Real world assets are one of the hottest areas in Web3 right now.
The Data Scientist Team recently had the chance to work with an exciting Web3 project in the space of RWA and specifically, real estate.
What is Fidociary?
Fidociary is revolutionizing the real estate landscape by transforming physical properties into digital assets through the process of tokenization. Leveraging blockchain technology, Fidociary fractionalizes property ownership, making real estate investments more accessible and affordable on a global scale. Investors can purchase tokens representing shares in property assets, receive rental income, and benefit from property value appreciation. Each token provides a direct stake in real estate, backed by tangible property and governed by smart contracts to ensure transparent and fair execution.
Value Proposition
Fidociary offers a unique value proposition with several key benefits:
- Lower Barriers to Entry: By fractionalizing properties into purchasable tokens, Fidociary allows investors from diverse economic backgrounds to participate in real estate investments with minimal capital.
- Enhanced Liquidity: Investors can buy and sell property interests on secondary markets using cryptocurrency, significantly improving the liquidity of real estate investments.
- Diversification Opportunities: Fidociary provides access to a variety of properties across multiple geographies and segments, including residential, commercial, and industrial, enabling investors to diversify their portfolios.
- Competitive Returns: Token holders can enjoy rental income and capital appreciation of tokenized properties, with profits distributed directly to them.
By transforming real estate into digital assets, Fidociary is opening up new investment opportunities and democratizing access to one of the most stable and lucrative markets.
Tokenomics design and audit
It’s clear that the space of RWA in the real estate provides a huge opportunity, and the right tokenomics design can help Fidociary capitalise on it.
The tokenomics design proceeded in the following steps:
- Collect requirements
- Understand the different agents and their motivation
- Design the right incentives so that the token appreciates in value
Example of stakeholder discovery
Designing a token economy
We proceeded with designing the token economy and the different sets of incentives.
We split the incentives into two parts:
- Demand side
- Supply side
The key behind each incentive is to :
- Avoid feedback loops which can cause implosion of the token economy, like what happened with Terra/Luna.
- Ensure that the actions have a positive effect on the price, e.g. reduced supply, or increased flows of fiat/stablecoins into tokens.
Tests and Simulations
The end design was validated through tests and simulations.
The objective of the simulation was to demonstrate that, given a set of assumptions around transactions, the token economy can withstand pressure.
The simulations were conducted using the TokenLab package, designed and developed by Dr Kampakis himself. A graph from the simulation is show below. This graph shows the expected price, in the scenario of a crash, with 95% confidence intervals.
This demonstrated that Fido can withstand a crash, while also giving a very useful hint as to what the initial token offering price should be.
Tokenomics Auditing
Tokenomics auditing is both an art and a science. It combines multiple different tools, in order to test whether a token economy is resilient, and what can be done to improve it.
Tokenomics design and auditing are essential, not only in ensuring a token economy works in the way it should, but also in building trust within the web3 community, and raising investment.
If you are interested in tokenomics design and auditing services, make sure to visit our tokenomics services page and get in touch.