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The real estate token standard
Greetings,
This is an open-source real estate standard called Hoam. The protocol is decentralized, programmatically enforceable, and maintained by your peers. It's design strengthens property rights, both digital and physical, to unlock new utility for property owners. United States residential real estate is the initial focus; however, the standard can be applied to any real estate asset in any jurisdiction.
The current residential real estate economy is a house built on a foundation of paper. The information on that paper has been consolidated, and the asymmetry has forged a market infected with principal agent problems. Agents dug moats around their problem to ensure market inefficiencies. Government legislation maintains their moat and protects their relevance at the expense of the property owner. This marketplace fosters poor price discovery. Securitization compounds the inefficiencies and, predictably, the market crashes. The sheer size of the asset class makes the crash global in nature. The last time this market caused a global financial crisis - we took our money back. The next time this market crashes - we take our property back.
At it's core, Hoam is a directory of names. The directory is organized by geography. This provides a governance hierarchy while maintaining local autonomy. Every property is assigned a name, the property name and it's owner is recorded in the directory. Ownership rights of the most valuable asset belongs on the most immutable public ledger. The directory is recorded on Bitcoin.
The Hoam name standard is applied to each property. It is an alternative address identifier for physical property, designed for digital utility. The naming convention draws on both the USPS and DNS name standards. The syntax is deliberate: skeuomorphic, identifiable, hierarchical, and human readable. It also contributes to the governance structure.
unit.address.zipcode
The name is represented as a non-fungible token. This token is conjoined to a semi-fungible token representing the property owner. The format enables change in state, division of control, and transferability. The tokens are organized as nested Merkle Trees; where the branches represent geographic hierarchy. Defined changes in state are inscribed on Bitcoin. This system architecture permits smart contract interactions. These smart contracts are created independently and offered in an open marketplace. Like an app store, the homeowner can decide which apps best serve them and the protocol collects a transaction fee to maintain the protocol.
We have all the tools we need for a decentralized real estate economy. Physical property ownership gets digital representation that’s unencumbered by the current system. Property that is tokenized and programmable to remove market inefficiencies and unlock greater asset utilization. This is the beginning of a new real estate economy.
Sincerely,
P.S. - Hoam is a public utility. It's owned by no one. Hoam is not capitalized. There are no investors; there will be no funds raised. There is no 'premine'. Those who influence, may do so freely.
Table of Contents
Table of Contents
Hoam Directory
Hoam Directory
The Hoam Directory is a non-binary Merkle tree. The hashes are recorded on Bitcoin - serving as an immutable digital ledger. Child nodes, or nested Merkle trees, provide customization, separation of power, and a governance hierarchy. The directory below is structured for United States geographic jurisdiction.
The root of the directory is essentially a distributed version control system similar to Git. The file hierarchy mirrors traditional federal, state, local governance of property rights in the United States. Internationally, this is a hierarchy of geographic jurisdiction.
The United States assigns jurisdiction to the State authorities to legislate and enforce property rights. Similarly, this parent directory sets the rules and assigns who enforces them. It defines a JSON metadata schema and assigns keys to local authority (human or programmatic).
This directory is a full repository of properties with complete history and 'version tracking' as defined by the State. Using the Git analogy, it processes pushed commits, pull requests, and workflows. This node serves as a mempool for changes in state to child leaves.
This peer-to-peer layer is incentivized to maintain the integrity of the system. They input, analyze, and review public records to determine the validity of child leaf changes. Additionally, Zip Code token holders 'mint' new properties in their jurisdiction. Finally, they broadcast 'changes in state' to County nodes that ultimately settle on Bitcoin.
Hoam Token Standard
Hoam Token Standard
Property Token
Property Token
A leaf node in the Hoam Directory represents real property. It is defined in three dimensional space, and thus non-fungible. Hoam represents property as a non-fungible token. The property can change owners or names, but the geographic location is a constant. Division or consolidation results in a burn / mint function with a shared parent node.
