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REAT – WHITE PAPER

REAT – WHITE PAPER

REAT.io

Real Estate and Asset Technology Blockchain

Decentralized Finance, Real Estate and Real Assets Blockchain

Cryptocurrency backed by REAL ASSETS

Whitepaper

version 0.14

Our Mission:

We are pioneers developing next generation blockchains for real world applications based on original cypher community principals.  Delivering the promise of blockchain technology:  Ethical and powerful social contracts protecting a fair, free society through continuously improving, massively decentralized transaction systems developed for the common good of all. Let us proceed together apace. Onward.

REAT – Real (Estate) Asset Transactions – blockchain technology for the real world. 

REAT allows you to efficiently manage and complete simple or complex transactions in real estate, art, vehicles, businesses and other assets and have them registered by professionals in the real world.

REAT is a powerful transaction management platform for the real world. Whether it simple buy, sell, rent, lending or complex syndicated deals with multiple participants REAT allows efficient deal management.

REAT Blockchain Highlights:

  • efficiently and quickly fund deals via blockchain without limitations of traditional fiat systems
  • hybrid solution connecting blockchain to the real world of assets
  • global funding of assets via syndication or financing (like crowd financing)
  • REAT marketplace connects asset holders to buyers, financers, share and stake holders and allows financial instruments to be registered on assets

Blockchain technology for the real world

  • Hybrid solution using blockchain and professionals such as lawyers to complete the last mile and register transactions on present registries and systems

Crypto backed by real assets

  • REAT is crypto backed by tangible real world assets

Robust and Self correcting

  • all participants are motivated to act efficiently and ethically to promote their standing in the community

For Everyone

  • You don’t even have to know or own REAT or crypto to benefit from it. REAT is an information management platform. It can be used by professionals to do any traditional asset transaction faster, better and more efficiently. Your lawyer, lender or agent can use REAT for your transaction and give you better deals.
  • REAT crypto holders gain direct access to opportunities in domestic and international markets where they can utilize participate in a secure, efficient and cost-effective way.
  • REAT allows a seamless, quick, and low-cost way to own real estate revenue streams for investors without any of the regulatory burdens associated with it. It streamlines real estate investment by offering a venue for the capitalization of cryptocurrencies and their conversion in actual, physical property. This model facilitates entry of investors into cryptocurrency with the added security that is backed by real world assets.

Powerful

  • Everyone can benefit from sophisticated financial instruments. For instance you can do crowd funded / syndicated purchases or lending. 

Instant Liquidity

  • Smart contracts allow liquidity and flexibility.  For example a private mortgage lender can sell the smart contract of his loan in a open marketplace at anytime. This frees the lender from having their funds locked for the term providing massive liquidity and flexibility to the marketplace.

Smart Contracts for the Real World

  • Through REAT’s smart contract, large real estate can be syndicated and distributed between individuals and financial institutions. In this way, the user will get the opportunity to invest small amounts of money and benefit from real estate, and ensures security and low risk of investment.

Global Marketplace

  • REAT.io offers a deal management process to asset owners, acting as a neutral agent for asset owners, private lenders and financial institutions so that both parties can search and make deals.

Global Opportunity

  • REAT brings opportunity to people from all over the world participate in any market and any deal. Achieving this through the utilization of the core principles of the blockchain: fairness, accessibility, transparency and trust while applying them to an already existing, fully operational, ecosystem with an annual income and a substantial annual profit.

Faster

  • The main benefits of the adoption of REAT cryptocurrency payments in the traditional real estate investment market are efficiency, speed of processing, flexibility and range of customizable deals possible.
  • Real estate deals / lending can take several weeks. Where the purchase involves KYC and traditional loan application, this period can extend to several months. These timelines exclude the buyer’s search for an asset on the market. It takes extended periods to finalize transactions because of the processes involved in collecting, verifying and authenticating documentations from different databases.
  • REAT blockchain increases market reach and reduces time and costs in funding deals.
  • Leveraging our hybrid governance and autonomous smart contract system transactions are transparent and fast. This results in reduced the costs and time.

