How to access the most attractive real estate markets in the world with blockchain technology
Property is one of the oldest, most regulated and desirable asset classes. However, the $320 trillion market remains one of the most inaccessible to everyday investors. Many potential investors are sidelined by high entry costs and significant downside risks associated with poor investment decisions.
Investors are demanding an improved way to gain exposure to the enormous benefits of real estate deals with relative ease and minimal risk. Web3 real estate investment platform parking lot is leveraging blockchain to address the current bottlenecks facing real estate investment. Parcl brings the world’s most sought-after real-world asset (RWA) to the blockchain by providing a platform for users to gain exposure to entire cities through an index.
An RWA index is one that measures the underlying price of a tangible asset that exists in the physical world that has been connected to the blockchain. By investing in an RWA index, Parcl users allocate capital to an investment vehicle that tracks the price movements of a city’s residential property market.
What sets Parcl apart is its focus on high-demand markets such as New York and Los Angeles, which are notoriously challenging to invest in due to high prices and agent fees. Beyond tokenizing real estate on the blockchain, Parcl prioritizes these otherwise inaccessible markets, offering an innovative solution for DeFi merchants seeking exposure to the global real estate landscape.
The story of Parcl
Parcl’s story began in the depths of the COVID-19 pandemic, which will undoubtedly disrupt the real estate market for decades to come. Parcl’s experienced co-founder Trevor Bacon worked as a hedge fund manager at the intersection of the technology and payments industries. Bacon’s expertise was in identifying trades of relative value where one sector lost at the expense of another, and capturing the price increase in the winning field.
The COVID-19 pandemic created many opportunities, especially in the US real estate market. For example, while real estate values in major New York cities such as Manhattan crashed by up to over 30%, the suburban counties saw a corresponding increase in demand, causing prices to skyrocket.
However, there was no viable solution for investors to capture this irresistible opportunity. The traditional investment approach required acquiring an exact house or building in the region, a process that was far from instantaneous. Besides, Trevor Bacon had wondered,
“Why can’t [investors] Trade the value of general areas such as neighborhoods, postcodes, towns or cities? Why couldn’t an investor be offered exposure to a city or neighborhood instead of having to choose an exact house or building?” Is there a way to avoid a hyper-specific investment that requires so much money?”
Parcl was born to make these previously impossible trades possible and level the barriers to global real estate investment. As a case study, Parcl is already giving international users and DeFi merchants the opportunity to gain exposure to the US real estate market for the first time.
Parcl’s blockchain-based solution further democratizes access to the most lucrative real estate markets, allowing anyone to invest as little as one dollar in a traditionally barricaded asset class. Parcl makes it possible to invest in a single city’s residential real estate market, unlocking high-demand markets such as New York, Los Angeles and Miami.
How Parcl is different from other forms of property investment
Parcl differs in several ways from other forms of property investment. Most notably, Parcl’s DeFi protocol enables users to invest in neighborhoods and cities rather than specific buildings. Parcl indices are the first real-world asset (RWA) index to represent a city’s residential property market. Each Parcl index represents the median price per square foot in a given geographic location and is freely tradable within the platform’s liquidity pools.
Parcl’s radical approach to property investment opens up many advantages. First, it eliminates the particular risks of owning a property in a distinctive region. It allows investors to gain exposure to multiple RWAs through a single vehicle and thereby extract value from the underlying neighborhood.
Parcl’s new platform for DeFi traders is known to bring unprecedented liquidity to one of the world’s most illiquid assets. The current real estate investment landscape requires investors to engage multiple stakeholders, including agents, brokers, title companies and local governments, before entering or exiting the market. In the US, a house is on the market for an average of 22 days, with a standard closing period of 30 to 45 days also included. In the UK, it takes at least 57 days to go from listing a property to closing a sale.
Parcl’s solution drastically improves the timeline for real estate investors. Trading Parcl’s RWA indices reduce the entry and exit timeline to mere minutes and allow users to proactively manage their portfolios.
In addition, the Parcl platform represents a significant improvement for Real Estate Investment trusts (REITs) and the idea of passive income from real estate investments. While REITs focus on investing in different buildings in different regions, such investments are usually dependent on various real-world factors beyond the average investor’s control.
