🔴What problems does Zona solve?
Speculating or hedging global real estate markets is difficult.
For investors to go long on real estate in a specific city, they generally need to purchase physical property there. However, there are:
High transaction fees. Investors purchasing real estate are often required to pay up to 5% of the total purchase value to the real estate agent as a fee. A million dollar transaction would require a fee of approximately $50K.
Extremely time-consuming transactions. Lengthy negotiations with landlords and legal paperwork mean that investors may have to wait up to months before the transaction is finalized.
High operating costs. Investors are generally required to pay an annual property tax to the local government for holding a property.
There are additional hurdles if the desired city isn't one that the investor is a citizen of, including:
Higher tax fees. Non-citizens are generally subject to higher taxes when investing in real estate in most jurisdictions.
Regulatory risks. Although the current government may allow foreigners to purchase and own real estate, this may not continue to be the case when the next government comes into power. This is especially true in developing countries.
Currency risks. If the currency of the desired city falls, the investor faces a risk of losing money even though his investment was directionally correct.
On the other hand, there is no existing financial instrument that allows users to short the real estate market of a specific city. Although some investors may choose to short Real Estate Investment Trusts (REITs), this generally only provides exposure to the broader real estate market, instead of a single targeted location.
Zona solves this by allowing investors to long or short global real estate markets at one click via the following product offerings:
Collateralized debt position (CDP) platform: Zona accepts collateral such as stablecoins and WETH to mint real estate Index Tokens. Index Tokens are onchain representations of Zona Real Estate indexes. There will be one Index Token for each city, where the price of the Index Token is pegged to the median price per square foot of residential properties of its corresponding city. For example, the Dubai Index Token will be pegged to the median price per square foot of residential properties of Dubai.
Lending platform: Users can deposit and borrow Index Tokens, stablecoins, and WETH on Zona's lending platform. This allows users to leverage up on their long or short exposure and perform pair trades on different cities, while earning onchain yield from interest fees paid by borrowers.
Exchange: Users can exchange their Index Tokens for stablecoins, WETH, or other assets and vice versa. This allows users to instantly and seamlessly gain or exit their exposure to real estate prices.
Our advantages include:
24/7 and global. Zona operates at all times for a global user base without currency risk.
Near-instant exposure. Real estate investments are finalized in seconds rather than months.
Minimal fees. Investors can save up to 99% in transaction fees and ongoing operating fees.
Low capital requirements. Investors can take a trade with just $1, instead of having to shell out hundreds of thousands of dollars for physical property.
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