This year’s PropTech Innovation Summit, organized by Union Investment and the German Tech Entrepreneurship Center and hosted in Berlin on May 16th, has been a rewarding and enriching experience for us. Along with the other nine startups, we have been selected to present our unique concept for the enhancement of international real estate transactions. We pitched in the Save & Decentralise category (see below our pitch) and highlighted the need of a down-to-earth solution that leverages the blockchain technology without ignoring the legal and business foundations of any transaction.
The event has been well-attended, the organizers putting together a strong panel of experts to evaluate the concept, implementation, team and business case. Across the five categories, a diverse range of solutions was presented at the event, from real-time mapping of a construction site to digital aids for building management. We have reached the final stage of the event and look forward to further developing our solution and incorporating the received feedback.
For those of you who could not attend the event, we are sharing our pitch right here.
Hi everyone and thanks for lending me your attention and 3 minutes of your time. I promise I will return them back after the pitch. You lending me something (3 minutes of your time) against my promise to return it at a later stage is the very essence of what blockchains and smart contracts try to enhance – transactions, most of the time but not always with an economic finality, that happen only when trust among all parties involved is present.
Blockchains build multiple instances of a digital safe box for any type of content, a safe box whose existence anyone can certify but with access permitted only to those holding its private keys. Although a clear technological advancement in distributed data storage and computation, blockchains and smart contracts have yet to produce substantial improvements in our industry. Why is that? Because all too often, the implicit assumption and much cherished marketing headline, is that the value of the content increases just by being placed on the blockchain steered by a smart contract. But a poorly structured property deal lacking the necessary due diligence won’t turn royal just because it gets a kiss from its favorite blockchain. If placed on a blockchain, it will still be a poorly structured deal, certified as such now by many network nodes and executed fast by a smart contract.
Often portrayed as the Swiss army knife of digital contracting, smart contracts in their standard form…are neither legal contracts nor business smart in many cases. Plus, don’t bring a knife to a gun fight they say! – decades of dispute resolution, distilled in established practices and contractual terms, will take some time to be replaced by self-executing code. This is where we’re different. To successfully navigate the ongoing digital transformation episode, we believe decentralization and everything it enables is necessary, but not sufficient.
The completion of an international real estate transaction requires today a complex mix of legal inputs and financial services. The current time-consuming paper-based procedure is expensive, error and manipulation-prone. Lack of transparency in contractual performance often leads to disputes. PrepayWay’s mission is to reduce costs and disputes and increase transparency where beneficial to all parties involved. We do so by rebundling legal, financial and technology services in one product. We combine a public blockchain component, a newly established smart arbitration institute and smart legal contracts to offer a one stop shop for the global property market.
The market segment we focus on is the rather neglected one of low and mid-sized international transactions. For these high-volume low margin deals, we offer standardized solutions – how else would we make money – allowing also for tailored services in case of more complex and larger transactions. The integrated product costs a fixed fraction of the prepayment and can be settled either in fiat or cryptocurrencies. Finally – any transaction going through our ecosystem will produce a data trail. This can be monetized by giving its owners the possibility to auction it on our platform. Timely and accurate indices and benchmarks, as well as other data products designed to ensure the privacy of our user, will be the next step.
You can view the presentation materials here.