Pledgecamp Usecases: Evaluating the potential of Pledgecamp to emerge as a Decentralized Escrow for real estate globally
Real estate is one of the most rewarding, and perhaps the most-widely preferred asset amongst all other asset classes. However, in recent years this sector has been plagued by unending controversies originating from scams, delayed payment dues, builder bankruptcy etc. Take India’s real estate crisis for example, several of the renowned builders like Amrapali Infrastructure, Jaypee Infratech have filed for bankruptcy depriving investors of their promised dream homes. Not only have the investors lost their chance for possession of their homes, they have also been deprived of their capital which could have otherwise been used to buy their dream homes somewhere else or they could have invested it somewhere else.
In this article, I’ll seek to evaluate the possibility of Pledgecamp to emerge out as a decentralized escrow for real estate.
Consider a case, a builder(creator) proposes to construct a building and requires funds in the tune of a million dollars. He onboards the Pledgecamp platform, puts out a construction proposal towards the community(crowd) in regards as to why this building is a good investment opportunity; simply put how it will be providing it’s investors(backers) with a good return on investment (ROI) by the time of project completion. The builder would provide factors like prime-location, upcoming rail corridor, opening of a big mall in the neighborhood etc. to prove that it is indeed a decent investment oppurtunity. Backers judge this proposal based on the information provided by the creator and evaluate the prospects for themselves. After evaluating the proposal, they decide to fund this construction campaign. In the present example, let’s assume that builder needs one million dollars to complete this construction. But he needs atleast four hundred thousand dollars to start the construction. He is willing to come for funds later when he achieves the contractual milestones. Of this one million dollar, a portion say 60% of the funds are kept in backer insurance which essentially acts as escrow and is empowered with smart-contracts. These 60% funds will only be released when corresponding milestones are met.
The creator starts the construction, let’s assume the milestones for initial funding are met, the builder then shows these developments to the community which acts as an evidence for community to judge. The community judges and votes. If 51% of the voters feel like the builder has lived up to his promises, they vote in favor to release next tranche of the funds e.g. 1/3rd of the funds from backer insurance i.e. 200k $ in present context . The builder uses this tranche to fund further development. This process repeats till all the milestones are met, and in the end users are given the possessions of tokenized real estate. If in between any of these milestones voters feel that the builder is not living up to his promises then they can vote to stop the further funding of project.
Pledgecamp can offer anyone in this world to own a property anywhere in the world. Tokenization of real estate is one of the most talked usecases of blockchain in present day and we might see it enforced on pledgecoin platform when proper regulations are put in to place.
Final Thoughts
To conclude, Issues in real estate are complex and global, they aren’t limited regionally; escrow definitely adds an extra layer of protection for investors. The functionality of backer insurance to act as a decentralized escrow presents us with an exciting usecase of Pledgecamp emerging out as a platform for global real estate business we all should be looking forward to..
NOTE: Please do not construe this article in any way as investment advice. PLG tokens are utilty tokens, they are meant to be utilized. Speculation on it can/cannot incur financial losses. It is my sincere request and advice that you do your own research and evaluate it on a personal basis.
Important Links
Amrapali to file for bankruptcy
Jaypee insolvency case: Lead lender IDBI seeks deadline extension
