Introduction to ALTA Invest

December 14, 2022 / Web3

When the core team launched ALTA Finance, we set out to solve the goal of democratizing real estate ownership for the next generation of capital markets and investors while building a better way to invest using Web3 wallets.

Real estate is one of the best assets for stability and yield. But, until now, investing in real estate has been impossible throughout the Web3 ecosystem.

So, let’s dive into how we aim to solve this problem while simultaneously providing transparency to our investors¹.

Web3 Real Estate Yield

For the first phase of our Invest protocol, we focus on connecting real estate-driven investments as simple yields back to investors, not directly tying ownership². These Offerings will be structured as debt.

The available investments will be organized into Offerings, with each offering including stated timelines, minimum and maximum USDC raise goals, a fixed yield USDC return, relevant links and documents, and any potential risk factors. 

All offerings will be organized by Sponsors. At launch, ALTA Finance will require Sponsors to preserve an interest reserve equal to the entire offering interest required for all investor interest redemptions over the Offering term. This reserve can be verified on-chain at any point during the Offering term.

These Offerings will exist on-chain as smart contracts, and the investors can redeem their interest weekly using their Web3 wallet.

When an investor invests in an Offering via their Web3 wallet, we will issue an NFT back to the wallet representing the Offering and the amount invested for easy tracking.

At the end of the Offering term, the Sponsors will transfer the principal back to the smart contract via USDC, and the investors can redeem their principal using their Web3 wallets³.

Transparency

As part of our initiatives to drive transparency, we have a Transparency tab that will show the flow of funds from the on-chain Offering smart contracts through to the off-chain accounts and associated real estate assets of the Sponsor.

Regulatory Framework

The developed nations will likely enforce regulations on DeFi protocols in the near future. 

With our primary goal of democratizing access to real estate via Web3, we have integrated our Web3 KYC ALTA Verified, and ALTA Verified Accredited verifications for US investors. These verifications can quickly be completed with one click after you connect your Web3 wallet.

In addition, we have instituted the following key elements to allow us to comply with regulations as a US corporation while still innovating in the space:

  1. Offerings will be publicly offered as SEC-exempt Reg-D 506(c) for US residents and Reg-S for non-US residents.
  2. All investors in Offerings will be required to be ALTA Verified on their Web3 wallet, a basic KYC via Stripe® to enforce our prohibited jurisdictions.
  3. If an offering is available to US residents, they must be an accredited investor, which will require a secondary verification called ALTA Verified Accredited provided by our partner Parallel Markets®.
  4. We will file applicable paperwork and include it in the offering documents if required.

Conclusion

We are incredibly excited to launch this product for the Web3 and real estate industries. 

We have worked tirelessly since our launch to create an innovative method for the Web3 community to access real estate, and we are always open to feedback and/or potential partners.

You can contact us via Twitter, Email, or Chat on our website.

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Footnotes:

  1. Since real estate is rooted in the real world and is inherently slow-moving, it is impossible to have all of the transactions and flow of capital occur on-chain. We will improve the protocol as innovations, such as bank account oracles, open up.
  2. The real-world asset and Web3 connections are too complicated and cost-prohibitive at this point in time. For this reason, we will continue to focus on debt Offerings, not directly tying ownership. But it is always on our radar as a core part of our mission.
  3. This represents the highest risk portion of the offering: if a borrowing entity goes bankrupt or experiences delays in liquidating or re-financing real estate assets.