$TRLX: Asset Tokens
Fractionalized Real Estate Gains and Tokenized SPVs
Last updated
Fractionalized Real Estate Gains and Tokenized SPVs
Last updated
The $TRLX Ecosystem is a property-led, asset backed ecosystem that enables customers to invest in a diverse portfolio of real estate around the world, earn from their investments, and live worry free anywhere around the world. This ecosystem will have multiple asset backed tokens (a value locking mechanism for transparency) for each portfolio to ensure each token is isolated and risk managed to enable higher yield across the portfolio chosen. The realistic ecosystem benefit as an investor and customer is that the yields generated can be used to offset the entirety of rental subscriptions, rent-to-own products or other products within our ecosystem. Our asset backed tokens will encourage a ‘healthier’ buying/investing environment when it comes to the holding period especially within this tokenized asset class compared other tokens as it will give more control of TRLX’s intended purpose: buying and holding for appreciation and rental yields.
*Each Offshore SPV that is tokenized acts as the issuer of their respective TRLX types.
*Properties in each jurisdiction will be owned by a local SPV in that same jurisdiction. Each local SPV is 100% owned by their issuing Offshore SPV.
$TRLX: Asset Backed Token
Aligned with the economic interest model, $TRLX tokens are a set of specific blockchain assets designed to represent fractionalised interests to receive revenues generated from rental income and the sale proceeds of a Portfolio of properties. Holders of these tokens will receive this income whilst never having to manage the unit, tenants or other complexities at all. This structure may confer tax advantages (please check with your tax advisor). For every Portfolio that we launch, we will also be launching a new token that is unique to that Portfolio, meaning that over time the market will have a selection of tokens representing the Portfolios available and this is how the flywheel starts on growing multiple portfolios via this tokenization vehicle. Such economic interest tokens would constitute an “investment” (an “instrument creating or acknowledging indebtedness”) under BVI laws.
To fully understand this, we need to give a brief overview of our model. The objective of our model is to allow anyone to gain access to real estate and the benefits that it brings. For so long, this area has been off limits for average investors and required a reasonable amount of initial capital to get started. With our model, we give people the ability to purchase fractions and in turn bring together the capital needed to purchase the full unit, without doing this all alone. However even in this context, having only a single unit lacks diversification and as such we plan to implement this by grouping together multiple units into a Portfolio.
While there were numerous prospective solutions to be considered, it was the innate features of blockchain technology and cryptocurrency that delivered the best way to represent this asset. Decentralization, combined with the programmable, trustless systems found in blockchains, paves the way to creating the ideal digital asset for this use case. This digital representation is not merely an abstraction; it serves to accurately and comprehensively represent the financial worth of the underlying real estate proposition. The fusion of the intangible digital realm with the concrete world of real estate ensures that each stakeholder has a clear and precise understanding of their investment, whilst also being easily able to trade it on the market (something which real estate doesn’t currently have).
A 'Unit' is a single property or real estate asset e.g. a house, an apartment, etc.
A 'Portfolio' is comprised of several units
Each Portfolio is represented by a specific, TRLX Token (Tokenized interest of profits generated from the SPV)
The 'X' in TRLX is a hint to the concept of their being a token per portfolio
The first Portfolio's TRLX tokens will therefore be called 'TRLX-1'
Our model democratizes access to real estate benefits, enabling fractional purchases and pooling capital for unit acquisition, with multiple units forming a diversified portfolio. Blockchain's decentralization and trustless systems provide the ideal digital representation of real estate assets, ensuring transparency and ease of trading.
In essence, our property acquisition, incorporation and offering strategy will consist of four distinct phases:
TRL team will source for potential real estate agencies/developers that have access to quality property inventory or scout out selected quality properties ourselves, integrating them into our marketplace.
We acquire said properties after the sales of our TRLX property pools, forming a complete portfolio assuring investors of ownership and park these properties under the local SPV (owned by our created offshore SPV - TRLX issuer).
Post-acquisition, we'll find tenants via our home subscription platform (HOMESUB) to facilitate the rental yield component promised to TRLX investors.
After tokenization we will issue tokens e.g. 20,000 tokens at $100 each for a $2 million portfolio, making property investment accessible. Investment subscription of these properties must meet our soft cap (minimum amount needed to be raised to pay property owners) requirements.
In the meantime while scouting for potential real estate partnerships and properties both in our targeted markets Dubai, US and Malaysia, we will begin the process of acquiring the properties using our own funds for the first investment vehicle: TRLX MY. *More details on our first POC below.
This is especially important in the early phases to build validation and trust in the market.
Concurrently we will also raise from our property pools via TRLX Dubai and TRLX MY token sales and use all of the proceeds to buy selected properties to pay off property owners that we have signed with. We will be able to assemble a full portfolio before offering this to the market.