Legal and Compliant Everywhere

  • Final mile of all transactions is completed by lawyers and professionals authorized to do so in the jurisdiction of the transaction. All property rights shall be conducted under the asset’s local jurisdiction, laws and currency

Safe

  • Safety by design.  Almost all blockchain implementations (over 99.9%) including bitcoin, ethereum, cardano, solano, polkadot, and  are quantum vulnerable. It’s only time before they can be hacked.  REAT is quantum resilient by design and future proof.

Real world application of NFT technology

  • certify authenticity via the blockchain to build brand loyalty and discourage counterfeiting
  • create additional revenue streams by adding or combining digital NFT style products on top of physical art / assets / products. For instance physical watches, luxury fashion accessories can have have a digital NFT component like a rare clock app or wall paper for your phone
  • asset and art creators can benefit from being able to collect perpetual loyalties as the asset increases in value. This encourages the creator to make high value assets and art that will increase in value. Building loyalty between the creator and collector as they become partners sharing in the appreciation in value of the asset                             

REAT.io is a Real Asset / Real Estate blockchain platform that brings global reach, funding and opportunity to people from all over the world participate in any market and any deal.

Real (Estate) Asset Tokens (REAT) allows all participants in real assets deals such as real estate, companies, art, vehicles and more to efficiently complete and fund deals where all participants are motivated to act efficiently and ethically promoting a healthy and robust “digital credit society”.

With REAT blockchain, for instance all participants from purchasers, sellers, developers, financial institutions, investors, appraisers, inspectors, lawyers and specialists involved with deals are able to efficiently transact and fulfill their roles via smart contracts.  All participants in the REAT blockchain will be incentivized to act ethically and to the best of their abilities to develop and be beneficiaries of their positive superior reputation on the REAT blockchain. 

REAT Blockchain Highlights:

  • efficiently and quickly fund deals via blockchain without limitations of traditional fiat systems
  • hybrid solution connecting blockchain to the real world of assets
  • global funding of assets via syndication or financing (like crowd financing)
  • REAT marketplace connects asset holders to buyers, financers, share and stake holders and allows financial instruments to be registered on assets

SPECIFIC FOR ART and APPRECIATING ASSET

  • certify authenticity via the blockchain to build brand loyalty and discourage counterfeiting
  • create additional revenue streams by adding or combining digital NFT style products on top of physical art / assets / products. For instance physical watches, luxury fashion accessories can have have a digital NFT component like a rare clock app or wall paper for your phone
  • asset and art creators can benefit from being able to collect perpetual loyalties as the asset increases in value. This encourages the creator to make high value assets and art that will increase in value. Building loyalty between the creator and collector as they become partners sharing in the appreciation in value of the asset

All owners, participants and investors become beneficiaries of REAT.io real estate blockchain.

REAT is a smart contract technology and distributed accounting technology developed for the purpose of splitting real estate under REAT.io, which utilizes blockchain’s intrinsic advantages such as trustless mechanism, antitamper, co-supervision and traceability.

Through REAT’s smart contract, large real estate can be syndicated and distributed between individuals and financial institutions. In this way, the user will get the opportunity to invest small amounts of money and benefit from real estate, and ensures security and low risk of investment.

REAT.io offers a deal management process to asset owners, acting as a neutral agent for asset owners, private lenders and financial institutions so that both parties can search and make deals.

REAT blockchain brings global accessibility and power to local Real Estate deals in the most efficient way.  Decentralized finance and Real Estate. As capital markets are becoming global markets, real estate markets are no exception despite the difficulties posed by venturing overseas no investor can overlook the potential international investment holds out. This urges the need for a new decentralized solution to capitalize on this potential.

North America, for example, accounts for only 5% of the world’s population, but accounts for nearly half of the world’s property value. REAT.io opens up new markets by bringing global investment from large institutions and individuals from Asia, Africa, Latin America, Middle East and other regions to local deal.

Figure: Representation of currently invested/un-invested global real estate markets

REAT Brings global opportunity to people from all over the world participate in any market and any deal. Achieving this through the utilization of the core principles of the blockchain: fairness, accessibility, transparency and trust while applying them to an already existing, fully operational, ecosystem with an annual income and a substantial annual profit.

