Fintech Spotlight: How Reinno Creates An Intersection Between DeFi And Real Estate
Bitcoin, among other cryptocurrencies, lacks a utility component.
That’s according to Natalia Shirshova, CMO and co-founder at Reinno, a tokenization and lending company whose core focus is on increasing liquidity among real-world assets.
The co-founder said that prior to founding Reinno in 2019, she was part of conversations with institutions that were looking to level the playing field between public and private assets. Among the topics discussed was real-estate, the core focus of Reinno’s tokenization and lending efforts, today.
“We realized that there is much more value in bringing blockchain to real-world assets,” Shirshova said. “Real estate is a wonderful investment because it allows you to preserve value for generations and the prices of real estate increase over time.”
In bridging the gap between liquidity and capital, Reinno created an ecosystem for fractional ownership of the real estate.
“You [can] either sell to investors or use the tokens for loans,” the co-founder noted. “In this way, we’re basically bringing more liquidity to commercial real estate owners and investors.”
See also: How to Invest in Real Estate Online
Core Product Unpacked: Reinno offers real estate tokenization, loans against property-backed tokens, and a platform for listing and investing in tokenized real estate.
The process for tokenizing is relatively simple: Owners get in touch with Reinno, provide evidence of ownership, as well as supporting documentation and proof of occupancy.
“We only work with commercial income-producing properties,” she said. “We do due diligence and then establish a special purpose vehicle (SPV) which is like a business entity that is going to own the property. Then, we issue digital shares out of that SPV, and the tokens go to the initial owner.”
Depending on the goals of a client, tokenized real estate can be listed on Reinno’s marketplace or collateralized and borrowed against for loans.
“We prepare everything with the SEC so things are smooth,” Shirshova noted. “We basically assist our clients from start to finish.”
“If a person wants to use [tokens] for a loan, they would create an account on our platform and connect their tokens to the wallet. They would log in, select how many tokens they want to use as collateral, how long they want to borrow for, and we allow them to decide if they want a higher loan-to-value ratio or lower interest rate.”
Through Reinno, unlike traditional financial institutions, owners can collateralize up to 100% of their holdings. Why? Well, the fintech only works with income-producing properties, which reduces repayment risks.
“If someone is paying rent, then it’s easier for the borrower to pay interest because there is a natural income stream,” the co-founder said. “We do our KYC and AML, also, so at all times we know who owns the tokens and who borrows.”
Innovation Outlook: Presently, Reinno’s focus is on U.S.-based properties.
Shirshova noted that the regulatory environment in the U.S. is very progressive and alleviates the uncertainty that prevents innovation in other countries.
“Uncertainty is the worst thing,” she said. “The SEC made amendments, allowing, for example, … more people to participate in security offerings. I think we’re moving in the right direction.”
Going forward, to promote innovation and use of its platform, Reinno is looking to ramp up its efforts around education.
“We’re also really excited because we just got green-lit by MakerDAO to finance our loans. We’re kind of creating the intersection between decentralized finance and real estate.”
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