Blocksquare Token

<blockquote>For those who read the <a href="https://oceanpoint.gitbook.io/docs/" rel="noopener noreferrer nofollow">Oceanpoint docs</a>, you can skip the first part and scroll down directly to the “Anyone can become a fund manager” section.</blockquote><h2 id="header-0">Built for everyone</h2>Designed to potentially own an unlimited pool of real estate assets, OP enables anyone, without restrictions, to earn by contributing to a decentralized protocol backed by the real estate economy.To fully grasp how Oceanpoint functions, one must first learn about its main features.<ul><li>Non-Custodial: Assets are deposited to and deployed automatically via smart contracts. Users always maintain 100% ownership of their funds and can retrieve them at any time.</li><li>Permissionless: No signup, whitelisting, account verification, or otherwise is required to participate in the Oceanpoint ecosystem.</li><li>Censorship Resistant: Users can always interact with the smart contracts directly, which fundamentally cannot be taken down or tampered with.</li><li>Fraud Resistant: The qualities listed above position Oceanpoint’s ecosystem to minimize the risk of fraudulent activity typically associated with bordered, custodial, trusted, permissioned, closed source, and censored platforms.</li><li>Simple, Easy-to-use: Oceanpoint’s user interface was designed to be as seamless as possible. One-click deposit and withdrawals plus mechanisms for portfolio tracking and miscellaneous Oceanpoint metrics.</li><li>On Ethereum, ‘Layer 2 Positive’: Oceanpoint is deployed on the base (‘Layer 1’) Ethereum blockchain, where it can interact with existing DeFi protocols for yield farming. Layer 2 solutions are under active consideration as potential ways to improve the efficiency of the platform.</li></ul><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/ea60525f067941ea850de1586476b206.jpeg" /><h2 id="header-1">Engaging real estate owners</h2>For a limited time after its launch, Oceanpoint will incentivise real estate owners by enabling them to create a new passive income stream with their existing real estate properties. Just like miners use GPUs to mine and earn ETH or BTC, so will landlords be able to stake their real estate asset to earn BST.This strategy will attract the early adopters to become vested in the protocol by passively earning BST.<blockquote>The more real estate value one tokenizes and stakes, the larger the share in the Asset pool.</blockquote>After tokenizing their real estate asset via Blocksquare’s tokenization system, the owner will be able to mint <a href="https://oceanpoint.gitbook.io/docs/oceanpoint-features#bspt-tokens" rel="noopener noreferrer nofollow">BSPT</a> to their wallet and stake it through Oceanpoint.Essentially, by tokenizing, a real estate owner will be able to stake BSPT tokens of their property to earn BST from the rewards treasury. The value of staked BSPT is always reflected in POINT tokens that get locked up in the Asset pool, in term defining the share in the pool for the property owner.By tokenizing and subsequently staking BSPT, the asset owner will commit to a 6 months lock-up period.After this lock-up period, the asset owner is free to choose either to:<ol><li>Withdraw their BSPT from the protocol together with all earned BST, or</li><li>Leave the BSPT in the protocol and withdraw POINT tokens together with all earned BST</li></ol>If the asset owner opts for the second choice, they will need to start paying the proportionate amount of revenues the asset is earning to Oceanpoint (paid in DAI), as per the corporate resolution signed at time of tokenization.If the asset owner withdraws BSPT, then Oceanpoint essentially does not have any claim over the economic rights of the real estate asset and the owner is free from any financial, legal obligations towards the protocol.<h3 id="how-much-bst-will-go-to-the-asset-pool">How much BST will go to the Asset pool?</h3>This is yet to be decided. The sBST holding community will take a vote via Snapshot prior to launching the first Asset pool and decide the % share of all monthly rewards appropriated to the Asset pool.<h3 id="how-long-will-the-above-strategy-be-in-place">How long will the above strategy be in place?</h3>Just like with other decisions, this is yet to be established by the sBST holding community. In general, the strategy should be in place for as long as it needs to grow TVL enough for Oceanpoint to earn an important spot within the larger crypto and defi space.Anyone can become a fund managerMost of the above information can be found in the <a href="https://oceanpoint.gitbook.io/docs/" rel="noopener noreferrer nofollow">Oceanpoint docs</a>, but what might be missed by anyone reading this is the fact that we are creating the first truly decentralized real estate fund.<blockquote>Except for the fact, that it isn’t structured as a fund. Let me explain.</blockquote><h2 id="header-2">What defines a fund?</h2>A fund is pool of money set aside or collected for a specified purpose, often professionally managed with the goal of growing the value of the fund over time. In investing, the most common example is a mutual fund, which pools money from shareholders to invest in a portfolio of assets such as stocks and bonds.Traditionally, real estate funds are almost always closed-end funds. A closed-end fund is an investment fund intended to last for a fixed term, usually between five and ten years. Investors in a closed-end fund are generally not permitted to make withdrawals or additional capital contributions during the life of the fund.Once funded, an investor’s capital will be returned only upon the sale or refinancing of a fund asset, or upon positive cash flow from rents and other operations. Most real estate funds, private equity funds, venture capital funds, and other funds investing in illiquid assets are structured as closed-end funds.