Summary: There has been a growing trend towards real-world assets in the blockchain and DeFi space. Unlike speculative tokens or cryptocurrencies, RWAs represent value or assets from traditional finance, including bonds, credit, and commodities. Parcl is breaking into this space by bringing the 258-trillion-dollar real estate industry to Solana and might be rewarding early users with ...
There has been a growing trend towards real-world assets in the blockchain and DeFi space. Unlike speculative tokens or cryptocurrencies, RWAs represent value or assets from traditional finance, including bonds, credit, and commodities. Parcl is breaking into this space by bringing the 258-trillion-dollar real estate industry to Solana and might be rewarding early users with an airdrop soon.
Real estate is one of the hardest asset classes for the average investor to gain exposure in. Though there are REITs, Real Estate Investment Trusts, that trade on the stock market, the barrier to entry and the lack of granularity in investments often leave individual investors at a disadvantage. Parcl, leveraging its Parcl Labs Price Feed, can tokenize real assets assets on the Solana blockchain. Parcl allows anyone to long or short different city residential real estate markets across the globe, from Hong Kong to New York City, by buying real estate in chunks representing the average price of one square foot.
Before Parcl, the best index for estimating real estate pricing was the Case Shiller index. However, as pointed out in Parcl’s whitepaper, there are several issues with this current model that the Parcl Labs Price Feed solves. For example, the Case Shiller has at least a 2-month delay in pricing information and does not have full inclusion of all property types. PLPF, on the other hand, updates daily and includes all property types with support to scope to different regions and sizes, from city to country. It uses 5,000 different data sources to create an accurate account of sales, valuations, and ownership. This data can be accessed through Parcl’s on-chain oracle, allowing anyone to use this data in their decentralized applications and build on top of real estate markets in a way that has never before been possible.
There are two ways to interact with the Parcl app: as a real estate speculator or as a liquidity provider. Speculators can long or short numerous markets worldwide and buy tokens representing the current value of a square foot of residential real estate there. The riskiest traders can go up to 10x leverage on these trades. On the other side of these trades are liquidity providers, who act as the exclusive market maker for the platform and take the opposite side of every user trade. In exchange, they collect 80% of the protocol’s fees.
At the time of writing, Parcl has around $50 million in total value locked on the protocol. Like with any new protocol these days, they are in the midst of a points rewards program, offering points that will later be turned into Parcl tokens. LPs are given 4 points per dollar per hour, whereas users with open positions earn 2 points per dollar per hour. To earn an extra 5% lifetime points boost, anyone can enter the code ‘bpparcel’ on the website. The points program is currently in season two, and there are expected to be three seasons total, so there is still time to accumulate a significant share of future tokens. To boost token generation even further, users can buy the Parcl HOA NFT collection, which currently costs around $1500 but gives users an extra 20% points boost.
Parcl operates in a unique niche: not only is it bringing RWAs on chain, but it is also doing so in a unique, value-additive way that improves upon existing infrastructure. Parcl’s unique mix of accurate price feeds and decentralized finance makes it a great way to gain exposure to real estate for numerous reasons, such as hedging against your city of residence’s rent increasing, betting on emerging markets, or predicting the downfall of cities plagued with controversies. Only time will tell if Parcl’s price feeds are accurate and points become valuable, but they seem to be doing everything right so far.
By Lincoln Murr