For example, investors expect the property management company to remain capable and hope that architectural trends in the area do not make properties less attractive to tenants. Parcl limits these risk factors by focusing on geographic areas rather than property-oriented features that are more subject to constant change. Investors can thus benefit from real passive income while eliminating the stresses associated with actively managed properties and investment vehicles such as shares.
Finally, Parcl unlocks unprecedented flexibility and access to the most lucrative cities around the world. Unlike fractional ownership applications that often provide access to less desirable areas, Parcl focuses on entire neighborhoods in the world’s top performing cities, including New York, Miami and Los Angeles, with international markets such as Paris, London and Singapore. available in the near future. Parcl users can invest in multiple cities simultaneously, predicting market movements in a bullish or bearish direction.
The ability to short different regions is also a powerful tool for experienced DeFi traders. It provides a way to hedge against macro headwinds, such as rising interest rates, while protecting rental properties within those jurisdictions from declines in value.
The Parcl platform
Built on the low-cost Solana blockchain, the Parcl DeFi platform is easily accessible with compatible wallets. Users can invest in their favorite locations, with over 15 cities currently listed on the platform, users can build their dream property portfolio. Parcl delivers cutting-edge data analytics to enable investors to make informed decisions, a liquidity pool for passive income earners and the flexibility to enter and exit positions.
Parcl’s protocol further enhances traditional leverage opportunities, allowing investors to own property with as little as 3.5% down payment. Advanced traders can maximize their real estate portfolio on Parcl by leveraging their initial investment up to 10x for greater returns. The platform also offers collar position mode, which allows investors to minimize the risk of volatility in both market directions by simultaneously holding long and short positions.
Who Parcl is for
Parcl is ideal for DeFi traders and mid- to long-term real estate investors who have convictions about the trends in a particular area and want a relatively easy way to gain exposure to such favorable dynamics. Users can maintain their position in these geographic areas by holding related open positions and providing liquidity to earn passive income.
Short-term traders also benefit from Parcl’s flexible real estate trading platform. Parcl’s current investable markets have returned an average of six per cent over the past quarter, making the offering attractive to investors seeking short-term property gains without the long-term commitment of owning and maintaining properties.
Furthermore, high-frequency and momentum traders can leverage Parcl’s platform to boost the performance of their real estate portfolio. Aside from the potential to profitably trade financing interest on listed assets, traders can take advantage of a superior faster entry and exit than traditional real estate.
Parcl Labs and the future
The Parcl property investment platform uses powerful and detailed insights provided by Parcl Labs, the protocol’s lead maintainer. Parcl Labs’ core invention, the Parcl Labs Price Feed (PLPF), tracks real-time changes in the value of residential property across multiple geographies and property types.
Parcl Labs employs an enterprise-level process to evaluate hundreds of millions of data points that form the basis of their innovative cost per square meter for tracked neighborhoods. Parcl Lab’s resource-rich and granular data collection disrupts the largely unchanged information ecosystem that has underpinned the real estate industry for decades. Such advanced data will also pave the way for Parcl to expand to more markets such as Paris, London and Singapore in the coming months. The daily price feeds have already been trusted by top media outlets to provide daily updates of various real estate markets: CNBC, CBS and Fortune.
Experience the power of simplified property investment with Parcl.
Parcl leverages the power of the blockchain to provide innovative ways for investors to capture the value of real estate price movements in different geographies. This previously impossible trade demonstrates blockchain’s potential to solve significant problems with RWAs and underlines Parcl’s commitment to meeting these challenges.
At its core, Parcl levels the playing field for everyday investors by offering unmatched liquidity, desirable locations, global access and advanced features to exploit price movements in multiple directions. Parcl’s core proposition of allowing investors to gain exposure to entire neighborhoods and cities without owning specific real-world properties is a game-changer for the simplistic real estate investment landscape.
Parcl Labs is poised to significantly drive mainstream real estate investing by providing cutting-edge insights and trading solutions. The race to disrupt the multi-trillion dollar industry is well underway and Parcl’s upcoming expansion into new territories will only pave the way for more investors to build truly global real estate portfolios!
This content is sponsored by Parcl.
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