Elysia launches small-investment real estate service via blockchain

South Korea’s Elysia launched a small-scale blockchain-based real estate investment service. Through the new service allows users to invest as little as $92 per month on real estate parcels of their choice and to transparently manage returns.

The new service is the first tokenized real estate service to be compliant with the Capital Markets Act in South Korea. Elysia plans to increase the amount of products offered in major areas such as the upscale Gangnam District in Seoul, starting with parcels ready for investment in the Yeoksam neighborhood.

Elysia operates the service by pre-acquiring completed buildings and selling equity in the building. This differs from indirect investment types, such as REIT, which pools investors’ funds and divides returns from rent and sales. Elysia’s Jeonggeon Lim commented, “[We are trying to provide a way to invite and protect small investors in the expensive real estate market.]”

The minimum investment for real estate parcels through this service start at $3,300, which can be payed in installments up to a 36-month term. Investors who purchase a stake in a parcel divide the rental revenue and sales profit by the equity in the parcel itself. Additionally, it is possible for investors to directly participate in the management of the real estate by exercising their voting rights on the service.

“[We are trying to provide a way to invite and protect small investors in the expensive real estate market.]”

Elysia’s Jeonggeon Lim

Elysia is the first private company in South Korea to capitalize on blockchain-based real estate transactions. Their blockchain records data such as purchases, rental contract management, lists of shareholders of a parcel, and payments. Several government-sponsored programs are in development now that hope to take advantage of blockchain technology in similar ways that Elysia is now.

Blockchain Moving into South Korean Real Estate

Sejong Telecom recently began testing the functionality of real estate transactions over a blockchain by the Busan government as part of the Busan blockchain regulatory free zone. While their program will record transaction data and prevent fraud, the platform is attracting attention because it will utilize securities token offering (STO) services which have been difficult to attempt due to a lack of legal infrastructure. Furthermore, the platform will facilitate the investment process and the profit-taking process in accordance with South Korea’s Electronic Securities Act rather than the Capital Markets Act as Elysia’s does.

Meantime, the South Korean national government through the Ministry of Land, Infrastructure, and Transport, appear to be moving forward with plans to develop and launch their own similar platform. They aim to improve the safety and convenience of real estate transactions through this platform. To that end, the ministry will develop a blockchain to share data securely and conveniently. Such a blockchain will most likely be centralized on a server at the ministry headquarters where transaction data will be protected behind hash values that only the current registrants will know. Also, such a platform would require an adjustment to existing laws as it is developed.

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