Hyperledger Foundation Hyperledger Global Forum 2022, 6 Oct 2022

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From YouTube: Real-Estate Property Management – Application of NFT, Tokenizati... Mohan Venkataraman & Gigo Joseph

Description

Real-Estate Property Management – Application of NFT, Tokenization, and DeFi - Mohan Venkataraman & Gigo Joseph, Chainyard (IT People Corp.)

The blockchain and DLT technologies have disrupted traditional business processes and helped transform them into new and innovative business models. Real estate and property markets are one area where the concepts of digital titles, real-estate NFTs, and fractional ownership are being explored. At Chainyard, we have been working with real estate clients to help strategize their use-cases and implement solutions. This presentation will highlight various use cases in the real estate domain but focus specifically on one related to a Property Management opportunity we worked on. The presentation will provide a description of the use case and a high-level overview of the business process. It will also discuss solution development applying NFT, tokenization, and DeFi concepts. It will conclude with a conceptual architecture of the solution. Apart from technical considerations, it is very critical to have the business model well defined and ensure compliance with prevailing securities regulations. Based on our experience, the presentation will highlight key considerations and challenges that are important to be addressed while developing the solution architecture.

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A

I think it's the end of the day, and so a lot of us want to go and hit the bars, but me too so I'll try to see how well we can do this presentation, so you enjoy the water and not drink in distress, so my name is Mohan like draman I'm, the CTO of chain yard.

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We are a pretty old blockchain company, almost seven years and my colleague here Gigio, and what we will talk today is I got a I got plenty of slides, so I'm going to try and see how I can do it effectively. But this particular thing that I'm sharing with you is not Theory. We actually worked with a real estate property company in Kansas and essentially the whole goal was to see what is the best strategy in order for us to uh operationalize it, but it's so what what we did is essentially work with them.

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Look at the details. uh We looked at all the choices of blockchains that are effective and so I want to share my experience here of doing it. So there's no right answer or wrong answer, because we are constantly going to evaluate how we are um constantly evaluate how our solution has been designed and improve upon it. So we are still working with the client and he's still working with his legal and so on. So that's the experience I want to share with you all I hope you enjoyed so moving forward.

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So there are a lot of things that we will go through. This particular thing is why blockchain for real estate, property management, rentals and then how is it? What is the use case about uh the basic concepts that we need to know, and how did we solution this now?

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If you really look at the real estate portfolio of opportunities, you know there are plenty of things that blockchain can be very useful for, like titles property records in North, Carolina there's a law that at least many states may have this law that you have to have land records for at least 100 years. Essentially, whether it was used for uh trash dumps or there was an oil spill or what happened, then there are others. Like you know.

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This fractional ownership is taking a lot of traction because people want to invest in real estate, and so they, how is the best way for us to invest in a real estate property that is distributed, stake? Which means you don't own the property, but you have a stake so that you can earn returns, mortgages, building supply chain and reinvestment, but all these blockchain use cases may not be very business friendly. The business model may not work because you may not make money.

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They sound very good on paper, but one use case that we did take with this particular client who came to us with that is, is about how to manage rentals. So why? Why blockchain for the rental property Market is there are I? You know, rather than talk about the regular advantages of using uh you know, a blockchain, the.

B

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Advantages for this particular use case are customization, so this particular rental. You know property management company, they wanted a package and they wanted to package their assets into this. You know into various uh opportunities for investment, so they can customize it rather than a right or a standard way of real estate investment. The second is transparency. You can actually see the documents that are associated with the property, whether it is investment worth it. What are the Returns on rentals and so on and so forth. So there's full transparency.

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Third is liquidity data sharing liquidity because you can tokenize it and then tokens can be easily swapped, for you know fiat currency or for other tokens. So liquidity is pretty efficient in this data sharing then tokenization and staking you know. Essentially you can stake it into a liquidity pools, so the tokens that are there one can stake into liquidity, pools and earn.

