This is a MIP6 Proposal for the addition of REINNO’s tokenized commercial real estate backed loans to MCD by REINNO.
1. Who is the interested party for this collateral application?
The asset originator is REINNO as is represented by Viktor Viktorov (@Viktor_REINNO, [email protected], Co-Founder and Chief Executive Officer) and Hristo Piyankov (@Hristo_Piyankov, [email protected], Chief Data Officer).
2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.
REINNO is a financial technology company offering a new solution for lending and real estate tokenization with a focus on providing liquidity. Our services cover the technology, corporate structure, legal compliance and marketability of tokenized real estate assets. We are positioned to be the first company to accept tokenized real estate as loan collateral. Our proven expertise in lending and financial services allowed us to realize this tremendous opportunity. Lending using tokenized real estate as collateral provides much higher flexibility, simplifies the application process and reduces costs for end customers.
REINNO is a turnkey solution for anyone who wants to tokenize real estate and who is matching our eligibility criteria. Through our offerings, property owners obtain new ways of both replacing their existing bank mortgage and borrowing against their equity in a property. Using digital tokens as loan collateral allows for greater liquidity and cheaper funding, benefiting the end customer. In effect, by tokenizing their assets users can trade real estate in fractions with higher liquidity and lower costs. REINNO’s ultimate goal is to build the first truly international real estate tokenization platform, which will provide the full spectrum of blockchain-based financial services for consumers worldwide.
REINNO is the company behind the very new Tokenized Instant Lending (TIL) concept for real estate. This new approach is possible because of the blockchain technology that underpins it and the rising security tokens popularity.
TIL is making real estate associated loans (mortgage, HELOC and home equity loans) efficient, fast, flexible and with no need to foreclose. Using tokenized real estate as collateral allows us to tremendously improve the way these loans work today. REINNO combines the benefits that you could have from having a mortgage, a HELOC or a home equity loan and bundles them in one product adding even more benefits. Usually a mortgage blocks the entire property, making it hard for the owner to sell any equity from it. Even if they have already repaid $4,900,000 of a $5,000,000 mortgage, the entire asset is blocked by the bank.
However, by using tokens (fractional digital ownership) borrowers are able to take out an instant loan backed by just a fraction of the real estate value. This way, only the tokens used as collateral are being blocked; the rest of the equity remains free and can be accessed for additional funding or sold as needed. Moreover, when a portion of principal is repaid, the borrower receives an equity equivalent back. The more principal is repaid, the more tokens are freed from the collateral. Furthermore, if two people are holding tokens that represent the same property, a loan taken by one person will not affect the tokens (or ownership) of the other in any way.
REINNO will bundle multiple tokens representing tokenized real estate into a single REINNO token, which in turn will be used as collateral for obtaining DAI.
REINNO tokenizations to date:
- Collateral: US-based commercial real estate
- Total value tokenized : $355,137,266
- Completed deals: 8
- Deals in the pipeline: 9
3. Provide a brief history of the project.
The idea for REINNO was born in December 2018 when Viktor Viktorov, it’s CEO, was working on another project related to cryptocurrencies. He saw the potential that tokenization had in the real estate space and decided to start a new company. Since then, REINNO has reached many important milestones.
The company completed its first tokenization of a commercial real estate fund worth $105.5 mln in January 2020. It also created a unique legal and technical structure that allows REINNO to streamline the tokenization process. Since then, it tokenized a total of eight projects worth over $355 mln. All of them include income-producing properties located in the U.S., including residential, retail, healthcare and industrial real estate.
REINNO launched the demo version of its lending platform in August 2019. The company created a proprietary lending model that accounts for the risks associated with both real estate and digital tokens. Currently, REINNO is in the negotiations with a bank that will originate the loans.
The company also built a marketplace where investors from all over the world can invest in tokenized real estate. With the recent amendments from SEC allowing investors with certain professional knowledge, experience or certification to qualify as accredited, even more people can participate in the offerings.
Other achievements include winning Startup World Cup regionals (2020 edition; the finale was postponed due to the COVID-19 complications), appearing as experts in industry-specific publications and media (e.g. Decrypt, Value.Tokenized), and building a strong team. REINNO brings together experts in commercial real estate, fintech, IT, law and business growth. It also has a global tea of sales people around the world - from the USA and UK to Nigeria and Russia.
4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.
Examples of tokens issued by REINNO:
5. Link any available audits of the project. Both procedural and smart contract focused audits.
Not available at the moment.
7. How is the applying collateral type currently used?
For the time being, REINNO tokenizes individual commercial real estate locations and real estate portfolios, and issues their own individual security tokens which represent fractional ownership of the building or portfolio (and the underlying cash flows).
As part of the integration with Maker, REINNO will issue a single REINNO token (not yet existing) which will bundle multiple tokenized real estate assets. The token itself will be a stablecoin with a fixed price of one USD and it will essentially function the exact same way as multi-collateral DAI does. Subsequently, this token will be used as collateral in order to produce DAI. The reason for the second step is to provide liquidity to the REINNO token in order to disburse loans to the projects which lock their security tokens in the REINNO contract.
8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?
WE as Reinno Tokenization LLC or Reinno Property Management LLC, USA, Delaware
9. Where does exchange for the asset occur?
Currently, the REINNO token is non-existent. The security tokens produced by REINNO as a result of commercial real estate tokenization will shortly be available for sale on REINNO’s marketplace and subsequently on REINNO’s secondary market (still in development).
Even after the REINNO token is created, it will not be made available for trading on any exchange, since its only function will be to bundle multiple security tokens and obtain a loan against them. As such the liquidation sequence will be:
- Obtain REINNO token in exchange for DAI (at a discount)
- Obtain a security token in liquidation in exchange for REINNO token (at a discount)
- Sell the security token on REINNO’s secondary market (or any other marker where it is listed) OR hold the token and benefit from % of its cashflows.
10. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.
11. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.
12. (Optional) List any possible oracle data sources for the proposed Collateral type.
REINNO will perform regular audits and re-appraisals of any real estate which is subject to tokenization and subsequently loan disbursement.
13. (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type
REINNO will act as a liquidator both for the REINNO/DAI contract and for the REINNO/(tokenized real estate) contract.