How to Buy Real Estate using Blockchain: A Max Crowdfund Progress Report

real estate

Sometimes it’s great to look back at the past. The peak of the ICO era was in full swing in 2017-2018, and all those projects, which collected a lot of money, had enough time to develop everything they ever wanted to. But did they achieve their goals? In this article we’re going to look at Max Crowdfund, formerly Dominium, and compare today’s reality with their pre-sales roadmap.

Max Crowdfund is a platform aimed at solving many problems plaguing the current real estate market, such as: 

  • Real estate funds management: creating funds, buying and selling the security tokens of these funds, and giving investors an opportunity to invest in real estate without the ups and downs of the actual purchase. The platform simplifies gathering all the documents necessary to comply with the local laws.
  • Marketplace for properties: giving useful tools to retail investors for listing properties, connecting buyers and sellers for deals, and recording all these on the blockchain.

The project first surfaced in 2018, during the harsh bear market. After an astonishing rise, blockchain assets had to cool down and many projects simply didn’t make it through – approximately 1,000 projects died in 2018. There were, of course, various reasons for this, but the main one was probably the lack of will and poor management skills. Max Crowdfund not only had managed to survive, but it also had to continue to develop its product for the real estate market, which is estimated to be valued at more than $200 trillion.

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At that time, it wasn’t simple to even raise funds. With Bitcoin and other crypto prices constantly falling, the sentiment was as negative as possible. In his AMA, the head of the development at Max Crowdfund, Erwin Van Kekem, described the timing of the fundraising event as “terrible”. Even in these conditions, they managed to collect the necessary funding; 20 million tokens were sold during the pre-ITO (Initial Token Offering) and the first phase of the ITO. In total, €500,000 (~$560,000) were raised.

What they’ve been up to since 2018

The development of the platform started in Q1 2018, right after the first private seed round. They chose the Ardor blockchain as the main protocol due to its scalability to suit all needs of a high-load platform. Ardor is different from Ethereum or EOS. First, it’s Proof-of-Stake. Ardor can handle the load of 100 transactions per second or maybe even more, and the speed is crucial here. If the navigation isn’t smooth, the users can leave for a more traditional alternative. It’s a competitive place. And Ardor is a lot more decentralized than EOS. It’s not relying on a few nodes to keep an important database and hoping that they won’t do anything bad with it. 

For Max Crowdfund to be developed on Ardor, it was necessary to sign an agreement with Jelurida, the company developing this blockchain. Right after signing the agreement, having completed an ITO and the technology stack set, Max Crowdfund went deep into further development.

At the same time, Max Property Group continued to launch additional property funds to continue to allow “smaller” investors to invest in real estate. All of the raised funds are used to buy real estate properties in the Netherlands, Germany, and the United Kingdom and the rental income from these properties is paid back to the investors through a fixed interest.

By the end of 2018, the number of registered users exceeded 70,000, and it continues to grow today. 

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What’s next?

Meanwhile, Max Crowdfund has a lot of plans for 2019. They have launched their Max Property Group blockchain with the MPG token, a “childchain” on Ardor, and they are already offering the option to invest directly in property funds on the platform. 

Now the roadmap includes:

  • Adding automated KYC by integration Sum & Substance (Completed)
  • An option to add new property funds (security tokens) to the MPG blockchain 
  • An option to purchase and transfer assets on the blockchain 
  • Allow third-party fundraisers to create assets on Max Crowdfund
  • Allow third-party selling (transfer) of properties on the platform
  • Implement lightweight Ardor contracts to add renting out property
  • Community management support (Property Owners Associations access) 
  • License from Dutch finance authorities (AFM) allowing investments in bonds and equity
  • Allow the issuance of property bonds and property equity assets, including asset control (restrictions apply depending on jurisdictions and regulations)
  • “EU-Passport” the license from the Dutch finance authorities (AFM) to Germany and the United Kingdom
  • International real estate agents support (listing of properties, including selling and renting out of property)
  • EU-Passport license from the Dutch finance authorities to other EU countries
  • International property management services support, including periodic maintenance and repairs support ticket system
  • Continue to EU-passport Dutch license to other EU countries
  • Import and register properties from the national land registries, such as the Netherlands, Germany, and the United Kingdom
  • Full support for trading assets (restrictions apply depending on jurisdictions and regulations)

The roadmap is still fairly complex and there’s a lot of groundwork left to do, such as working with regulators, adding new features, and, most importantly, attracting new users. Max Crowdfund targets both Eastern and Western markets, aiming to become a global platform for buying, selling, renting, and investing in property. According to Erwin Van Kekem, it will be possible to trade assets for assets; for example, to flip a house in California for two houses in Iowa. They already have a platform with functional features, but a large role in their roadmap is dedicated to user acquisition.

The MPG token 

The MPG token is a utility token that is designed to be the means of payment for all actions on the platform, such as:

  • the creation of new assets 
  • trading of assets 
  • creation of support tickets 
  • voting for various charities 
  • listing your property for sale or rent 
  • registering a rental agreement 
  • registering a purchase deal;
  • and registering property management actions (i.e. maintenance) 

All fees are charged in MPG, but they can cost a different amount of tokens because they are calculated in Euro to ensure they remain relatively low.

The total supply of MPG will be 1,000,000,000 (one billion) tokens, although they are already burning tokens. It’s already listed on CoinMarketCap and on various exchanges, such as STEX, P2PB2B, Sistemkoin. Max Crowdfund plans on conducting Phase II of their ITO in 2019 to raise additional funds and distribute more tokens among users. They will use these new funds to purchase more properties and secure a steady income for the future.

real estate

When all tokens are sold, and after the full-scale launch of the platform, all MPG tokens received as fees will be burned automatically to decrease the circulating supply of the token and raise the value of the remaining ones. Recently, they already burned 40,000 MPG tokens, equal to $1,000,000 and we have just been told that an additional burn of 176,000,000 MPG is planned for 2019 too.

One point we like a lot is that Max Property Group doesn’t allow its token to be manipulated by fake trading volume. By taking action over such activity, token’s trading volume dropped significantly since June, but at least we know that it is real.

Another point that needs to be raised is their dedication to transparency. They asked an expert to analyze all MPG wallets on the Ardor network and make a top 500 “Rich List” where the addresses have been identified and named accordingly. In this way, anyone can see exactly who owns what.

Conclusion

As we can see, in order to win the race, it’s not that important to be very fast, it’s important to be steady and endure. During the early years, the blockchain market was easy to enter because almost every project could get the necessary funding. Thus, the industry attracted many first-time startup entrepreneurs. When you get easy money for your experiments, it’s not that hard to get frivolous with them.

Before asking for funds, Max Property Group was an already established real estate business, so it had a deep understanding of what is necessary for the project to survive, how it must be funded, and what the real expenses are. Also, they proved knowledgeable of the cryptocurrency world. They didn’t store the raised money in ETH, which decreased in value. They converted it instead to pay for the development of the project. Once they start investing in property to receive rental income, they will secure a steady income stream too. With this approach, it’s possible to maintain the operations and development for years without any trouble. 

Due to economic understanding and perseverance, Max Property Group worked and collected funds in the middle of the bear market when everyone considered blockchain dead. Yet they managed to continue developing the platform and rolling out new releases. That’s what we call dedication. And dedication is the sign of a great project!

All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice.

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