NFTs are starting to have far more use cases and greater utility both on- and off-chain. They clearly serve a purpose in proving ownership without relying on “trusted” third-parties. Under the current paradigm, if you have a car loan or a mortgage, ultimately the lender/bank hold the title to your “property”, and they get to be the final authority on what you own. For proof of ownership, you have to go to them.
Imagine a world where ownership of your IRL assets was proven on-chain and there was no disputing transaction dates or balances. We believe that, in the not-too-distant future, all assets will be traded digital and transaction records will also be recorded on-chain for rapid verification and transparent proof of ownership. And that these frameworks will be built on the rails of genesis NFTs in a secure and trustworthy way, without all of the traditional bureaucracy.
Imagine a home-owner whose title is stored on-chain as an NFT. A buyer comes to the owner and they agree on a transaction. Smart contracts can be created where the ownership automatically transfers to the buyer after funds are transferred to the previous owner. Funds can also be safely escrowed on chain during a waiting period, if needed.
Unemotional Smart Contracts
Consider the amount of time and money spent litigating ownership of property, land, interpreting legal-ese in written contracts, etc. It’s staggering. And the only winners are usually the attorneys, who get to slug out these issues in court.
We recently witnessed the CeFi, human-led institutions and exchanges go insolvent or have liquidity issues since this crypto bear market began. But it was very telling to witness the DeFi protocols and exchanges perform well during the downturn. Smart contracts (by design) don’t have emotions, or feel greed or the need to show off. Or buy yachts, RIP 3ac.
In short, we are poised to eliminate rent-seeking with on-chain transactions.
Reduce Friction and Promote Privacy — Major Ethos for Web3
The potential future utility for on-chain smart contracts to serve as an objective, disinterested source-of-truth to complete transactions and transparently prove ownership will be a game-changer for IRL asset transactions.
If a consumer wants to purchase an asset and needs to show proof of funds, today they have to show bank account statements or some other proof of assets and credit. But with zero-knowledge proofs becoming a major push in crypto, consumers could prove their ability to purchase IRL assets on-chain while protecting their privacy, and not showing their current assets or wealth if they don’t want to.
Bullish on Blockchain for IRL Assets
Web3 innovation will usher in improvements to nearly every industry in the economy. I believe we’ll all benefit from getting our goods and services faster, transmitting more of the value to the rightful recipient instead of (usually) well-intentioned intermediaries, and clear on-chain proof of ownership.
IRL Assets and value transfer will continue to be relevant moving forward, it’s just the rails that are changing underneath. It’s an exciting time to be building in the space, in preparation for what’s inevitably to come.