REAT crypto holders gain direct access to opportunities in domestic and international markets where they can utilize participate in a secure, efficient and cost-effective way.

REAT allows a seamless, quick, and low-cost way to own real estate revenue streams for investors without any of the regulatory burdens associated with it. It streamlines real estate investment by offering a venue for the capitalization of cryptocurrencies and their conversion in actual, physical property. This model facilitates entry of investors into the market by offering them a chance their wealth with cryptocurrency with the added security that is backed by real world assets.

Existing investment models have immense barriers to entry. These are, in part, caused by the lack of standardized models on the regulatory and financial side which make cryptocurrency investing in real estate unfeasible for most investors.

Currently there are three main problems in the market:

  1. Traditional real estate investment processes (including traditional Real Estate Investment Trusts or REITs) are inefficient, slow, and expensive, while denying investors direct control of their funds.
  2. Real estate investing regulations are prohibitive and limit the potential pool of investors.
  3. Investment size restrictions price out most interested investors.

One of the biggest differentiators between real estate and other major asset classes is liquidity. Compared to exchange-traded securities, real estate markets are not as organized or efficient as other markets, which results in slow transaction times and less efficient price discovery mechanisms. The result is substantial capital trapped in less liquid investments, often concentrated in certain geographic areas devoid of domestic investment opportunities.

While many investors with excess liquidity would welcome the opportunity to invest in real estate with crypto currency. There are elements of this investment process that will likely require the assistance of specialists and third-party professionals to close such transactions. The investor needs a complete and easily understood picture of rules, regulations, and requirements governing investment. In some countries, the investment code is simply a guideline and the investor must research and examine other legislation, including the tax code, labour laws, property laws, and rulings and judgments from relevant authorities. REAT

Traditional vs. Crypto

The question, however, will be how these sources of capital choose to invest. While the traditional real estate market is offering a blind pool, investors can choose to invest in the more liquid open-ended market, where some managers are working to create service offerings built around the architecture of blockchain and cryptocurrencies to allow for easy wealth transfer.

The traditional real estate market channels offer a certain degree of stability, but they are slow, expensive and cumbersome. With so much crypto capital waiting to be invested in the real estate market, it is becoming clear that investors need a safe, quick and functional alternative to allow for greater diversification across their investment exposure. As the number of international investors interested in real estate investment by crypto currency is expected to increase. Investors are increasingly turning to digital currency to hedge against the weakening EUR and USD, helping the cryptocurrency rally to beat every major currency, stock index and commodity contract since 2010.

The REAT Solution

REAT brings a revolutionary way for people to get access to investment opportunities using blockchain technology to allow for the fast, efficient and secure deals. By combining the potential with the borderless transaction capabilities of cryptocurrencies we want to build an authentic and genuine investment experience leveraging the power of Decentralized Finance and Blockchain while being backed by REAT a token secured by real world assets.

By leveraging our industry expertise, the power of blockchain and the potential of the seamless integration of cryptocurrency markets, REAT provides a safe, transparent and secure venue for all participants in the Real Estate Ecosystem to diversify their investment opportunities and capitalize on their wealth.

REAT allows a self-governing community leverage the power of blockchain to make deals.

All owners, participants and investors become beneficiaries of REAT.io real estate blockchain.

REAT is a smart contract technology and distributed accounting technology developed for the purpose of splitting real estate under REAT.io, which utilizes blockchain’s intrinsic advantages such as trustless mechanism, antitamper, co-supervision and traceability.

Through REAT’s smart contract, large real estate can be syndicated and distributed between individuals and financial institutions. In this way, the user will get the opportunity to invest small amounts of money and benefit from real estate, and ensures security and low risk of investment.

REAT.io offers a deal management process to asset owners, acting as a neutral agent for asset owners, private lenders and financial institutions so that both parties can search and make deals.

REAT connects all deal participants and provides a bridge between traditional banks, payment providers and modern blockchain digital asset exchanges to provide one frictionless experience to complete Real Asset Deals, Real Estate and other Assets too.

