History Is Made: Propy Completes First Ever Real Estate Property Sale Via NFT

A couple of weeks ago I was asking people to Buy My House. I first bought the property, located in Kiev, Ukraine, in 2017. That was exciting. I paid ETH for the property (about $60k at the time) and title transferred via Propy on a blockchain, all approved by the Ukrainian government. Never before had real estate officially changed hands via a blockchain. Ethereum founder Vitalik Buterin was even gracious enough to be included in a picture when we physically transferred the (physical) keys to apartment.

Fast forward to this year. Moving title to real estate on a blockchain is now common – Propy has facilitated title transfer on more than 1,000 properties via the Ethereum blockchain. Those transactions represent over $1b in total dollar value.

But all those real estate sales still usually use the old method of buying and selling a home – the hiring of real estate agents and all of the agreements that go with it.

That process isn’t going anywhere for now. But one thing is going to change – we believe more and more real property, including real estate, will begin to have a digital representation on a blockchain via a NFT. And a legal framework has now been created such that when the NFT is sold to someone new, rights to the real property go with it.

Last week, on June 9, the Propy auction for the Kiev property NFT was completed on Seen.haus. The NFT was transferred to its new owner. That person, who has agreed to be named – is San Francisco based engineer Devon Bernard. Here’s the NFT:

The final price was 36 ETH – about $93,000. So I made a little profit on the house, although with all the upgrades and finishing I think Devon got it for a steal. No word from him on whether or not he’s going to live in it, rent it out, or sell it. I look forward to seeing what he does with the place!

For press coverage of the event, see my original blog post. Congratulations to Propy for changing the world again. Based on the number of people who’ve reached out to learn how to sell their own properties via NFTs with Propy, I’m quite sure we’ll see many more sales like this in the near future.

Propy blog post on the auction closing is here.

UPDATE: The new owner Devon shares his plans for the property.

Announcing The Arrington ALGO Growth Fund

We are big fans of Algorand. We first invested in their private rounds years ago and have accumulated additional ALGO since. And over the years we have stayed close to founder (and Turing Award recipient) Silivo Micali, CEO Steve Kokinos, COO Sean Ford and VP Marketing Keli Callaghan. This is one of the best all around teams in crypto. Professional, zero hype, all signal.

In 2019 we published a research report on the Algorand product and burgeoning ecosystem, titled The Monetary Experiment: Algorand. In that report, we outlined how we see Algorand, and gave a glimpse of what the project could become with hard work and just a little luck. They have exceeded our expectations, and have grown in ways we did not foresee (it’s time to update that research).

Today I’m happy to announce that we are partnering with Algorand for the long term. We are launching a dedicated $100 million fund to invest in the Algorand ecosystem and other promising crypto products. The fund is called the Arrington ALGO Growth Fund and will begin deploying capital soon.

You can read the news on this:

Coindesk: Arrington Capital Launches $100M Algorand Ecosystem Fund

The Press Release

CoinTelegraph: Arrington Capital to back Algorand projects with $100M growth fund

We now run two publicly announced funds – Arrington XRP Capital and Arrington Algo Growth Fund. Arrington XRP Capital was formed in 2017. We continue to grow and manage that fund, and work with the dozens of companies and protocols that we have funded along the way. Now we will also manage this new ALGO fund, and I’m quite sure that in a few years time, I will be able to say the same things about this fund – amazing things will come from our investments in founders.

Thinking back to those days, none of us really had any idea of the roller coaster ride we were on. Crypto has its ups and downs, but the amount of founder passion for building, deploying and growing new infrastructure and apps is sort of stunning. And that’s coming from someone who’s been building and investing in Silicon Valley since the mid 90s. Crypto moves faster, a lot faster, than the old tech world. Things you learn become redundant almost before you’ve mastered them. I consider that a feature, not a bug.

It’s survival of the fittest, and ALGO, along with XRP, have proven that they are here to stay. I don’t know exactly what’s coming next, but I feel comfortable that ALGO will be a big part of it. Thank you, Algorand, for choosing us to be your partners.

Here’s to the Pirates. Here’s to ALGO. Let’s build.

Buy My House

In 2017 I bought a condo apartment in Kiev, Ukraine. This wasn’t a normal purchase – I used the then-nascent Propy protocol to make the purchase and have the property title recorded, for the first time ever, to a blockchain. I also paid for the condo in Ether. These days, property title transfers on Propy are an everyday occurrence. The Wall Street Journal, Newsweek and others covered the news.

Today Propy announced a new first – that same home, which is owned by a U.S. domiciled LLC, is being auctioned and sold as a NFT. The auction begins on June 8, 2021 (a couple of weeks from now).