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um You know what you call dividends or you can earn Returns on on staking or even yield farming. Then there is agility because traditional real estate investment, it's very difficult for one to get out of the market, because the turnaround time or the cycle time is much more uh than record keeping. So you got an accurate record of the property.

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The maintenance records, the the history of what do you call its valuation going up and down in the market and, lastly, collaboration which is an opportunity when people are when Builders are turning around homes and you know remodeling it re-redoing it and so on. So you have collaboration between Builders and the contract, laborers, the property owner and so on and so forth. So there are many different advantages of white, blockchain and real estate.

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Now the use case that we are going to talk about is this is an existing company that is based in Kansas, so what they want. They do a lot of real estate rentals.

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So one of the issues that they faced is like for every property they had to go to the bank and then they had to get a loan and for which there is credit checks and so on and to us so buying property becomes a headache because every time, their credit checks and then the ability for the bank to give them a loan to buy the next property and the next property.

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So what they felt is that tokenization or fractional stake in the properties that they want to acquire might be a better approach if they allow investors like all of us, the small investor then probably There's an opportunity for us to invest and provide liquidity in acquiring new property. So our goal was to see whether we can Leverage What.

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Do you call tokenization defy and nfts as part of the solution, which is the client's interest, so the requirements that were very clear to us was that we don't want to do kyc on this, but we want to deal with accredited investors only, but accreditation or kyc would be done outside our experiment. Here then buy and sell stake with minimum latency. So they want to invest in the invest in the property, but if the property is not doing well, they want to get out of that market that rental market.

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So how quickly can you do that? Compliance with security reporting and tax loss? So you do not want to you want to follow the existing process. So, for example, they have to report, they have to have a report to the IRS or they want to report on taxes, or they want to report on how the Investments are doing. So all that should follow the traditional process.

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So what we want to do is to pull put a bubble around the solution, so anything inside the bubble will work with tokens nfts and the and the process of liquidity pools. Anything outside would follow a traditional process. You know, which means paper reporting using their traditional systems hot wallets because they want to easily do transactions, meaning like I, have tokens for a particular property. I want to swap it for tokens of another property or with fiat currency. I should be able to do that with minimum latency and the last one.

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The last is like coexist with existing investors, because there are senior investors who are used to traditional processes, so everyone does not want to follow the tokenization model. So how can you have both the Legacy model, as well as the new tokenized model work together? So those were constraints provided to us. So if you look at so essentially our proof of concept and as well as our strategy was, what is a business model?

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How does this company make money doing this, uh you know, is blockchain really essential, so we have to look at the business model. We wanted to look at the uh technology architecture, whether we should use a public blockchain or a private blockchain, whether we should use binance Smart chain or whether we use ethereum. We wanted to also look at the tools, the liquidity pool options that are available. Then what is the implementation plan? So we did a strategy study and, as part of the strategy, we also wanted to look at the ability to leverage.

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You know the the D5 contracts that are already available. So if you really look at pancake swap or you know any other- you know swapping unit swap they provide you with the contracts which are not changeable. So what are the opportunities for us to extend contracts that are out of the box and yet and meet the solution goals so some of the concepts that we need to be familiar with as part of the solution, I I'm, assuming that many of you are familiar with so many different talks going on here.

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But things like what is an asset? An asset is anything of value. You know a property like a house or a car, the value of that property can go up or down. So sometimes you may lose out on the value of that asset, or sometimes the asset May gain value. So what are assets? And then there are fungible assets which means like assets that can be swapped uh like for like so one ten dollar bill is the same as ten one dollar bills. So those are all fungible assets.

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Then you are familiar with what is blockchain. You know what is gas, because in all these Solutions one has to consider gas as part of the transaction cost. You do have options to choose which type of blockchain ethereum Finance smart chain or any other evm based blockchains.

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uh We do know we want to know what is nft I'm assuming nfts are uh something that has been quite talked about here, but non-fungible tokens. That means an asset. uh If, if there is a token, it can only be uh it has a unique identity and that it cannot be swapped for another token, so every non-fungible token has a unique identity and you cannot swap it for any.