  • anyone can become a global real estate investor
  • Efficient marketplace for service professionals such as a Lawyers, Appraisers, Inspectors to receives rewards and positive reputation history when fulfilling their task via smart contracts
  • Reputation is everything. All participants are incentivized to be good participants or risk losing their stakes and being shunned from the community in future deals.

REAT Coins

REAT coins are developed on a Proof of Authority Layer 1 Blockchain. The REAT coin accounts for stake in an asset that has been created into an individual token per asset.

Blockchain overview and benefits

The main benefits of the adoption of REAT cryptocurrency payments in the traditional real estate investment market are efficiency, speed of processing, flexibility and range of customizable deals possible.

In many countries, investment in real estate development can take more than a month. Where the purchase involves KYC and traditional loan application, this period can extend to several months. These timelines exclude the buyer’s search for an asset on the market. It takes extended periods to finalize transactions because of the processes involved in collecting, verifying and authenticating documentations from different databases.

REAT blockchain increases market reach and reduces time and costs in funding deals.

Leveraging our hybrid governance and autonomous smart contract system transactions are transparent and fast. This results in reduced the costs and time.

REAT facilitates the capitalization of the vast cryptocurrency wealth by introducing it into an already existing and fully developed business model, thus enabling quicker, safer transfer of capital and investment in tangible real assets with a established ROI market. This innovative model will allow for the democratization of the uses of cryptocurrency, taking it out of the blockchain and facilitating its integration with existing, high valuation markets. By taking blockchain’s underlying fund technology and moving it into the ‘real world’, REAT is allowing for the movement of money through the blockchain to make it more mainstream and increase liquidity between traditional FIAT and financial systems and the cryptocurrency world.

Traditionally, only large asset packages were able to achieve the purpose of securitization of real estate assets through the means of REITs. REAT draws from traditional real estate investment tools, such as REITs, where the asset holders can through early audit, risk control, and prediction of asset package income by the third party, rapidly trade the real estate asset’s ownership, financing and income rights. REAT offers the following advantages:

  • REAT it makes real estate investment downsizing dynamic and transparent.
  • information is transparent.
  • fragmentizes large assets.
  • Make real estate investment downsizing dynamic and transparent.
  • Easy syndication of largescale transactions
  • fully supports the process of digitization of real estate ownership and financing
  • High transaction convenience.
  • improve product liquidity and cash-ability.
  • Information transparency. All transaction records are detailed through the blockchain, and the books can be consulted upon authorization to make the entire transaction chain clear, including details of asset operations, which can also be placed on the REAT platform to ensure information transparency through the use of designated governance and smart contract
  • distributed records stored on the blockchain. This ensures transparency and clarity on investment returns, resulting in safer and securer assets.
  • fragmentize relatively small property rights, and shorten the listing cycle.
  • housing assets easier and simpler. Using the blockchain technology, assets can be changed into digital assets quickly.
  • traditional real estate investment tools, such as REITs, need a large number of listed properties in advance with substantial management costs
  • all property rights shall be conducted under the asset’s local jurisdiction, laws and currency
  • specifics of the property (such as real estate address, area, property right period and other relevant conditions), the sale of real estate, whether share repurchase in a certain period of time, valid duration of the subscription and annual effective yield are recorded in the REAT blockchain and managed as per the smart contract
  • financial institutions can register on the REAT underwriting platform, find suitable assets and underwrite shares with REAT tokens.  After the completion of underwriting, financial institution can generate many sub-products from its original shares, release on its own platform and / or show it to users on the display portal of REAT as smart contracts.
  • Each property and product can have smart contracts which users can subscribe to based on their investment interest
  • Property use right will be recorded in the form of a blockchain token, and could be either consumed by the token holder, or preserved for store of value. Each token will be transferable (subject to terms and conditions at the time of issuance) through our distributed ledger network. The specific business process diagram is as follows

Flowchart: Real Asset Deals, Purchases, Financing by REAT blockchain

Flowchart: Financing with REAT blockchain

Blockchain, Deeds & Titles, Registrations & Transfers

Today, a typical property sale entails two steps: the conveyance from seller to buyer, and the recording of the deed.

