For those who have been keeping tabs on the recent surge of DEX volume, it’s clear that Uniswap has been playing a major role in making those volumes a reality. By combining ease of use with one of the simplest, yet extremely effective smart contracts in existence, Uniswap provides a DEX experience unlike anything we’ve seen to date.
In this article, we’ll be looking at a new Uniswap pool launched by the RealT – a platform providing fractional ownership in tokenized real estate. For those unfamiliar with security tokens, you can think of them as representing real-world assets such as properties, equity or bonds in the form of a cryptocurrency. These new assets represent ownership over the real-world asset while allowing for micro-investments, meaning that you could buy $100 of an NYC skyrise apartment. Furthermore, your ownership entitles you to revenue when the property earns income in the form of rent payments.
9943 Marlowe St
For this particular Uniswap pool, RealT is offering the ability to trade shares of 9943 Marlowe St, a residential house in the suburbs of Detroit. The property is tokenized in the form of a unique RealToken, meaning that this specific property has a unique token from other properties listed on the platform.
As it stands today, the pool is being seeded with a small sum of $5000, meaning that there is an opportunity for other investors to share in the upside of any trades that occur by adding liquidity to the pool.
What Makes This Unique?
First and foremost, the ability for tokenized real-estate to trade on a secondary exchange makes liquidation that much easier. Rather than having to work directly with RealT to find a buyer for any given share, users can quickly and easily liquidate their holdings at any given time. The great part about Uniswap is that trades are executed automatically and autonomously, meaning there is no need to wait for an order to be matched on an order book and no need to rely on a third party to execute the trade properly.
Beyond the basic primitives of DEX trading, Marlowe RealT tokens mark the first known integration of a security token on Uniswap. While the exchange has historically been used for popular DeFi utility tokens such as MKR or SNX, these tokens have whitelisted permissions, meaning that trading is currently restricted to accredited investors only. While this does add an extra barrier to those wishing to purchase shares of the property, it’s fascinating to recognize that the foundation Uniswap has created is capable of providing liquidity for security tokens – a market which is currently vastly under-developed in terms of product-market fit.
The Bigger Picture
When it comes to DeFi at large, we often refer to the idea of composability – or the ability for different applications and use-cases to build off of one another. This example paints a perfect picture of this idea. With the recent launch of Multi-Collateral Dai, Maker has been very vocal that they plan on incorporating real-world assets as collateral at some point in the future.
With this concept in mind, it’s not far fetched to assume that at some point in time, users would be able to pledge a tokenized property such as Marlowe as collateral for a permissionless loan. This also opens up the opportunity for other unique services such as prediction markets and derivatives trading to occur on assets that are historically only available to a select audience.
Generally speaking, there has been a lot of talk about the DeFi Liquidity model, simply stating that tools such as Uniswap provide a trustless mechanism to offer liquidy on virtually any Ethereum-based asset.
Moving forward, we largely expect RealT to create pools for other assets on the platform. In doing so, we hope that their guidance can serve as a stepping stone for other security tokens to seek secondary market liquidity – a crucial building block in the growth of security tokens as a whole.
Until next time!
Cooper is focused on building compelling blockchain products. He currently works as the managing director at Fitzner Blockchain Consulting and is a contributor to DAOs like MetaCartel and Moloch. He is an active member of the Ethereum community and has a strong interest in for-profit businesses such as The Block Crypto and Messari.