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So, for example, if I lent you my laptop I need my laptop back, it's a unique laptop I cannot get another somebody else's laptop in exchange for what was borrowed from me. uh We also know what is a token. A token is a piece of data, but um essentially it's a piece of data. You know, and it contains certain information such as a token ID, a token name, uh the description of the token, how much can be minted out of that?

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On that token, and then the business rules associated with that liquidity pools uh those who are not familiar. There are liquidity pools which are nothing but automatic market makers, you're familiar with NASDAQ, which is an exchange. These are decentralized exchanges where the market makers are automatic, which means pairs of tokens can be created in a pool, and we will talk more about it and finally, the wallet. So these are all like essential components, essential Concepts that we we must understand before we build solutions that are related to tokenization, D5 and nfts.

A

So the key uh you know this is the analysis of the problem. So the way we analyze problems is slightly different from I think every company the way they look at things. So what are the organizations that will be participating in this particular solution? So we have the real estate company, uh the company that actually is is wanting to do the solution, which is our client.

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We have property, LLCs and we'll talk, so each property that is there in the market is managed by a separate, distinct LLC model, which means it's a separate entity that manages that particular property.

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Then third-party kyc, a third-party company that will that will do kyc for us, meaning like uh accredited the investor and then uh and then crypto exchanges. Crypto exchanges are like coinbase from where you have to buy ethereum for paying gas or BNB for play. You know for paying gas, gas and other or exchanging your tokens for your Fiat dollars for usdt or other types of tokens, so we need an exchange. So those are all the organizations now, the personas that are that are participating in this particular solution.

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The property manager, the pro each property, has a manager or maybe a group of properties may have a single property manager. The role of the property manager is to effectively manage that property, collect rentals, convert them into dividends and then issue them to the investors.

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uh We have the investors, they are the ones who are buying or having a stake in the property. Many properties, one property it can be or it can be in the holding company. Then there is a renter who actually rents the property and pays um uh pays. uh What do you call the rent which is converted into earnings? Then you have liquidity, pools and I used a pool here, but a liquidity pool is is a pool where pairs of tokens are available from investors.

A

So, for example, I could put into this pool usdt comma some property token, which means it's a pair. That means anytime an investor. Is there equal values of both? Those tokens have to be dropped into the pair by the investor, and then borrowers can borrow from this pool by swapping one token for the other, so usdt could be swapped for a property token or a property token could be swapped back into usdt.

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So a pool represents a pair of tokens and one to you know, and investors have to always invest pairs of tokens of equal value. That means, if I put 10 usdts I had to put equivalent property tokens as part of the pair now swappers can just simply swap so. People are typically used to going into the crypto exchanges and buying tokens and selling them right.

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That's the traditional model by which almost I know all the crypto investors do they go to coinbase buy some usdt uh buy some ethereum, and if it goes up in price, uh you know they sell it to make some profits, but liquidity pool is the concept by which each one of us can become investors and each one of us can become borrowers. So it's a good, uni, Swap and pancake swap are all good examples of liquidity, pools then transactions. You know these are the transactions and liquidity into the pool or create a pool.

A

Anybody can create a pool as an investor tokenization, swapping one token for another, registering your property redeeming your tokens, buying and selling all our transaction types that will work on this and finally, what are the assets that we are dealing with? So we have the property, which is the one that we are going to convert into, uh that we are going to issue an nft against. We have LLC tokens and holding company tokens. So now let us look at how this model will work now at any point in time, I'm, not making sense.

A

Please feel free to stop me, um but let us see how this works right. So the first step in all this and I try to animate. This is that you have the holding company. In our case it is our client. What did our client do? The first thing is they issued prop, you know, holding company tokens, so look at it as a company issuing shares and I call it etchy. You know holding entity T1 tokens, so these are all tokens.