The auction information page is here.

TechCrunch: Blockchain startup Propy plans first-ever auction of a real apartment as a collectible NFT

Coindesk: TechCrunch Founder’s Apartment to Be Sold as NFT

This isn’t a gimmick – but it is a proof of concept. Ownership of the NFT will allow that owner to claim ownership of the property via the LLC.

Why is this interesting? This NFT, backed by real world property, has value. NFTs are already being inserted into DeFi protocols, allowing, for example, people to borrow against the value of the NFT. In the real world, we can use mortgages. They take months, require the approval of a middleman, and are extremely difficult to get in some countries, particularly if you aren’t a resident of that country. With DeFi, none of that matters.

From the Coindesk article: “We are increasingly excited about the role of NFTs in DeFi,” Arrington said. “With homes and really anything in the real world being tokenized, you can plug that physical item into DeFi, assuming the legal niceties are ironed out, and that’s fascinating.”

I made similar comments to TechCrunch:

Arrington added: “Coming at this from a crypto angle, we’ve seen what happens how DeFi gets plugged into credit markets. If I have an NFT or any DeFi asset I can then borrow against it, without a middleman. Right now, if I have a real piece of real estate, there is no way for me to borrow against it, without a middleman, because I have to go through a bank and get a mortgage or whatever. And it’s also the friction, all of the costs in terms of speed and how long it takes.

“If we can find a way to plug real estate and other real-world assets into DeFi, I think that the amount of credit that can be created around that is in the trillions, eventually. And so I think that has to happen. The questions around this are legal and regulatory… The legal stuff around this is tough, and so Propy has done a lot of work with that. But if they do, I think that the idea of an NFT representation of a real-world asset purely from the point of view of ease of trade and ease of access to credit markets is a big idea.”

If you are interested in participating, details are here.

Arrington XRP Capital Joins The DeFi Alliance

We are proud to announce Arrington XRP Capital has joined the DeFi Alliance. The DeFi Alliance is an incubator launched by a notable group of Chicago-based trading firms in early 2020, including CMT Digital, Volt Capital, Jump Capital, and DRW.

Today, the Alliance has evolved into the primary hub for DeFi startup incubation and mentoring. When I founded TechCrunch, I witnessed first hand the rapid rise and popularity of Y Combinator, and the immense value that these kinds of organizations provide to startups. We hope the DeFi Alliance grows to have a similar impact.

At Arrington XRP Capital, we have been investing behind the scenes with projects in the DeFi Alliance program, and welcome the Alliance’s support as our portfolio companies go to market. Stay tuned.

Blockfi, A Crypto Bank, Announces New Financing.

We’ve long been fans of crypto lending; we’ve made investments in two companies over the last two years, and are active in both borrowing and lending cryptocurrencies. We’ve now also invested in Blockfi, and this is our first equity investment in what is essentially a nascent, and regulated, crypto bank. Blockfi has been added to our portfolio page.

The round was announced late last week: $30 million raised in a Series B, following $18m in a Series A last year. Besides Arrington XRP Capital, investors in the round include Morgan Creek Digital, PJC, Akuna Capital, CMT Digital, Winklevoss Capital, Avon Ventures, Castle Island Ventures, Purple Arch Ventures, Kenetic Capital, Arrington XRP Capital and HashKey Capital.

The company is absolutely killing it, even in the largely moribund crypto markets over the last two years. Revenue is up 20x over the last year, and deposits grew from $250m in August 2019 to $650m today.

These guys are winning. Very happy to join their team!

See more coverage: Coindesk, Bloomberg, CoinTelegraph and The Block.

Notes On Upcoming Skale Token Sale On ConsenSys Activate

News broke this morning that our portfolio company Skale will partner with ConsynSys’ Activate platform to sell tokens via a dutch auction.

Importantly, purchasers will be required to stake purchased tokens, which should discourage participation from pure speculators hoping to flip tokens for an immediate profit.

Read more about the news on Decrypt, Coindesk, CoinTelegraph, The Block, FinanceMagnates, VentureBeat, Kyle Samani and Spencer Noon.

Read our previous post on Skale here.

Crypto Wars: A New Hope

Nakamoto.com, a new initiative founded by crypto investor and entrepreneur Balaji Srinivasan, launched quietly last Friday evening. There was no initial press coverage, just a series of tweets to announce the purpose of the new website and link to some of the initial posts.

.A battle quickly erupted on Crypto Twitter about the use of the Satoshi name for a website that includes authors that are not approved by the high priests of the bitcoin fundamentalist sect.

