B4Real White Paper

The Market

As this is a technical outline of the mechanisms and functions of the B4Real platform, it is not intended to conduct an exhaustive analysis of the state of the crypto market, nor that of the Australian and/or global real estate markets.
However, in order to fully conceptualise the mechanisms and relationships by which the platform (and the network which it both creates and relies on) intends to function, it is important to understand who the key stakeholders are, and how it is intended to utilise their support in order to achieve a self-sustaining critical mass of users within a short period.
The B4Real platform’s position as a project managed by Black Tie Digital, itself fully owned by Progressive Investment Management (PIM), allows significant leveraging of extant commercial networks.
For context, PIM has already concluded over 5,500 property transactions during the 24 months prior to the publication of the first version of this document (Jan 2022), over half of which were conducted using digital currencies as a percentage of payment and/or deposit.
This puts the B4Real platform in the unique position of establishing a novel market niche while already having experience within that niche.
These transactions were to a large degree enabled by PIM’s long history of relationships with property developers.
There are over 200 such firms in Australia that have conducted business using PIM’s services, which provides an extremely attractive market for the B4RE seed round sales.
As of January 2022, B4Real had only approached four property development firms.
However, these companies have agreed to list a total of 25,000 units of stock (land and/or property) per annum on the B4Real platform to start, which ensures that the marketplace will be by far the most liquid of its kind globally.
As global entities, these firms also have their own significant lists of clients who are based overseas from Australia and are looking to invest in the local real estate market by leveraging their crypto holdings, thus providing an immediate influx of accompanying buyers.
B4Real has also secured a strategic partnership with a network of over 400 affiliated real estate agents across the east coast of Australia and Western Australia.
As B4Real represents an exclusive access portal to a highly motivated international market of property purchasers, this network provides the essential bridge between developers and buyers, while also contributing to available stock.
It is additionally projected that the on-flowing network effects should quickly contribute to achieving a high level of visibility in the real estate sector, further solidifying the platform’s utility.
Lastly, the lending and finance platform is funded by lending partners.
While this division of the platform has been spun off as B4Finance, a platform independent of (but still supporting) B4Real, the high levels of liquidity required necessitate established and continued close relationships with established credit providers.
In turn, B4Real’s expertise within these regulated and monitored sectors can be leveraged by said partners to expand their audience and revenue bases.
Through B4Finance, our partnership with Pegasus and access to a highly liquid and unleveraged private capital provider in Orion creates a uniquely regulated and secured platform that has been established for liquidity provision.
Where many other lending platforms rely on rehypothecation or recollateralisation to provide lending liquidity, the B4Real platform allows for secured lending from a registered entity that holds all collateralised funds in insured cold-storage custody, providing far greater asset security.
In addition, the dual-sided nature of the B4Real marketplace will allow for the collateralisation of loans using both the initial deposit and the property itself, meaning that lenders can offer more attractive LTV ratios than most crypto lending platforms.
In accordance with both national and international regulatory and enforcement frameworks, B4Real’s licensing status and ongoing partnerships with financial service providers will also allow for the creation of payment and wealth management rails within the extant banking network, removing further barriers to the entry of foreign capital.
At the time of first writing in late January 2022, the total crypto market cap is approximately $1.7 trillion dollars USD - a staggering sum for a novel asset class, and particularly impressive considering the 37% total value loss the market has suffered in the past five weeks.
This sum represents an unprecedented generation and redistribution of wealth, and even in the current bear market, presents an unmatched opportunity for a platform such as B4Real.
Indeed, a downward trend may well encourage holders of newly-acquired digital wealth to diversify into other asset classes, such as property.
Given the encouraging data presented by the recent YouGov-operated survey of Australian attitudes towards the cryptocurrency industry and the real estate market, as well as the historical attraction of Australian property to overseas investors, it is anticipated that the B4Real platform may be in the right place, at the right time.
It must also be noted that the crypto industry, in the manner of many emergent and disruptive industries, can from certain perspectives be seen to be rather insular to outside or traditional perspectives, optimistic about its projected growth paths and adoption rates, and somewhat self-referential when assessing the viability and use cases of its various projects.
While DeFi represents an incredible and admirable leap forward in the way finance can be conducted, the bull years of 2017 and again in 2021 saw a proliferation of projects with no real use case - speculative assets in every way.
The investing environment can be likened to the early 2000s when the spread of the Internet promised to revolutionise the way we lived our lives.
While this was true, the so-called ‘dot-com boom’ saw the rise and fall of a plethora of e- companies with either no use cases or no development and implementation methodologies - and alongside this, the associated creation and losses of immense fortunes.
In the end, platforms with real-world applications, and tangible impacts on the lives and choices of consumers, were the ones to survive and thrive.
The B4Real team believes that the time for the emergence of the equivalent platforms in the DLT-enabled environment of Web 3.0 is now.