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/ffebfb69441d4b77980976e397a83b66.jpeg" /><h2 id="header-3">Not a fund</h2>One of the main distinctions from traditional real estate funds is that Oceanpoint has no shareholders. Instead, it rewards holders of BST, a freely traded utility token, by executing buybacks from generated revenues, fees and asset appreciation. When users stake BST, they receive sBST, a token used by the community to vote on Oceanpoint related decisions.Another differentiation is that Oceanpoint does not directly own real estate assets. Instead, it owns tokenized economic rights that asset owners commit to the protocol, either:<ol><li>via direct BSPT staking (until available),</li><li>via operated marketplaces where sale of BSPTs to the protocol is enabled.</li></ol><blockquote>One might argue, that tokenized economic rights do not differ much from Stocks or Bonds, but the reality is, that they are in one way or the other different. Even though some regulators might consider them as securities, the fact remains that BSPT tokens are not a representation of equity nor a representation of debt.</blockquote>Moreover, oceanpoint does not pool funds, but instead it mints and burns its own asset backed stablecoin. When tokenized real estate assets i.e. BSPT tokens are acquired, Oceanpoint uses the asset’s valuation data to set a token purchase price and mint POINT tokens to the seller as payment.This means the protocol manages the issuance of POINT tokens — a new stablecoin backed by the USD value of tokenized real estate assets that Oceanpoint owns. One (1) single POINT can always be swapped for 1 USD worth of tokenized real estate held within Oceanpoint’s asset pool.<blockquote>The above mechanics enable Oceanpoint to work more in line with an open-end fund. Except for the fact, that it isn’t structured as a fund. Oceanpoint is more likely to be compared to a real estate backed central bank.</blockquote>Asset managementFrom what we highlighted in the previous paragraphs, it is more and more evident, that the pool of assets that Oceanpoint can own should be somehow managed. Without a proper onboarding process, very risky assets or assets without value could find their way into the pool, increasing risk for the protocol and its stakeholders.How can this risk be mitigated?<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/34f0b09cc6c34e039418f3b1f9483a51.jpeg" /><h2 id="header-4">Due diligence</h2>The start of any due diligence process is usually a gut check.Is this a market we want to invest in? Is the issuer company or the marketplace operator one we trust and are impressed with? Is the property where we believe there is an opportunity to make a strong risk-adjusted return?In about 98% of the assets we will see, the answer to this gut check will probably be “no.” But initially, we will automatically be inclined to accept riskier requests like ground-up development, land, real estate in developing countries, hospitality... Those are simply areas where risk is higher, but on the same time presents opportunities that make it easier for the community to grow Oceanpoint’s TVL.The second part of the due diligence process involves a more in-depth analysis of a real estate asset. This part requires expertise on the side of the due diligence committee and involves checking both legal and financial documentation, including but not limited to:<ul><li>proof of ownership documents</li><li>incorporation documentation</li><li>financial statements</li><li>financial projections</li><li>lease contracts</li><li>market data</li><li>valuation reports</li></ul>Expecting to find the above expertise within our community of BST holders might seem far fetched at this moment, but we believe this will soon change as more and more people at the intersection of real estate and technology come and join the DAO.At the same time, asset onboarding can be divided into 2 groups:<ol><li>Community driven onboarding</li><li>Certified Partner driven onboarding</li></ol>Direct or Community driven onboarding is one where an asset is proposed for tokenization directly to Blocksquare, and subsequently assessed by the BST community.Indirect or Certified Partner driven onboarding is where the asset tokenization is initiated by a marketplace operator (i.e. Certified Partner) and where the due diligence is conducted by the CP’s team.<h2 id="header-5">Direct vs. Indirect asset onboarding</h2>Taking the decision to enable Direct onboarding is one that will impose a lot of work onto the community, but at the same time enable us to attract new real estate assets to the protocol without relying on third parties and their ability to execute.Obviously, scaling across markets would not be easy if the only way to on-board new assets would only be in the hands of the community. Thankfully, Blocksquare is in a position to be able to offer a valuable platform to companies like Terramint, Tokeniza, HeroX and others who have made the decision to operate their own marketplaces.These businesses are able to tokenized real estate properties on their own, imposing their own due diligence processes. Because how the quality of listed investments will have great impact on their marketplace success, conducting proper due diligence will increase end-user trust, enabling them to increase deal-flow.We could say, that with each new marketplace operator, Oceanpoint.fi receives a new due diligence team that exponentially grows our ability to migrate real estate value on-chain.Once a large enough pool of marketplaces is established, direct asset onboarding activities will stop, and onboarding of new real estate assets will rely exclusively on marketplace operators.