On-chain Index Tokens allow individuals to ape into Real Estate without having to decide which Real Estate Token (RET) to own. These index funds behave similarly to REITs and ETFs in traditional finance, deploying the digital asset received towards RET to form an index. For example,
- An individual wishes to gain exposure in the retail space.
- Index Tokens (SHOP) owns RET for retail assets A, B, and C.
- The individual buys SHOP tokens and gains immediate exposure to all 3 assets.
This enables individuals to ape into a pre-selected basket of RET, which reduces individual property risk, saves gas fees, and may result in better diversification and performance.
The structure of a DAO enables many people to collaborate and pool funds – like ConstitutionDAO. This enables individuals to pool money for whatever purpose they deem fit, like raising funds to buy historic buildings to introduce on-chain.
Having Real Estate on-chain enables derivatives like futures and options for Real Estate, enabling RET holders to increase their RET yields, hedge against downside risk or ape into upside potentials with outsized rewards.