Regardless, Balaji’s initial post was a rallying cry for the future of crypto, and Bitcoin’s rightful place as the flag of a new wave of technology.

I think this is a much needed resource to help heal some of the senseless fighting in crypto today. Many outsiders see a lot of chaos in crypto, insane infighting that appears meaningless to newcomers but quickly demands that someone take a side. Pro BTC or anti-BTC (just saying “Pro-Bitcoin leads many to ask “WHAT Bitcoin do you mean!!!). Pro this alt coin or that one.

Healthy debates are wonderful and happen every day in crypto. But unhealthy debates, spectacularly dramatic, drown out the good conversations. Nakamoto appears to be an effort to bring together the more reasonable people in crypto to celebrate what’s good about the technology.

“That’s why we’re launching Nakamoto. We want to create a venue for quality technical, philosophical, and cultural writing that is of general interest to the crypto community as a whole, for beginner and expert alike.”

I’m a contributing writer to the site. My first post is titled It Will Take Years for Smart People to Understand Cryptocurrencies. You can read it here.

Anyone can write for the site. There is more information about contributing here.

Ethereum-Friendly Skale Raises Pile Of Money

Arrington XRP Capital participated in the just announced Skale funding round – some $17.1 million in total. You can read the details, soundbites and thoughtful quotes on the news sites. Here’s CoinDesk and TheBlock.

Yes, I’m a little salty today. I flew home last night on a redeye flight from New York. In coach. I was supposed to write about Skale at a designated time that coincided, I believe, with the exact moment on the flight where I, shuddering from cold, purchased two $5 blankets that I was told I was free to keep. When did we start having to buy blankets on flights? Will they install a credit card reader on the toilets next?

I’m convinced those bastard on Jet Blue turned the temperature down just to sell more blankets.

Anyway, I’ve had a solid 2 and a half hours of sleep now and I want to use my cheerfulness to explain why I think Skale is going to make us enough of a return that I will never, ever, have to fly coach again.

There are two reason. First, Skale has the best team I’ve ever seen. With the possible exception of any other founders I’ve invested in that happen to be reading this post, Skale has without a doubt the finest crypto team in the business. (I joke, but I’m serious. We invest in teams first, products second. It works).

Second, Skale can fix Ethereum. Even Joe Lubin, founder of Consensys, would admit this, and that’s why the venture arm of Consensys invested along side us.

If you are building in crypto, Skale might be an excellent partner and help you build things that actually work. And, well, scale. Mainnet is coming, soon, but you can test now.

Thank you, Skale, for including us in the round. Everyone wanted to invest, and we appreciate you finding room for us.

Arrington XRP Capital Welcomes Alex Shin, Former #Hashed Partner, As New Venture Partner

Many of you in the industry know Alex Shin well. He was a cofounder and partner at Seoul-headquartered #Hashed, one of the largest crypto venture capital and accelerator funds in the world.

Today we welcome Alex to Arrington XRP Capital as a Venture Partner. Alex will help us find new growth opportunities in Asia, the U.S. and the rest of the world.

Alex is American but speaks Korean natively and has lived in both San Francisco and Seoul for the last several years.

We are excited to work with Alex, helping us grow our footprint in Asia and beyond.

Our New Investment In Algo Capital

We are very pleased to join forces with Algo Capital, a new $200 million venture fund founded by David Garcia and Arul Murugan. We have invested in the fund, which will focus on the Algorand ecosystem.

See Coindesk: Arrington XRP Backs Fund’s $200 Million Raise for Algorand Blockchain

We join our friends at the Algorand Foundation, Neo Global Capital, Eterna Capital, GSR, Cognitive Blockchain, Rokk3r, Wibson, 11-11 Ventures, DG Ventures, Winslow Strong, Invermaster and other investors in supporting this new fund.

Algo Capital only takes commitments in Algos, much like our own XRP-only policy. We are very excited to be investors in the new fund, and look forward to co-investing in new blockchain projects with them in the future.

Additional coverage:

The Block: Bakkt investor backs $200M VC fund focused on Algorand blockchain

Finance Magnates: Algo VC Fund Raises $200M to Promote Algorand Blockchain

Yahoo Finance: Arrington XRP Backs Fund’s $200 Million Raise for Algorand Blockchain

BusinessWire: Algo Capital Closes Algo VC Fund at $200 Million

hypepotamus: ATLANTA-BASED VCS RAISE $200M BLOCKCHAIN FUND

Blockchain News: Algo Capital Closes Algo VC Fund at $200 Million – Doubling Expected $100 Million