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You know if the holding company thinks that I want to issue one million dollars worth of tokens. They will issue 1 million worth of he T1, so issue, entity, tokens and also accredit and register investors, so every investor is registered with the holding company. Now, what I'm describing is the approach we took based on existing regulations and de-risking our solution? Okay, so don't question me on why I did this?

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It is really because we wanted to de-risk the holding entity as much as possible, but I can give you the reasons why we did that the next step is for uh you know, so there is a property that the holding company wants to buy right. There is a property in the market they want to buy, so they buy the property and then they incorporate it associated with an LLC, so every property that this company buys it give it. It incorporates a separate LLC to manage that property.

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Then what happens is they? Can they issue an nft against that property? Now the nft did not play a big role in our solution today, but their idea was that in the future that this property could be floated in the market in the form of tokens and as the property value goes up, the ownership of the property could change. So that was the intent of issuing an nft against the property.

A

Then tokenize that property, so now the property value, let us say you know they want to issue Stakes for investors right, so if they want, if they thought they wanted to issue a million tokens, they would issue a million tokens for investors like us to just have a stake in the property so that anything that we earn out of that property can be shared among the stakers.

A

Right and then essentially, a property manager, that's associated with that property, so his role is to collect um you know, rent and process the dividends. So there are many ways in which the dividends can be processed. He could collect the rent in uh dollars and then convert it to usdt and then give it to the investors. So there are different models by which you can do this.

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Now, what happens? Is the holding company can create a liquidity pool where U.S dollars into holding company tokens T1 right? So that is one liquidity pool, so if any of so once they create the pool what they would do is they may have a million usdt with equal an amount of T1 T1 tokens for investors to take right.

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So if I want to be an investor in this liquidity pool, I would go into coinbase, buy some usdt with fiat currency I'm, just using coinbase as an example, and then I would come here as an investor as a borrower. I can borrow T1 tokens by putting in usdt. You want to learn more about liquidity, pools, it's a good way to learn or it you know.

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So if I want to be an investor, I can put equal amount of usdt and T1 tokens, but I don't have T1 tokens, so I can only be a borrower right now.

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You can also create liquidity, pools on the property, so T1, comma T2. That means these tokens. T1 tokens represent the holding entity and T2 represents this particular property. Now what is the idea? Is that if you wanted to invest in this property, you would buy T1 tokens from here. You go to this pool, you drop in T1 and you buy T2. So that's that's. How liquidity pools work right and why do you need the exchange? Because you cannot buy usdt?

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You want to buy usdt by putting in US dollars, so you need exchanges, and so finally investors are here, so they can invest into this property by dropping in you know they can buy T2 to in their T1 tokens here and they can use the T1 tokens to invest in this property. But liquidity pools are kept. Basically two functions in each liquidity pool, you can add liquidity or you can swap tokens. You can swap T1 for T2 or you can swap T2 for T1.

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So those are the two functions you have, or you can add liquidity by dropping the pair of coins of equivalent value into that pool right. So what do investors do? They can buy tokens any of those tokens. They can add liquidity to the pool they can swap LLC tokens for fiat currency.

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So if you want, if you want to get out of this Market, you take all your T1 tokens, put it into the school, get your usdt and you can exchange your usdt for fiat currency, so investors can do those things or investors can receive dividends in their wallets. So each one of these investors in this particular property have bought a certain amount of T2 tokens, and so, when Dividends are issued, they will get equal amount of those tokens. You know.

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Basically, if the Dividends are paid in dollars, they can go to coinbase and convert those dollars into usdt or they could all the corporation could also give them T1 tokens as their dividends. So essentially that is the model foreign, so the contracts that we had to write in this is these are all the contracts. So there is, um there is an investor, so there are rules around investors how much they can invest. So, basically, when you define the business model, you have to be very clear: what are the business rules right?

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It's not I mean minting tokens and exchanging tokens and exchanges are all very easy to do. It's. It's not rocket science, but the real science comes in is what are the business rules. So there are business rules for investors. How many tokens can they buy?

