tokenised real estate through Propto offers several key benefits:

– Accessibility: Lower entry barriers allow you to invest in fractions of income-producing properties

– Diversification: Easily expand your portfolio across different properties and markets

– Liquidity: Buy and sell shares/tokens more efficiently than traditional fixed Asset Classes

– Transparency: Blockchain technology provides a secure and transparent transaction record

– Reduced Costs: Streamlined processes can lower transaction costs

– Global Reach: Invest in properties worldwide without complex cross-border hurdles

REClosure ensures that its platform Propto prioritises compliance with laws, regulations and best practices.
INTERNAL – We prioritise our compliance by working closely with internal and external legal and regulatory and compliance advisors, together with regulatory groups and bodies to ensure that we aim to adhere to best practices.
EXTERNAL CLIENTS – In addition, we work closely with our clients and seek confirmations that their investment prospectuses adhere to relevant laws.
CUSTODY – Custody of assets is provided by regulated entities safeguarding users Assets.

A token represents a fractional ownership interest in a RWA, for example a real estate asset or a share held within a Special Purpose Vehicle (SPV). This gives you a proportionate share of rental income and potential sale proceeds. Under Irish law, tokens representing real estate ownership are likely considered security tokens.

Security tokens offer stronger investor protections:

– Regulation: Oversight by EU regulators

– Legal Rights: Clear ownership rights and claims to assets

– Transparency: Detailed disclosures about the investment and its risks

– Potential Liquidity: May be traded on regulated exchanges (subject to compliance).

MiCA aligns with our commitment to transparency and compliance. We will ensure that any entities that we partner with adapt to meet MiCA standards, prioritise investor protection, obtain necessary licenses, and reinforce our security measures and have appropriate trasnsition plans in place.

An SPV is essential for:

– Risk Management: Isolates the asset from the parent company’s liabilities

– Regulatory Compliance: Meets specific investment and securities regulations

– Clear Ownership: Simplifies the investment structure and distribution of income

– Investor Protection: Limits investor risks to the specific property within the SPV

– Flexibility: Offers flexibility for financing and potential sale of the property.

Propto is strongly committed to upholding Anti-Money Laundering (AML) regulations. We implement strict compliance measures during both user and property onboarding, including KYC verification, risk assessment, continuous monitoring, documentation checks, legal due diligence, and source-of-funds verification.

DSIP, the Digital Security Income Protocol is the Smart Contract that powers our Platform, Propto, it revolutionises real estate investment with:

– Limited Token Supply

– Whitelisting and Clawback

– Fee Structure: Predictable transaction costs

– Rent Payment Functionality: Automated income distribution

– Automated Fee apportionment

PROPTO offers multiple benefits:

– Dividend & Fee payments

– Transaction Facilitation: Versatile medium of exchange within the platform

– Discounts and Incentives: Enhances value for token holders

– Governance and Community: Participation in decision-making

– Staking and Liquidity: Potential for rewards

We offer two primary onboarding methods:
– Tokenisation of Shares: Property held in an SPV, shares are tokenised
– Emission of a Bond: SPV issues a bond, which is then tokenised

Property owners partner with Propto by:

– Providing necessary documentation

– Participating in SPV formation

– Agreeing to the terms of token creation and issuance

– Actively engaging in the onboarding process

– Collaborating on marketing and sales strategies

– Onboarding service users, Estate Agents, Asset Managers & Facility Managers for Governance

Investors are required to:

– Complete AML/CFT and KYC onboarding

– Purchase tokens through the platform

– Receive dividends based on their ownership stake

– Have the option to engage in secondary market trading (subject to compliance)

Yes, Propto facilitates access to secondary markets for token trading, ensuring compliance with KYC and AML regulations. We provide the necessary infrastructure, support, and guidance for a seamless trading experience.

This can be peer-to-peer trading or via secondary exchanges that meet relevant licensing/all laws.

DSIP’s smart contracts automate the distribution of rental income directly to token holders based on their ownership stakes.

A predefined process involving token holder notification and voting ensures transparent decision-making and fair distribution of sale proceeds.