Some counties now allow electronic submissions of deeds for recordation. But many county recording offices require a paper deed to scan into the county’s central recording system.

To track the sequence of ownership, each conveyance of a piece of property gets manually reconciled with a public index. A purchaser can then check the public record to make sure the seller is actually the last recorded owner, that the history of the property shows no gaps, and that no one has laid claim to the property since its last known sale.

That history of all the property’s conveyances from owner to owner is known as the chain of title. Entering it onto a public record makes it possible for all to know that a property belongs to its buyer, free and clear.

The Problem

As real estate owners and industry professionals, we understand the importance of regular maintenance, property insurance, and other routine tasks designed to preserve the value of what is, for many of us, our most significant asset — our real estate. One thing that often escapes our attention, though, is a routine examination of the public records.

The intersection of real estate and fraudsters is nothing new. Mortgage fraud and deed scams make up a big portion of white-collar crime. People from every walk of life were shocked to discover that they no longer owned real estate they thought was theirs. Whether it is a family home, a business, a vacation property, or anything else, we expect our land to stay in our control until we decide to transfer it. On the surface, it is counter-intuitive to think that a person can simply record a deed and steal our property, but similar scams are occurring with increasing regularity across the country.

In 2016, a Cook County employee pleaded guilty to taking a $200 bribe to insert an additional person’s name into a deed to a Chicago suburban home whose other owners had passed away.

How can this kind of theft happen? Purchases of real estate involve dealing with numerous regulations and signing forms that require proof of identity. This process is intended to ensure valid transfers and to preserve clear chains of title. For honest purchasers, the requirements may feel like unnecessary hoops to jump through; for criminals, they provide an opportunity to cheat unwary property owners.

To protect buyers, sellers, and everyone else involved in a transaction, states must impose this kind of recording requirement at the time of a transaction. Required recording is a commitment to modernization and security. It’s also a prerequisite to moving from legacy to blockchain-backed systems. 

With blockchain in place, states will finally have a document recording system that prevents fake claims to properties — even by government officials themselves.

Blockchain removes the need for a third party to clear a real estate transaction between buyer and seller. That’s because the structure of blockchain is cryptographically protected. As Cook County deed recorder Edward M. Moody observes, this structure “makes changing records or inserting false records almost impossible.”

Each transaction carries its own digital fingerprint. This encrypted fingerprint carries over from one block to the next block in the chain.

Because the conveyance is verified across the blockchain network, it would not be possible for a scammer to slip into the chain and sell the property to someone else.

Blockchain could also store a unified file in which everyone who’s involved in the transaction to give consent to the blockchain’s recording of their information. Their consent creates an agreement that the information is valid and correct. Blockchain algorithms can make sure the right people can check the block, and can tell who added information. And title checks would take minutes rather than days.

Flowchart: Asset TITLE and DEEDS with REAT blockchain


REAT – NFT – Approved Physical and Approved Digital Tokens

Solution in the form of Artist approved Physical and Artist Approved Digital Tokens Standard (“APAD”).  APAD tokens which will provide a market changing disruptive alternative to the options currently available to creators wishing to tokenize some of their rights to art work to optimally exploit their rights in relation to their creation.

Non-Fungible Tokens (“NFTs”) are crypto collectibles which have exploded in popularity over the last few years, with record sales on multiple and competing platforms making news headlines on a daily basis.

Tokenization of creative output has two key benefits if applied correctly:

1.            Rights pertaining to a creative creation can be more accurately dissected and different aspects of them can be exploited separately;

2.            Those carefully defined rights are given liquidity on the secondary market.

This trend is not only growing, but here to stay, having recently attracted mainstream art collectors for the first time. The recent sale of NFTs affiliated with Andy Warhol has confirmed that NFTs are instruments that collectors can trust and easily value.[1]  This will herald the way for more NFTs affiliated with renowned creators to be sold at auctions, physical or online.