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How long should they hold on to the tokens before they can they can redeem it rules of uh you know what is the percentage yield they will get for their investment, so those are all rules, so we build it in then there are holding company rules like the holding company contract essentially maintains a registry of the properties that they are buying and what tokens are they issuing uh you know, and then they have rules on LLC.

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You know LLC templates if you're familiar with ethereum, we use templates as part of the approach to spin-up LLC contracts and then issuing holding entity tokens. uh You know this holding company manages LLC, so you have LLC manager which manages all the contracts each LLC contract. It also manages LLC tokens. It also manages the property template which describes what the property looks like and then the decks consists of we used pancake swap in this particular project. So pancake swap gives you the following contracts.

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Okay, if you go to a uni swap unit swap has got its own contracts, so you can use the pen pancake swap contracts to create a pair I said you can create tokens, so you can create a pair of tokens, T1, comma T2, to create a pool. You can use Pancake Factory and you can use the pancake router. So actually, these three are the main contracts for adding creating a liquidity pool and adding liquidity into the pool.

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So you so if you were to summarize and then obviously you have tokenization contracts, you have the erc20 for issuing tokens like T1 and T2. You have nft, which is allowed, which allows you to what do you call issue and nft against a property that is another contract? You have the token template which allows you to mend different types of tokens, so I use it standard token template to mend T1, token contract, T2, token contract and so on, and then distribution rules.

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So how do you distribute the dividends and how do you distribute whatever you earn out of the? What you call liquidity pools, actually give you liquidity tokens based on the amount of investment you do or also you can you can earn. uh What do you call what is known as yield farming? You can take your tokens and invest in other pools and so on. So there's a lot of things by which you can make more money out of the investment you've done.

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So these are the contracts that are essentially used in our in our example, and then these are all the application contracts that we have. We have authentication the standard password wall, the basic LLC report, the investor report, so I said everything has to behave as though our our model is traditional model. So this works at the holding company level. They print these reports for reporting purposes, tax purposes for investors and so on.

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So these are all application components, nothing to do with the contracts, so critical considerations when you build such a solution is smart contracts have to be resilient because you do not want to lose. You know money that has been minted. You want to make sure it is not stolen out of your wallet, so you really have to do good testing of your token contracts and your liquidity pool contracts.

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The second is your business structure. You've got to completely define how your business structure will look, what are the business rules of the holding company and how many tokens Can it issue at the holding company level and then what are the rules? You know, how do you create LLCs for each property? What are the business rules around that? What are the legal regulations around that and then how many tokens can be issued against each property? What happens if the property suddenly is destroyed by an act of God or what happens if the property loses value?

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So you are not always going to make money you might have invested in a property, but that property could have lost value because of various others. Reasons like there was a there were some unforeseen events in that area, so people do not want to rent the property. So those are the rules that you have to understand and formulate are on the business structure and the business rules such as, if we collected x amount of rent. What is the way by which it is distributed, so how much of it will be?

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You know, say if I collect 100 a rent of, let us say 100, then how much of it will be withheld by the holding entity, how much of it is going to be withheld by the LLC? How much of it goes to investors and then how much of it goes as gas fees. So you got to have the complete structure of how you would distribute that and that is built into the contract.

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Then you have wallet integration. It's not when you build custom tokens. If you, if you have metamask and you go into coinbase, it is easy to look at all the standard tokens. But if you have minted your own tokens, then you have to know how to integrate your wallet to the Token addresses that you have mentioned so wallet. Integration is critical and, finally, governance. How do you manage all these properties that are part of the holding entity? You know who are all going to give.

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You know who are the ones who make decisions on the business rules associated with this particular solution, so the holding entity cannot make ad hoc. What do you call rules or regulations around each property or around the whole business model?

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It has to be collective decision making and what is that governments governance model look like, so these are very critical considerations when you design the solution, but the solution has got a lot of risks right when you build, you know: I I, you know everyone talks very sweetly about D5, infj and stuff like that, but there are a lot of potential risks around that and what are those risks? So one is: how do you build a solution?