Identification of real property is essential for both local and global economic activity. The United States name system for real property is fragmented and redundant to accommodate respected authorities. The Hoam Name System is derived from the Bitcoin Name System, and draws on the familiarity of both traditional US Postal Address and Domain Name Systems.
address.zipcode.hoam
SAMPLE JSON METADATA
{
“sip”: 16,
“collection”: “94115.0667000”,
“name”: “2640steinerst.94115”,
“external_url”: “2640steinerst.94115.hoam”,
“properties”: {
“address”: “2640 Steiner St, San Francisco, CA 94115”,
“street_address”: “2640 Steiner St”,
“city”: “San Francisco”,
“state”: “California”,
“zip_code”: “94115”
“county_fips: “0667000”,
“land_use”: “RH-1 - Residential-House, One Family”,
“recorder_URI: “https://sfplanninggis.org/pim/?tab=Property&search=2640+STEINER+ST”,
},
“attributes”: [
{
“trait_type”: “acreage”,
“display_type”: “number”,
“value”: “.055”,
},
{
“trait_type”: “year built”,
“display_type”: “number”,
“value”: “1893”,
},
{
“trait_type”: “bedrooms”,
“display_type”: “number”,
“value”: “4”,
},
{
“trait_type”: “bathrooms”,
“display_type”: “number”,
“value”: “4”,
},
{
“trait_type”: “last sold”,
“display_type”: “number”,
“value”: “2004”,
},
{
“trait_type”: “sale price”,
“display_type”: “number”,
“value”: “850250”,
},
],
}
Owner Token
Owner Token
Owned property comes in many forms. Owner quantity, type, and respective rights are property specific. The deed holder, property occupant, and mortgage provider are different entities claiming rights to the same property. In this light, ownership is structured as a semi-fungible token.
Link: SIP-013 Semi-Fungible Token Standard
If a deed or title holder provides verified credentials, the semi-fungible token is minted and a decentralized identification (DID) is assigned using the did:hoam method. The holder of the Owner SFT can change the state of the Property NFT in the Hoam Directory.
System Utility
System Utility
Real estate is the largest asset class in the world - by a lot. Each asset is unique: land, structure, debt, equity, taxes, regulation, occupancy, insurance, etc. It's a complex market strung together with paper. Those in the business of asymmetric information (lawyers, tax accountants, realtors) love paper. It keeps them relevant and pays the bills - for now.
The market's complexity necessitates this protocol's simplicity. It's the digital foundation that anyone can build on. Hoam could be summarized: (1) a directory of property names, (2) a list of property owners, and (3) a marketplace to utilize the asset. It's open-source, modular, and composable by design. Property owners can choose what information to disclose, where their information is stored, and which smart contracts or services they interact with. The market will benefit from more efficient price discovery and reduced macro-economic risk.
Token Tooling
Token Tooling
The property name is a non-fungible token in a blockchain name system. The broader NFT crypto community has created innovative applications proving useful: DNS bridge, digital wallet, messaging, access, authentication, voting. This tooling empowers property owners.
The owner key is a semi-fungible token that unlocks smart contract programmability. The token standard leverages Decentralized Identity (DID) and Verified Credentials to facilitate commerce without sacrificing privacy. A framework to reduce information asymmetry and remove the principal-agent problem.
Smart Contract Applications
Smart Contract Applications
The tooling mentioned above unlocks smart contract programmability. These smart contract services can be created by anyone and offered in an open marketplace. An app store for smart contracts. There are many use cases:
Transaction
Mortgage & Refinance
Home Equity & Collateralization
Insurance & Warranty
Taxes and Public Resources
Utility and IoT Device
Social Media
A transaction fee is charged for token minting and smart contract execution. This accomplishes two things: (1) discourages DDoS attack and (2) generates revenue that provides a financial incentive to maintain the protocol.
Hoam Governance
Hoam Governance
A lottery governance model is used to maintain an accurate ledger. Like Bitcoin, participating in the Hoam network: (1) is open to anyone, (2) real-world costly, (3) random, verifiable winner selection, and (4) the reward is earned. Here is a summary of the governance mechanism:
Purchase a 'lottery ticket' with Bitcoin*
Each block a VRF selects a winner
Winner commits transactions to ledger
HOAM is minted and awarded to the winner
*the "lottery ticket" price can be variable, acting as a difficulty adjustment, based on market demand.
A $HOAM token represents a share of the of the protocol's revenue. The Hoam treasury distributes it's balance evenly to each token every 70,000 blocks. $HOAM can be held, sold on secondary markets, or paid to incentivize other market participants. $HOAM's value is determined by protocol adoption and utility, incentivizing participants to grow the network sustainably.
Unlike Bitcoin, this protocol's structure is fundamentally hierarchical - enabling additional localized governance. Each layer of the protocol has defined constraints, but each node can determine configuration requirements.
Example: a token from County A can have a different URI JSON metadata requirement than a token from County B. All 'County Nodes' broadcast on-chain transactions, but two counties can have different information requirements to complete a transaction.
The layers of the protocol act as subnets of information. They separate on-chain /off-chain data and private/public data. The intent is to maximize user privacy and system performance.
Whitepaper
Whitepaper
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