REAT APAD Standard: a new industry standard for tokens

To fuel this ecosystem, a new industry standard for tokens is required that remedies these shortcomings, which are robbing creators of their creative and commercial rights. This new standard will not be limited only to digital creation as it is today. It will apply to all forms of creations, physical as well as digital. The new standard will feature new class of token that we have introduced: Artist Approved Physical and Digital Tokens (“APAD”). The tokens will be aligned with the following types: Artist Approved Physical Asset (“AP”)  and/or Artist Approved Digital Assets (“AD”). Each of these types of token has the following three sub-categories: (i) Series Tokens, (ii) Fractional Tokens and (iii) Collective Tokens.

The APAD is a first of a kind token which constitutes a marriage of the physical and digital asset.  Therefore, every APAD contains both rights to the physical creation in the real world and a corresponding right to a digital creation. These aspects are combined in the token and cannot be separated from one another.

Figure 5 – REAT Artist Physical and Artists Digital Standard

The new AP/AD Standard allows only the initial creator of any creation in the physical world or digital world respectively to tokenize the rights to his or her work. Only original creations can be tokenized in such a way and only by the initial creator him or herself. Any creation which conveys copyright in the work to the creator can be tokenized in such a way and the APAD ecosystem encourages a broad application of its functionality across all areas of the creative industry.

The REAT APAD standard has key components which distinguish it from the NFT tokens currently available in the market:

Full creator control over IP transfer:

  • Smart contracts which include the intellectual and property rights of the token will be embedded automatically within each AP/AD, allowing to exploit the asset, while protecting creators’ rights;
    • Fees are also embedded into that smart contract and
    • This contract will become a standard embedded in all AP/AD-tokens.
    • Certified Terms of User (CTU) specifies the scope of the IP rights embedded in the token:
    •  The smart contract embedded within the token includes Enhanced Royalty System (ERS) that allows creators to benefit from every secondary market transaction
    • Furthermore, what sets APAD apart is that it brings efficiency by allowing for direct exchange between participants and providing the platform for this purpose.

Current ASSET Counterfeit Problem

“The amount of total counterfeiting globally has reached to 1.2 Trillion USD in 2017 and is bound to reach 1.82 Trillion USD by the year 2020 which includes counterfeiting of all equipment/products from defence equipment’s to counterfeiting of watches.”  Products sold at brick-and-mortar stores are often shipped into the country in bulk cargo containers and then distributed domestically through traditional train and truck networks. Methods for detecting counterfeits in these bulk containers at the port of entry are well-established and effective.

In contrast to the use of bulk cargo for products sold in brick-and-mortar stores, products sold on e-commerce platforms, including counterfeit products, are increasingly shipped directly to the consumer using small packages. The International Chamber of Commerce found that counterfeiters use international air packages because the high volume of these packages makes enforcement more difficult. Distributing counterfeits across a series of small packages spreads the risk of detection and lowers the loss from having one or more shipments seized, suggesting that losses to the counterfeiter on an ongoing basis would be within a tolerable range. It is harder for authorities to detect counterfeits in small parcels than in shipping containers because cargo containers provide customs officials with more information that can help identify counterfeit shipments. Moreover, the effort required to seize a shipment does not vary by size of the shipment, meaning that a package of a few infringing goods requires the same resources to seize as a cargo container with hundreds of infringing goods.

With the evolution of the online marketplace, the counterfeit sector is thriving more than ever, increasing the significance of the problem. The rise of cyber-retail has helped to boost the entire counterfeit market.  The main issue being buyers inability to determine fakes just from the images they see online, leading them to purchase products they believe look real, which are actually counterfeit but may still carry the retailer’s price tag.

The watch industry has been identified as one of the most susceptible to counterfeit copies, with up to 40 million fake swiss watches hitting the global market each year, with an estimated value of one billion US dollars.  Given that only 30 million original Swiss watches are made, the counterfeit trade is a significant problem

Sales lost to the counterfeit market equating to around 44% of the manufacturer’s suggested retail price (MRSP) being lost to the counterfeit trade. The statistics signify that established and respected brands are losing a large portion of their potential revenue due to the sale of fake watches, and it is not only money they’re losing… Because consumers are largely unaware of their counterfeit purchase, (roughly 65% of customers are buying fakes unintentionally), brands are facing damage to their reputation as the low quality of fakes are being mistaken as authentic products.  Consumers have been deceived by this fraudulent activity in spite of the fact that 87% are aware that counterfeit watches are advertised and sold through digital channels.