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What are the key considerations when you start doing business, analysis and business and the technical analysis and actually implementing the solution? And then what are the potential risks? So there is impermanent loss, so impermanent loss refers to the to a case where, let us say a liquidity pool is essentially a formula base, so, for example, unit swap if I want to put a pair of tokens, T1 and T2 the way uni swap works, it's an automatic Market maker, which means, and it works on a constant principle. T1 star T2 is equal to a constant.

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That is how liquidity pools work. They are all based on formula. It is not based on an external market report or a market research. So if a pro, if you put a token that is associated with the property into a liquidity pool, its value is going to go up and down based on the supply and demand of each token. In that pool and based on that formula, you know I I'm, hopefully making it making it simple.

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But if I have two tokens, T1 and T2 in a pool, then the way uni swap works, for example, or even pancake swap is T1 star T2 is equal to of a constant. That is how it works. So if you withdraw T1 tokens, then the supply of T2 goes up and the formula then reprices the price of those tokens. It is based on an algorithmic formula. It is not based on Market Research right I mean it's not based on Market input.

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So one of the risks is, you bought a property right and the liquidity pool is constantly pricing it based on a formula, but the property value has gone down. Let us say you, you put a token and the token value is 10 USD the token values, 10 USD T1. Well, the property value in the market has increased to 20.. The liquidity pool will not reflect that and you have a loss of 10 dollars right, so that is called impermanent loss.

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So there is a risk of impermanent loss. If you don't Design This properly, especially if you create a pool, let us say usdt and ethereum. Usdt is always packed to one dollar, so it is not going to be volatile, but ethereum is going to be so volatile that your investment, sometimes you may have impermanent loss because ethereum sometimes drops drastically or sometimes increases, and you have a loss of value in your investment. So that is a big issue with liquidity pools and they are trying to solve that.

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The second is fee changes, so changes in the fees can always happen with, depending on the blockchain that you use protocol upgrades. There are new protocols that are coming in and those protocols may work differently from the way you design the solution. You have security, hacks people get into your wallets and then you lose your tokens, so you got to build. You know you got to be considerate of this and unanticipated Regulatory changes. What if somebody says you know these tokens have to be taxed because they are really considered as real estate Securities.

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So when you model the solution, you have to make sure that these critical pieces are considered and these critical risks are addressed. So no so that is why you know our entire POC was to test. How do we be resilient against all these considerations and these risks? And everyone has to do that? Otherwise, most of the solutions fail. You know, I mean I, have not seen one successful project in the D5 space other than borrowing and lending or insurance and stuff like that.

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But you know the Celsius case: clcs was a centralized decentralized exchange and they went bankrupt. They went bust because they did not securitize or collateralize their their Investments for Borrowers, so our architecture was pretty straightforward, so we have F3 application and contracts, so we used initially, we did binance smart chain and then we tested it on ethereum and in this case the the swapping the liquidity pool that we used was uniswap and pancake swap both are available.

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In fact, pancake swap is derived from liquidity from unit Swap and the contracts are available publicly and you can actually program them to create your own pool and your own investment swaps. You have the application API in this and then the off-chain database to have things like property records. You know investors want to see what the property is. Where is it located? How much will it give me in terms of rent and so on and so forth?

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So all that is stored off chain and then, obviously you have the user interface, and then you have the metabask wallet that is integrated into this. So if I invested in a property, I can see how many T1 tokens I own in that property or how many sorry, how many T2 tokens I own in that property or how many T1 tokens I have with the holding company that I can invest in any of the properties that the holding company has.

A

So if I were to summarize T1 tokens that are issued at the holding company level are used for investing in any of the properties. So the way this company wanted to work is they wanted to use their own tokens. They wanted to make their own tokens at the holding entity level which, which I call T1 tokens. Those tokens can be used to invest in property, one property, two property three, so basically you will go to a liquidity pool, use the T1 token to swap it for T2 tokens for property, two T3 tokens for property.

