South African startup ProsperiProp has created a new cryptocurrency to offer ordinary people the chance of investing in some of the top property portfolios around the world.
Disrupt Africa reported on Monday ProsperiProp would this week launch an initial coin offering (ICO) to fund its platform that allows people to buy into property investment portfolios using digital currencies.
The startup’s founder and chief executive officer (CEO) Llew Morkel told Disrupt Africa the goal was to use blockchain technology to make property investment accessible to everyone. ProsperiProp will sell PROPX coins via the ICO to create the world’s first blockchain-based property fund.
“The money in the fund is loaned to a special purpose company that uses the money to purchase shares in the top property portfolios that the world has to offer. This company then launches a second token called TREE,” Morkel said.
“The TREE token is sold to the man on the street as a way to give the bulk of the world’s population an option to invest small amounts of money in premium property shares. The TREE tokens own the property shares, but the money raised from selling the TREE tokens repays the PROPX loan.”
PROPX tokens earn 10 per cent of the TREE tokens, plus they still own the fund.
“With the loan now repaid, we do it all again. Loan the money out, buy more shares, sell more TREE tokens. PROPX gets another 10 per cent. Now PROPX has 10 per cent of the first round, plus 10 per cent of the second round, plus they still own the capital. PROPX is going to be a very, very strong token.”
ProsperiProp’s entire business model hinges on the success of the PROPX ICO, as sales of the token provide the cash to purchase property shares.
“The ICO model and selling a token to raise funds is easy to setup, it’s clean and if it is done right, it is transparent. To assist in keeping our venture transparent, we’ve just concluded the appointment of a global auditing firm that will provide complete and detailed oversight into the way we apply and distribute earnings in our business model,” Morkel said.
He said he believed blockchain and cryptocurrencies were “the great equaliser”.
“It is a global phenomenon that doesn’t discriminate between different types of world economies. A concept like PROPX is ideally suited to people within the lower income earning countries in the world,” said Morkel.
“People that earn less money often have a strong desire to build wealth. And property is wealth, but it requires obscene amounts of capital to acquire. Our blockchain-based business model makes the true wealth creating power of property available to anyone at less than US$2 per coin.”
He said it was ProsperiProp’s mission to make property investment affordable to the single mother with two children, the factory worker and the government employee.
“We couldn’t find a single, viable product that offers a person a share in a prime property portfolio for less than US$2. The reason is that it costs too much to manage hundreds of thousands of micro accounts,” Morkel said.
“We realised that the blockchain and cryptocurrencies offer the solution and we created our business model around that.”
The startup’s two main design criteria were that the product should be easy to buy, and should offer real growth with absolutely minimum fees.
“It should offer real value and favourably compete against real estate investment trusts, listed property funds and private property funds,” said Morkel. “Our market is global, and consists of an estimated two billion people.”
ProsperiProp will own a portion of all the PROPX tokens.
“So, we make money when our PROPX token owners make money. As a brand new startup we will only see profit in the final phase of our implementation, with the sale of TREE tokens,” Morkel said.