Investors begin by completing our onboarding process, including AML/CFT and KYC checks. Once approved, they can purchase tokens through the platform, Propto.

Assets are managed through the SPV. Propto has created a Governance suite that allows the vendor, Asset Manager, or Facilities manager to communicate with shareholders through the Propto Platform to provide oversight of regular maintenance and operational activities.

The Propto Decentralised Exchange (DEX) is a key part of our ecosystem, enabling secure and transparent trading of DSIP tokens. It uses smart contracts on the blockchain to automate trades without the need for traditional intermediaries. Here’s how it works and the benefits it offers:

– Order Book Market: Propto’s DEX uses an order-book model, where buyers and sellers list their desired prices and quantities. This provides full market transparency, allowing traders to see all available orders and choose their counterparties.

– Self-Custody and Custodial Wallets: Users have the flexibility to choose between self-custody wallets (where they retain full control of their funds) and custodial wallets (where assets are held by a trusted third party for simplified management). This balance of control and convenience caters to different investor preferences.

– 24/7 Trading: The DEX operates around the clock, giving investors global access and the ability to trade anytime.

– Reduced Fees: The blockchain-based model eliminates many overhead costs associated with traditional exchanges, potentially lowering users’ trading fees.

– Transparency and Security: All transactions on the DEX are recorded on the blockchain, ensuring an immutable record that promotes trust and accountability.

A platform for fractionation and trading of commercial real estate. Property owners can list a portion of their assets, which are then tokenized and made available for purchase by investors. The entire process is streamlined, secure, and compliant with the necessary regulations.

Examples of practical applications of the DSIP protocol in real estate projects include:

Social Housing Project:

The DSIP protocol facilitates the fractionalisation and tokenisation of social housing projects, allowing investors to purchase portions of these properties. A specific application involves a €100 million social housing project available for investment. By tokenising a percentage of the project, for example, 20%, REClosure creates 20,000 DSIP tokens, each representing an equal share of the investment. This model not only democratises access to real estate investment but also supports social welfare by channelling funds into housing projects that benefit communities. Investors receive dividends from rental income, distributed directly to their bank accounts in fiat, enhancing the liquidity and attractiveness of the investment.

High-Value Shopping Centre:

Another practical application is the tokenisation of a high-value shopping centre with a valuation of €500 million. Suppose the owner decides to liquidate a 20% stake in the property. REClosure can tokenise this stake by creating a corresponding number of DSIP tokens, which are then offered to investors. This process allows for a broader participation in the investment, provides the shopping center with liquidity, and offers investors a share in the rental income generated by the property. The DSIP protocol ensures that dividends are efficiently distributed to token holders, contributing to a stable and passive income stream.

What future applications does REClosure envision for DSIP?

Real-Estate-Backed Loans:

REClosure foresees the DSIP protocol enabling the issuance of real-estate-backed loans. Investors can use their DSIP tokens as collateral to secure loans issued in stablecoins, combining the stability of real estate investment with the flexibility and efficiency of digital currencies. This application will make real estate investments more liquid and fungible, allowing investors to leverage their assets without selling them, thereby enhancing the financial flexibility of token holders.

Decentralised Mortgages:

Another innovative application is the development of decentralised mortgages. Through the DSIP protocol, investors can fund specific properties and receive monthly payments, similar to traditional mortgage structures, but with the transparency, security, and efficiency of blockchain technology. The mortgage conditions, including payment schedules, interest rates, and asset liquidation processes, are encoded in smart contracts. This system not only simplifies the mortgage process but also opens up new opportunities for direct investment in real estate properties, offering a transparent and equitable platform for both investors and homebuyers.

A platform for fractionation and trading of commercial real estate. Property owners can list a portion of their assets, which are then tokenized and made available for purchase by investors. The entire process is streamlined, secure, and compliant with the necessary regulations.

A platform for fractionation and trading of commercial real estate. Property owners can list a portion of their assets, which are then tokenized and made available for purchase by investors. The entire process is streamlined, secure, and compliant with the necessary regulations.