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Three, so essentially you can use the holding company tokens and that is how we built resiliency from impermanent loss right. So we don't want the fluctuation of external crypto to affect our investments. So this is our architecture. It it details out what is happening in each one of the layers. The the top layer focuses on. How do you set up the whole environment? The application manages the property catalog. The property document details views about each LLC. How is it managing the property? What was the rent collected?

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How much did investors make on each one of those properties? There are investor views so that they can see their balance at any point in time or they want to add liquidity or swap their tokens and then there's a dashboard and then the contracts are liquidity, pool contracts which are pancake, swab or uni. Swap we use these contracts, the out of the box, and then we use tokenization to Mint tokens T1 T2.

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We actually extended the erc20 and erc721, so one of the things is like I've used a lot of publicly available tools and the deficiency in many of these tools is that uh you know you have to build the rules at the token levels, because if you build that, if you build the rules at the application layer, then somebody coming out from outside anybody can access a token contract.

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If you know that address correct, if I know the address of a token I can go and interact with that token, so the token has to behave the same way whether you come through coinbase, whether you come through, you know, binance us or whether you come through the application. Its Behavior has to be always consistent and the only way to build consistency into these tokens is when you put the business rules within the token. So the token in our case, T1 and T2 actually have business rules with checks who is asking me to buy.

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You know who is actually wanting me to send these tokens. Is it an accredited investor, so those rules are actually built at the extended token level and not into the application. So those were things that we wanted to test.

A

The second thing we wanted to test was that we did not want anybody who is not part of the solution to be putting money into the pool, so we didn't want somebody coming in from the external world and putting money into the liquidity pools, so we had to build rules inside these token contracts to say if you are not a member, if you are not a registered member of this particular entity holding entity, you cannot add investment into the liquidity pool or you cannot swap so.

A

We had to take those rules and build it right into the contracts of the tokens. So that is very critical consideration if you want your application to behave the same, whether you come through the application, whether you come through a metamask interface or another wallet interface or you directly talk to the Token address.

A

And similar potential applications for this kind of a rental. You know where you want to earn dividends by investing in assets. There are many different applications of the same model, so I can use the same model that I've shown you for investment in private Aviation. A friend of mine has seven aircraft, and essentially they have what you call fractional investment. He is a majority shareholder, but the rest of them is tokenized and basically investors like us, have an investment in that aircraft. So if the flight is full, they make money.

A

If the flight is empty, they lose money. But of course that's a good application of. How do you want to? You know, create an nft out of your aircraft and then how do you want to make sure that you can tokenize the seats or you can tokenize the flight flight hours? And then investors can have a stake in this aircraft and earn dividends. Car rentals, oil and natural gas right essentially, a rig is usually shared by many different oil drilling companies. So the rig is very important in terms of an asset.

A

You can token you can nft the rig and you can tokenize the asset and, as the rig is being shared by different oil companies, you can start earning dividends, so dividends can be in the form of tokens or dividends, can be fiat currency, converted to usdt and usdd converted into a property token or an asset token, and finally, art and interior Decor rentals. So I used to be you know.

A

In the early days of my career, I had a friend all he did was buy very expensive artwork and he will go to different homes and he will change their artwork every week. So some of the some of the folks had Rich art in their homes and the reason was he would they would rent, they would rent the wall to him and he will come and put a different picture every time on their wall and they would be expensive paintings, and so that's a rental business.

A

So if somebody want, if somebody had a rich, elegant taste and they wanted different artwork, so the art rental business art can be tokenized and then the rental business can give the renters or the stakeholders in that art dividends based on the rentals.

A

With that, you know, China often follows the methodology. That is uh tell me when you want to come up. Okay, Junior always has a methodology. So when we do an assessment of any client, we look at the following things. We look at the business, which means what is a monetization model? What is a funding model? What is the market adoption, because without adoption, Your solution will fail and we look at the legal and compliance rules, so that is our solution approach.

