Inspiration
Antonio was born and raised in Dubrovnik, Croatia - a small Mediterranean town whose entire economy is based on private short-term rental properties. During the 2010s, as the tourism industry was booming, every family in the town was getting loans to renovate their old properties or develop new ones. When Covid struck and halted all international travel, people had to sell their properties (if they were able to) to pay off their huge loans. This situation highlighted the need for an alternative to conventional financing options. Antonio and Nick teamed up to build a proof of concept for ProperFi which would both help property developers and democratize investments in a hyper-lucrative asset class that traditionally had extremely high barriers to entry.
What it does
ProperFi is a platform and a marketplace for the tokenization of luxury short-term rental properties. Going beyond offering just lucrative returns, our protocol is built on three main pillars: economics rights (10-20% yield), governance rights, and usage rights (timesharing off-season). On one hand, we’re solving the problem of lack of liquidity of luxury real estate properties, lowering barriers to entry for retail investors, and offering an alternative source of financing for property owners/developers. On the other hand, we’re helping to make the DeFi space more stable; mitigating the lack of sustainable revenue-generating yield protocols which was highlighted by the events of 2022. Existing protocols confine themselves to offering economic rights. The novelty of our project stems primarily from the extension of these services on two additional fronts. First, none of the other platforms focus on short-term rentals. We place the emphasis on such a market due to its higher yields and because it opens up the possibility for us to offer usage rights to all of our token holders. More specifically, all participants of our platforms will regardless of their degree of involvement opt for timesharing experience in low-season months - large token holders will have guaranteed 5-night stays and the remaining 5-night blocks will be distributed through a lottery-based system. Second, our solution deepens the sense of ownership token-holders have as we offer all token-holders the possibility to get involved in governance decision-making. Even those individuals holding a modest or minimal number of tokens will have a right to set out proposals that will be subject to greater scrutiny and voting by the other holders.
How we built it
For the hackathon, we built a simplified version of the protocol - a fake deed for a property is stored on the IPSF (along with a visual of the property) and is connected to an ERC-1155 contract deployed on Goerli. In the process, we used Verbwire API (calls for deploying a simple contract, creating tokens, and uploading the local files as metadata to IPSF). For the front end, we used to react with tailwind css, and we built a landing page that describes our project and displays 3 listings. When the Buy button for a property is clicked, the user is redirected to the minting page. Upon connecting a wallet, PropTokens are minted and transferred.
Challenges we ran into and accomplishments that we're proud of
Neither of us had substantial experience with front-end development until this hackathon, and this was our first time working with React. We were wrestling with it throughout the hackathon but it turned out very well and we're very proud of it.
What we learned
As mentioned, we learned a ton about front-end design and development, as well as about interaction with blockchain through Verbwire's API. Working on the code also helped us develop our idea in more detail.
What's next for ProperFi
The plan is to tokenize a single property in Croatia before this summer using an existing TaaS platform, which will serve as an MVP. In the meantime, we will develop our own platform in-house and use it to scale in 3-5 locations before the Summer of 2024. In Q4 we are planning to deploy our marketplace which will drastically increase the liquidity of these properties and be a big point of inflection. With the added liquidity the plan is to scale worldwide.
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