Origin Protocol, Roofstock to buy, sell homes using NFTs on blockchain

Origin Protocol and Roofstock have announced a new marketplace for single-family rental homes that can be bought and sold through non-fungible tokens on a blockchain.

The platform, Roofstock onChain, is set up to accommodate payments in USD Coin for digital objects, or NFTs, representing real homes. (USD is a type of stablecoin that has a one for one exchange rate with the U.S. dollar such that it doesn't have the volatile swings in values other cryptocurrencies have.) Ownership is recorded on the blockchain, which serves as an immutable ledger and is being increasingly used in the secondary market for debt.

The partnership between the technology company and single-family rental firm started off small with a couple of listings, but eventually aims to sell real estate through non-fungible tokens on a broader scale than others have in the past.

"The Roofstock team is going to be sourcing some homes, then, collectively, both sides are going to be looking for the buyers of their homes, and gradually ramping up," said Matthew Liu, co-founder of Origin Protocol. 

Rootstock charges a 2.5% brokerage fee and Origin Protocol charges a 0.5% for facilitating transactions, in which titles change hands using a single-member limited liability company as a vehicle. The NFTs represent ownership interests in those LLCs and transfers using the blockchain are legally enforceable, according to a press release issued by the two companies.

The venture marks a new direction for Origin Protocol, which previously has sold autobiographical NFTs from celebrity investor Paris Hilton and viral videos using blockchain technology. Liu said he welcomes the change of pace given the company's aim of being a broad Web3 marketplace for a series of vertical industries.

Real estate is "a massive market that can be disrupted," said Liu.

"There are a lot of inefficiencies and the technology is well positioned to tackle this vertical," he said. "We anticipate doing much more real estate over time."

If the platform is successful in that goal it could demonstrate that, "this world of crypto/Web3/blockchain technology is not this niche thing that people speculate on and only the nerdy weirdos talk about," Liu said.

Potential for Web3 technologies to upend mortgages also remains possible in the market at large, he said.

The current partnership allows for financing but currently lacks a mortgage component. Loans secured by cryptocurrency assets can be used. These loans typically are overcollateralized to address the volatility in their valuations.

Liu called this, "a bit disruptive to mortgages."

Some lenders have offered cryptocurrency mortgage products or payments, but interest has been inconsistent at times. United Wholesale Mortgage announced a plan for cryptocurrency loans in August of 2021 but by October of that year, it had dropped the idea.