A

So we look at the business, the technology, whether we use public, private or hybrid, whether the platform you know, and what kind of a platform or network we want. If you want public, do we go with hedera or do we go with ethereum or we go with binance? We also look at the structure of the of the network and all the technology components. So I told you I'm using pancake swap contracts, we had a look at which contracts we want to leverage out of the box and which contracts we want to extend.

A

And, lastly, we look at one-time, Capital expenses ongoing operations and how do we governance? You know, govern the solution. So that's our approach and that's exactly the approach we followed here and our model for decomposition is to look at various aspects of any solution. So this is the model that we follow for every client. That means when we go into a problem, we do a detailed analysis of all the aspects. So this is the dimensions by which we assess that business case. It is not that we dive straight into chain code or into contracts.

A

We look at what is the business model? The organizations involved, the personas the assets, the contracts that need to be built, what Integrations are required? What are the policies and procedures, audit and compliance requirements, transactions and business events? Information? What kind of articles are needed in terms of getting secure data? What are the application components? What is the portal interface that sits on top of the application and what is the mobile interface that is required? And, finally, what kind of an environment are we going to deploy this and how? So? This is our approach?

A

Typically for every you can say opportunity, and we have a series of things that we go through within each one of them before we actually design the solution and is and figure out whether it is feasible to build a solution, whether it makes sense or not, with that I'm going to just give it to G Joe. Here who is going to say some things come on? Oh okay, you can talk quickly in Austin, yeah,.

C

I think I think we are already times up so so maybe maybe there's only one line. I probably wanted to add that chain yet started it. A blockchain journey along with hyperledger in 2015, when hyperledger was, was being developed at the IBM Labs, along with the Linux foundation. So we got the opportunity to do the testing of the fabric at the labs and after six years of the journey I mean we were not known as China.

C

At that time we were known as our parent company called IIT people Corporation after six years of our journey I. Think the last year, Everest Everest group published a report about chain yard. I mean they their assessment, metrics out of 23 ID companies and China was way up in the top as one of the major Contender on the blockchain services.

C

Our email address is here right, so I think I will stop at this point and we do have a product called the trust, your supplier and and we can stop for a few questions and.

C

Let's take a question.

C

B

C

There are people on the virtual audience, so we can ask.

B

Why does it take you to set one of those systems up in regards to helping a client with a new holding company and all the LLCs? How long does it take to get all the information together.

A

From four weeks to do our six weeks to do the it takes anywhere from four weeks to six weeks to do that, assessment and Analysis and typically, if you are doing a p, we don't do pocs anymore, because most of the concepts on blockchain are proven. What we do is proving some of those critical pieces, whether they will work or not. So, for example, in this we didn't do a full POC.

A

We wanted to see whether you can make modifications to the you can extend the token contracts to have the business rules of the LLC and the holding entity, and then can investors add to the pool and how does the pool behave when there is permanent impermanent loss or whatever? That is so. To that extent we built so this particular thing took us about six weeks.

A

Okay, just to prove the you know, do the assessment based on our approach and to do the POC, which I call proof of feasibility, but normally, if you had to build a solution after that, it is, it is much more easier because we are understand what we need to build, so we always have the fundamental fundamentals laid out and if the fundamentals are clear, it's a breeze for us to build depending on the size of the solution.

A

Obviously, sometimes it takes three months to do an MVP, and sometimes it takes 10 weeks to you know more than three months to build an MVP, but but over the time over time we have built so many applications. A typical assessment for any solution. Typical assessment I says that strategy development is four to six weeks and a typical approach for building the solution.

A

An MVP is up about three months and and then Hill one Hill to refine that solution based on whether it meets your client goals and the adoption is good, is three three months off. What do you call incremental Hills to make the solution robust or or productionize it.

A

So you know this, this presentation I have uploaded, so you have all the slides and you have the email address. Obviously it is a little complicated for me to talk on many different concepts all the time, but in order to do justification that what we built I think like um I, had to skip through a lot of the concepts or muddle it up as I went through so I hope it was enjoyable and you all had something to learn from our experience.

A