BSPT tokens
Blocksquare Property Tokens (BSPTs) are a standard Ethereum ERC-20 smart contract with a defined maximum issuance of 100,000 tokens for each real estate property, where 1,000 tokens can be issued for each 1% of an asset's capital stack.
Each asset has its own BSPT, meaning the token symbol varies from property to property i.e. BSPT-XYZ-##. The token standard features on-chain property valuation, creating legally binding tokens enforceable by a standardized corporate resolution stored on IPFS.
Token contract features:
the asset's capital stack information
the asset's street location
the asset's geo coordinates
the real estate property's valuation
the property token valuation
the property type (i.e. Residential, Office, Leisure...)
land registry data (i.e. cadastral municipality, parcel number, ID number, building part...)
Protocol features
Blocksquare's Property Factory smart contract is the main smart contract to generate a “PropTokenContract” — an ERC-20 backwards compatible token standard developed by Blocksquare designed to tokenize a specific real estate property and the revenues it generates.
Token symbol standardization
The protocol features a standardized token symbol BSPT-XXX-###, where BSPT stand for BlockSquare Property Token, XXX is a defined unique alphanumeric symbol, and ### is an automatically incremented number.
On-chain property registry
Each PropToken contract is registered in Blocksquare's Property Registry — a smart contract where “Identification data” of all real estate properties is publicly available.
Token supply cap
The “maximum amount” of tokens that can be issued is 100,000, where 100,000 tokens represents a predefined percentage of royalties of any and all net revenues, including revenues generated by a sale of the property to a 3rd party. The Royalties percentage is stored and sealed in the PropToken contract.
Legal rights transfer
“Corporate resolution” is the legal binding document uploaded and stored on IPFS that works in conjunction with a PropToken smart contract and creates a financial obligation by the issuer towards any and all holders of a property token.
Token transfer whitelisting
Due to AML regulations, to hold property tokens, a user is required to first complete KYC using Blocksquare’s platform. This is a one-time process. As opposed to ERC-20 where transferability is not limited, PropToken contract’s “transfer function” uses wallet information stored in the “WhitelistingContract” limiting token transferability according to an issuer’s predefined requirements.
For instance, it is possible to limit token ownership to wallets whose owners are US residents only, or exclude residents of certain countries, or even define custom parameters for eligibility — the more limitations, the less liquidity potential a tokenized property will have.
Capital stack registration
Each PropToken contract also has a “Capital stack” parameter that needs to be defined by at issuance. Besides the tokenization percentage, the capital stack provisions for:
Senior equity
Preferred equity
Mezzanine
Junior debt
Senior debt
This information adds transparency to token investors and the ability for protocols like Maker to create a custom valuation and risk assessment model based on this information. Important to note, that the capital stack can be updated by issuers as time passes, for instance, the debt portion should diminish in time in favour of the equity side.
On-chain valuation
Each PropToken also has the ability to store information about its valuation, split into two categories:
Property valuation, and
Token valuation.
Both values can be updated through oracles. Blocksquare has developed a token valuation model that listens to transactions that occur via DEX protocols like 0x, and takes into account volume, price, property valuation and circulating supply.
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