FAQ (Real Estate Tokens)
What is the difference between Real Estate Tokens (RET) and KNIGHT tokens?
RET are specific to their property and represent the right to buyout all other RET holders to redeem the underlying title deed while the KNIGHT token is the CitaDAO governance token. Each successful Real Estate Listing will produce new and unique RET, not KNIGHT tokens.
For example, a successfully tokenized Bank building would mint ERC20 fractions in the form of RET1. A successfully tokenized Shopping Mall would mint ERC20 fractions in the form of RET2. RET1 and RET2 are both a form of RET but are unique to each other and hence, they differ in value.
RET can be used to provide liquidity in liquidity pools and earn KNIGHT tokens as rewards.
How can I get RET?
There are 2 methods to attain RET:
Participating in an Introducing Real Estate On-chain (IRO) - RET will be distributed upon a successful IRO to the IRO participants proportional to the amount committed in the IRO.
Swapping on a DEX - If you missed out on the IRO, you can swap USDC for RET anytime on the Uniswap DEX.
How do I farm yield with RET?
There are a couple of ways in which RET can generate yield:
Liquidity Mining by staking RET-USDC pairs into liquidity pools. Liquidity miners will be rewarded with KNIGHT Tokens.
Capital Appreciation of the underlying Real Estate asset raises the floor price of the RET.
Can I buy/sell RET after the IRO?
Yes. RET is ERC20 Tokens that can be swapped anytime after the IRO on AMMs such as Uniswap. Liquidity pools consisting of RET-USDC pairs will be set up and Liquidity Providers will be incentivized with KNIGHT Tokens as a reward for providing liquidity.
How will RET maintain their value?
RET holders have the right to buyout all other RET holders to redeem the title deed to the underlying real estate. Like traditional Real Estate, RET are a natural inflation hedge and can protect the RET holder against inflation.
Additionally, RET are more decentralized than Stablecoins. Most Stablecoins are backed by fiat currency held in bank accounts that are centralized in nature. In comparison, the Real Estate collateral of the Special Purpose Vehicle (SPV) that issues the RET are held by unique individual SPVs all over the world ; hence, it is more decentralized.
Finally, Real Estate typically generates better yields than currencies held in bank accounts as rental fees are typically rebased due to inflation, adding to the RET value over time.
As a RET holder, what rights over the property do I have? Do I participate in other processes like tenant policies or day-to-day issues?
Yes and no. Fundamentally, the RET are designed to only have the right to buyout all other RET holders to claim the underlying title deed. Real Estate management is a very resource-intensive process and it does not make sense to put every small decision to a community vote.
For example, if someone slips and falls on-site and needs immediate medical attention, it would be a nightmare to put up a community vote whether to call an ambulance to bring them to the hospital or bring them to the nearest clinic. Likewise, it wouldn't make sense for the community to vote on routine issues like which plumber to contract.
Instead, for day-to-day operations, an experienced independent Real Estate firm such as JLL, Knight Frank, CBRE, etc. will be engaged to resolve all issues and matters including tenant disputes. If the property manager is not performing, they will be replaced.
Are RET the same for every property?
Every property will have a different RET and these RET are not interchangeable between IROs.
For example, a successfully tokenized Bank building would mint ERC20 fractions in the form of RET1. A successfully tokenized Shopping Mall would mint ERC20 fractions in the form of RET2. RET1 and RET2 are both a form of RET but are unique to each other and hence, they differ in value.
Upon a successful IRO, a separate NFT (ERC721) will be minted and deposited into a smart contract which will distribute the RET (ERC20) to the IRO participants. The RET of IRO1 will be different from the RET of IRO2.
Different RET will have different values depending on their underlying property and may have different rates of earning KNIGHT Tokens.
What happens if the value of the underlying property decreases?
In the event that this occurs, the floor price of the RET will decrease as well and will likely have a negative effect on the price. However, it is important to keep in mind that the demand for RET will benefit from the use cases afforded from the DeFi ecosystem and those outlined in the Primitives section.
Do RET have a vesting period?
RET do not have a vesting schedule. The tokens will be fully unlocked and claimable after an IRO is completed successfully.
How are RET different from REITs?
Refer to the infographic below.
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