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/76bbd649842145c691cde3dc71cce9fd.jpeg" /><h2 id="header-6">Portfolio risk</h2>BST, when staked, i.e. sBST is the protocol’s governance token, which gives token-holders the ability to participate in on-chain votes on new pools, development strategies, policies and other important decisions.One of the most important decision-making tasks the BST community will be required to perform is manage asset portfolio risk.Just like MakerDAO has regular asset onboarding calls since it launched the multi-collateral DAI, so will Oceanpoint require regular activity from the BST community. BST holders will be able to either directly engage or delegate their BST to active members in the community. It is therefore important to establish a competent asset on-boarding and risk management board that will control the quality of tokenized real estate assets.<h2 id="header-7">Oceanpoint BSPT staking (v0.3)</h2>At first, Oceanpoint will incentivise real estate owners by enabling them to create a new passive income stream with their existing real estate properties. Just like miners use GPUs to mine and earn ETH, so will landlords be able to stake their real estate asset to earn BST.<blockquote>The more real estate one tokenizes and stakes, the larger the share in the Asset pool.</blockquote>After tokenizing their real estate asset via Blocksquare’s tokenization system, the owner will be able to mint <a href="https://oceanpoint.gitbook.io/docs/oceanpoint-features#bspt-tokens" rel="noopener noreferrer nofollow">BSPT</a> to their wallet and stake it through Oceanpoint. By tokenizing and subsequently staking BSPT, the asset owner will commit to a 6 months lock-up period.After this lock-up period, the asset owner is free to choose either to:<ol><li>Withdraw their BSPT from the protocol together with all earned BST, or</li><li>Sell the BSPT to the protocol and receive POINT tokens as payment, together with all earned BST.</li></ol>If the asset owner opts for the second choice, they will need to start paying the proportionate amount of revenues the asset is earning to Oceanpoint (paid in DAI), as per the corporate resolution signed at time of tokenization.If the asset owner withdraws BSPT, then Oceanpoint essentially does not have any claim over the economic rights of the real estate asset and the owner is free from any financial, legal obligations towards the protocol.To simplify the on-boarding process, 10,000 BSPT tokens or 10% of each new real estate asset shall be accepted by default for staking within v0.3.<h2 id="header-8">Risk governance</h2>With v0.3 the goal is to attract open-minded real estate asset owners to become vested in the protocol through BST. The v0.3 BSPT staking functionality will thus be time-limited and only available as an early stage incentive mechanism.However, the ultimate goal for Oceanpoint is to operate as a liquidity engine for marketplaces running on Blocksquare’s infrastructure and the real estate assets they list. Once enough real estate is locked-in, BSPT holders will only be able to buy and sell their asset tokens to Oceanpoint in exchange for POINT tokens.<blockquote>POINT tokens are a stablecoin backed by the USD value of tokenized real estate assets that Oceanpoint owns. One (1) single POINT can always be swapped for 1 USD worth of tokenized real estate held within Oceanpoint’s asset pool.</blockquote>As a USD correlating token, POINTs will have much lower liquidity in comparison to DAI, USDC or USDT, but nonetheless, liquidity mining campaigns will increase the incentives for Liquidity Providers to increase it. As POINTs will be the only real estate backed stable coin available on the market, we believe it will receive enough attention within the community — but only if the TVL is high enough for the crypto market to care.Taking into account real estate is the biggest asset class in the world, increasing TVL of tokenized assets locked within Oceanpoint should be an achievable goal, especially considering how easy it is to tokenize real estate assets with Blocksquare’s tokenization protocol.Nevertheless, governance will be the main factor for protocol growth. For each real estate asset to be sold to Oceanpoint in the first place, a governance vote shall take place to define two parameters:<ol><li>The BSPT token address, and</li><li>the max. amount i.e. threshold of BSPT that OP can hold at any given time.</li></ol>For instance, if BSPT-OCN-1 valued at 1,000,000 DAI would receive a OP threshold level of 25%, that means no more than 25,000 BSPT-OCN-1 tokens can be sold to Oceanpoint. If the full threshold is reached, 25,000 * 10 DAI &#61; 250,000 POINTs could potentially be minted into circulation should holders of BSPT-OCN-1 decide to sell their holding to OP.Thresholds will be dynamically managed, allowing sBST holders to increase or decrease the threshold for each individual asset. When decreasing a BSPT’s threshold, the current OP holdings of the asset might be greater, meaning only purchasing of that BSPT from OP will be possible until holdings reach below threshold levels.This functionality requires an active portfolio management strategy and a governance body shaping strategies for the good of the protocol. If we compare it with traditional funds, Oceanpoint’s portfolio can be managed much more dynamically as it can distribute risk across not only geographies, but also across property types.<h2 id="header-9">Securing your power</h2>Managing portfolio risk, by increasing exposure to high quality assets and lowering thresholds for less appealing real estate properties will be one of the most important tasks of BST holders.Expecting that the real estate market professionals join our community at this stage is not easy to imagine, but we already have professionals with years of experience amongst us who are keen to contribute with their expertise on all decisions of the DAO. Imagine what the future might hold.This takes us to an important realisation: Although BST and its governance functionality might become a very powerful asset, it is not built for everyone to hold.Think about it.

Oceanpoint: The DAO where anyone can be a real estate fund manager.

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