In the past, basic counterfeit watches were easy to identify, however, over recent years the emergence of “Super Fakes” have made them trickier to detect. Today consumers are more vulnerable to deception, particularly across digital channels, than ever before. The Swiss research team have recognized the pressing need for a robust system detecting counterfeit watches, in order to tackle the counterfeit market and to protect customers and brands from the impact of fakes.

Black & Grey Market Items & Watches

A black market item or watch is a stolen, counterfeit or fake.  Grey market items and watches are genuine products that are sold through an unauthorized source. These will not have a warranty and probably will not have the same resale value as a watch from an authorized dealer.  Grey market dealers could be selling new watches they are NOT AUTHORIZED to sell. It is important to know the risks and problems associated with buying these “grey market” watches.

Beyond the obvious ethics, most international laws make the manufacture and sale of counterfeit watches illegal. Laws vary from place-to-place, but punishment for the conviction of dealing in the trade of fake or stolen watches and other goods can often be imprisonment. In some countries, even the purchase of black market products can be illegal.

Watches have long been popular with thieves because they’re not only a desirable item, they’re small and easy to conceal. Large scale theft can occur at distribution points and retailers. Additionally, burglaries at the homes of collectors and the rich and famous are another common source for stolen luxury watches. These watches can be sold on any street corner anywhere.

The purchase of black market items by otherwise law-abiding citizens, and their sale by criminals, produces a range of negative results impacting the economy. An estimated loss of 200,000 jobs are lost worldwide annually* in the legitimate luxury watch industry as a result of criminal counterfeit watch production and trade. That means lost tax revenue for municipal, state and federal funding which decreases benefits to citizens everywhere. Just think about the ripple effect counterfeit activity causes throughout the economy.

A New Trend: High Quality Fakes from the Pacific Rim and the Rise in Internet Sales

A relatively new, very sophisticated form of black market luxury watches is coming from the Pacific Rim. These watches are not produced in the typical sweat shop environment of third world countries. These are high-quality reproductions done by people with some degree of knowledge who can produce very good knock-offs.  Even trained watchmakers must open the watch and inspect the movement to find the telltale signs of a fake.

For years, the luxury industry has waged a battle against counterfeiters. It has invested heavily in ultra-sophisticated tech solutions which use the latest advances in nanotechnology, internet of things (IoT), and AI to authenticate products. It lobbies governments to extend enforcement bodies’ powers to seize and destroy fake goods, to prosecute buyers and dealers, and to block access to websites that sell counterfeit goods. And then there are the lawyers: LVMH alone employs at least 60 lawyers and spends $17 million annually on anti-counterfeiting legal action.

These efforts are not paying off. The total trade in fakes is estimated at around $4.5 trillion, and fake luxury merchandise accounts for 60% to 70% of that amount, ahead of pharmaceuticals and entertainment products and representing perhaps a quarter of the estimated $1.2 trillion total trade in luxury goods. Digital plays a big role in this and perhaps 40% of the sales in luxury fakes take place online, as today’s counterfeiters milk the ubiquity and anonymity of the internet space to the last drop. For every e-commerce platform like Alibaba that cracks down on fakes, a new one emerges that allows goods to be shipped directly from manufacturers.

REAT.io can offers a unique solution to the counterfeit problem.

REAT.io Blockchain Solution to Counterfeiting

The REAT.io blockchain offers the following solution:

Most people of counterfeit goods are victims of fraud.  Through blockchain we can provdie assurance of trading in certified assets by the creator / manufacturer, through authorized dealers with a complete chain of custody and history even for sales from collector to collector. 

  1. Certification of assets by the creator visible to all through an immutable blockchain.
  2. Certification of authorized retailers and distributors in a non fungible blockchain database.
  3. Complete chain of custody for collectors in an immutable blockchain secures value of trading in genuine certified assets.