Once properties are acquired, we will immediately begin the process of finding tenants, via our HOMESUB platform to maximize as much rental yields as possible delivered to investors. Next, we will carry out the necessary computations to define the tokenomics derived from the asset values split to the number of tokens that is confirmed to be issued. These tokenomics will yield a fixed supply, with our objective being to establish each token's value at e.g. $100 per token. For instance, if we have 10 properties each priced at $200K per property, we may decide to release 20,000 tokens at a cost of $100 each ($2M total asset portfolio). Our objective is to level the playing field in property investment, creating an avenue that welcomes everyone, without the prerequisite of having large amounts of capital ready to deploy.
Upon completion of the token sale, we will move into the ‘Runtime’ phase.
During Runtime, dispersal of rental proceeds will be automated through Smart Contracts at each predetermined interval, guaranteeing a smooth operation and a dependable revenue flow. It's almost inevitable that there will be intervals when certain units remain unoccupied, but the incorporation of multiple units within a single Portfolio should contribute to an income stabilisation, helping to mitigate the risk of experiencing months devoid of rent.
So, to summarise:
TRL will discover and purchase high quality investment properties (units)
TRL will combine several of these units together to form a unit-group
TRLX asset backed tokens will contain fractional rights to the revenue/income generated from the underlying properties which the associated TRLX SPV owns. The selected portfolio of properties will generate rental income and capital gains (should the properties be sold) facilitated via the home subscription platform.
A fixed supply of tokens will be minted, likely at an assumed value of 1 Token = 100 USD. This price per token has yet to be determined.
Tokens will then be sold to investors and retailers in identified markets. *Refer to our investor and consumer profiling in the GTM deck.
TRL will be appointed as a property manager to ensure optimal operational efficiencies from tenant screening/management, maintenance, collection etc so that profits can be payable to investors after deduction of relevant property management fees.
Investors will receive periodic distributions of the profits from rental income, these will be paid either in Stablecoins or our $TRLCO utility tokens via Smart Contract enabled on various Blockchains.
Asset data gets uploaded on chain and defined via our property filtering process. Relevant tokens are then minted and smart contracts are created together with the SPVs that hold said defined assets. On-chain assets are then created with the defined yields generated from them and yield capture smart contracts are created to pass on to the User. Users/Investors onboarded after relevant on chain KYC.
TRLX Post Asset Fractionalization
TRLX Pricing Mechanism is relatively simple:
Each Portfolio will have its own set of TRLX tokens, TRLX-1, TRLX-2…. TRLX-10 and so on.
Each Portfolio, there will be a token sale so that investors can enjoy yields and capital appreciation generated via the properties bought by set SPVs. These tokens however will not be listed on any CEX and there will be a holding period for said tokens to encourage buying and holding measures before sold to secondary platforms (DEXes e.g. IX Swap). *This will be determined closer to the TRLX token sale date
Each Portfolio will have a total market value pegged, for example 10 properties worth $2,000,000.
We plan to price each token at $100 each (to be determined), meaning that the total supply would be 20,000 in this case.
100% of all TRLX tokens will be sold as part of a public sale via the above channels, this is the only allocation.
For new tokens that are issued for new portfolios, we may change the per-token pricing structure, but the resulting total supply will remain as (total sale price / token price)
For the first year, TRL will engage third party valuation companies to produce reports semi-annually and assess our said real estate portfolios to determine a fair valuation of the owned properties AND determine a rationed price per TRLX that owns them.
This is also to identify any properties that are underperforming or have gone above market value over the years and may deem worth selling them to benefit $TRLX holders. Upon sale, the net proceeds (minus processing costs, taxes and a 5% TRL fee) will be either:
Utilised to acquire replacement unit(s), retaining or increasing total value of that TRLX investment pool
or
Distributed to token holders proportionally, thus lowering the value of that TRLX investment pool and thus we can rationally determine the token price.
This decision will be taken on a vote based on token ownership and using smart contracts, which can be imagined as a specific-purpose DAO.
Post-token sale, the 'Runtime' phase begins with automated rental income distribution via Smart Contracts, maintaining revenue consistency even with occasional vacancies.
During Runtime, our role then combines the following elements:
Managing units, including tenant placement, rent collection, and maintenance.
Distributing profits from rental income to token holders periodically in Stablecoins via Smart Contract on the BASE Blockchain, with future payouts in $TRLCO.
We will periodically review the real estate portfolio to identify any properties that are underperforming or have gone above market value over the years and may deem worth selling to benefit $TRLX holders.
The specifics of how the unit review will operate are still in development.
This decision will be initially be taken at our digression, with later plans to utilize smart contracts allowing for token holders to vote, this can be imagined as a specific-purpose DAO.
For the first year, TRL will engage third party valuation companies to produce reports semi-annually and assess our said real estate portfolios to determine a fair valuation of the owned properties AND determine a rationed price per TRLX Token holders that owns them.
Concurrently we will be working on our own proprietary algorithm that will evaluate property valuation/appraisal in real time based on historical & current information data sets with globe via oracles and off chain APIs. This will assist and automate any properties that are onboarded in future TRLXs seamlessly and be independent from any third party valuation companies to justify asset values and token prices. This will also allow future RWA projects to build their own ecosystem within TRL’s DeFi infrastructure.