Asset Creator

The asset creator / manufacturer is able to protect their IP and brand by generating a unique blockchain ID during the manufacturing that establishes chain of custody. This is superior to a traditional serial number that is often erased in grey / black markets. The blockchain ID has the benefit of being in an immutable database that is visible and verifiable to all.  Once the asset is completed it can be certified by the creator unique Non-Fungible- Token (NFT) certificate is created with the unique blockchain ID of the asset.  This assures downstream distibutors and collectors of the authenticity of the asset and provides brand security.

Asset creators can also create digital NFT products to accompany the physical asset according REAT Asset Physical & Asset Digital (APAD) standard. This creates an additional revenue stream that leverages the exclusivity and of their brand. It also adds additional value and security because the paired digital NFT  and certificate can not be physically stolen so reduces the impetus for physical theft of these assets.

Creator Branded Blockchain

Asset creators can also leverage the blockchain by selling branded network utility tokens. Thereby benefitting from the value of their network / brand and raise crypto capital for manufacturing, marketing, factories or whatever the organization requires

  1. Offer incentives for collectors to hold tokens. Such as access to exclusive pieces.
  2. Require authorized custodians or distributors to stake / hold tokens for various tiers of advantages

Asset Custodian

Distributors, retailers, museums and other organizations can become authorized custodians.  Reat blockchain allows these organizations to become genuine authorized custodians with a NFT certificate that can not be faked coupled to their own unique blockchain ID. This creates greater brand value and value for being an dealer, retailer or other custodian.

Collector

Collectors benefit from having the assurance that they are purchasing and trading in genuine assets through authorized channels with real warranties, etc.   Complete chain of custody is visible from manufacturing to distribution, retail and used market sales. Collector also benefits from the added security of having digital NFT certificates that can not be physically stolen which lessens the benefit of theft.

Certifying existing assets

REAT blockchain allows Creators, custodians and collectors to submit their assets to be certified by the creator which adds additional brand and ecosystem value.

Custodianship Options

Complex purchasing and custodianship options available via smart contract including but not limited to:

  1. Syndicated or fractional ownership 
    1. Collector or Museums can tokenize and sell voting or non voting ownership shares in an asset.  Can leverage the value of appreciating luxury assets by “crowd funding”
  2. Loans and other financial instruments
    1. allows the registration of loans and other financial instruments against an asset on the blockchain freeing up capital for the owner.  These loans are smart contracts that can be traded in a decentralized finance (DeFi) marketplace

Creator Options

New creator options available via smart contract including but not limited to:

  1. Residual benefits of appreciating exclusive assets. Many luxury items made by the creator will continue to rise in value due to their exclusivity and brand strength. Through smart contracts the creator can receive a share of the increase in value every time the asset is traded. This creates unique creator – collector relationships, increases brand loyalty and provides strong joint marketing advantages and creates additional after sales revenue options through continued service, extended warranties and more.
  2. Through smart contracts can leverage subscription, leasing style sales
  3. New creative and powerful financing options possible

REAT Asset Marketplace and NFT Market

An optimized marketplace that properly caters to the needs of the participants in the ecosystem. Today’s marketplace works against both the manufacturer, distributors and collector. Rather than bringing these two parties together, fraudulent counterfeit market forces have positioned themselves in between them, taking advantage of both creator and collector alike for financial gain. 

The REAT blockchain creates a new type of marketplace backed by certified assets and participant integrity. Due to its immutable certification process, the REAT blockchain promotes and rewards ethical participation. This increases brand loyalty and value for the creators/manufacturers, custodians / distributors and collectors / end buyers.  Creating a direct link and exchange opportunity, across multiple mediums and through the use of highly secure, transparent and efficient blockchain technology.

Creators will feel confident that their image and brand will be protected and will not be diluted or tarnished. Collectors will equally take confidence in the stringent certification protocols to ensure a transparent process that leaves all parties satisfied and with improved efficiency, and an improved collectors experience.

Figure – GENUINE CERTIFIED ASSETS with REAT blockchain


https://www.christies.com/about-us/press-archive/details?PressReleaseID=10090&lid=1

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