Frequently asked questions

Real estate tokens

What is a Token?

A token is a unit that exists on an existing blockchain. Tokens have prices and are tradable. Examples of tokens are Tether (USDT) and DAI. The major difference between tokens and cryptocurrencies is that cryptocurrencies have their own separate blockchain. For example, Ether is the cryptocurrency for the Ethereum blockchain.

What is real estate tokenization?

Real estate tokenization is the process of creating a digital asset that represents a single property or a portfolio of properties on a blockchain-based system. That’s the future a number of initial coin offering (ICO) issuers envision, one in which tokenized pieces of the property could be tracked and traded via a shared database. In this way, the tokens would allow for what entrepreneurs are calling “fractional ownership,” or the ability for a real estate owner to split up their home and sell off equity stakes. Not only would this allow a homeowner to sell some of the home’s equity should they need extra money, but it would also allow the equity to be freely traded until, one day, the home was sold, at which point the homeowner and equity owner could both enjoy any gain in the home’s value.

What’s the difference between tokens and currency (money)?

While more and more people tend to use the word token, it still remains a rather technical term. In practice, a token is the proof of asset ownership, which includes currency. In other words, tokens are a digitized ownership of an asset that can also be used as a means of payment, which equates token exchange or paying for goods, services, etc. with tokens to barter.

What’s the difference between tokens and cryptocurrencies?

Cryptocurrencies are independent digital currencies with several decentralized processes: coin emission, transaction confirmation, data storage, accounting and management (e.g. making update decisions). To trade, own and pay with a cryptocurrency one doesn’t need any special authorization, all users have equal rights to use cryptocurrencies. Token is a rather broad term, but mainly it is used to describe a whole group of digital assets: digital collectibles, complementary currencies and cryptocurrencies. But to say that all tokens are cryptocurrencies would be wrong, because there are both centralized (managed by a specific organization) and decentralized (managed by a provisional algorithm) tokens, which means they can be under total control or independent. Therefore, only a small subgroup of tokens can be considered cryptocurrencies.

Asset-backed tokens — what are they?

Assets are financial instruments, material or immaterial resources, products or services. Asset-backed tokens are monitored by the accounting system, where they are stored and issued either by a service provider or the organization that owns the physical assets. Every one of these tokens is always backed by a fixed number of products or services, which is guaranteed by a certain party (trustee). For example, one such token can provide the right to the ownership of 1 kg of construction sand, one theatre ticket, one square meter of real estate or even 1/1000 of a work of art.

Is there a difference between owning an asset directly and owning an asset-backed token?

The difference is the physical location of the asset: token-based transfer of ownership does not entail the transportation of the asset, by which the token is backed. For instance, if the owner wants to sell their diamonds, they do not have to spend money to move them from the storage anymore, they can simply sell tokens backed by these assets.

Where can we see tokens used in real life?

Anywhere, really. A coupon for a free haircut can be considered a token, so can a subway token. Before the end of the gold standard, US dollar could be considered a token backed by a certain amount of gold.

What advantages does tokenization provide?

1. Creation of accounting systems where transaction history can be easily checked 2. Reliable audit of accounting system in real time 3. Ability to securely transact with assets 4. Direct asset management model using cryptographic mechanisms 5. Fractional ownership (e.g., tokens issued in the real estate digital registry may be presented as micro-shares (such as square meters) of a particular facility) 6. Creation of a secondary asset market.

How to cancel a transaction in the event of errors or attacks?

It is impossible to delete or cancel a transaction within the blockchain ledger. Nevertheless, there are service transactions, which change the current balance (thus correcting results of actions). Both erroneous and corrective transactions are recorded into the history. This is necessary for secure accounting and protection against attacks.

Will the real estate tokens be listed at exchanges?

The real estate tokens represent an asset-link security. Securities are traded at regulated and licensed exchanges, and many of them are working towards being regulated. For the time being, OZ real estate tokens are not listed.

What is tokenization?

Tokenization is the process of transformation of asset accounting and management in which ownership of each asset is represented as a digital token. The essence of tokenization is to create digital accounting systems for real-world values in order to record and process transactions reliably. Tokenization implies creation of a comprehensive expandable infrastructure, where assets are exchanged and transferred securely, and audit is performed in real time; operating costs of such a system and the overall time to market are significantly reduced.

What does a token provide to its owner?

The token owner is provided with a legally relevant ownership of the corresponding asset and is also able to quickly and reliably transfer this right to other users, without having to transfer the asset itself. Owners of a token are assumed to recognize the legitimacy and uniqueness of the registry where the record of tokens is maintained; they should also trust the custodian of physical assets (in case a token is backed by any).

How can a token be backed by a physical asset?

Tokenization of physical assets is to ensure the binding of digital tokens to a certain physical asset. For example, it is possible to tokenize the property rights of the entire office center. Due to the possibility of fractional ownership, one token can be equated to one square meter of an office space. Therefore, renting business will transform because there would be a particular number of leaseholders (i.e. companies utilizing the facility for their office) and dozens, hundreds, or thousands of lease providers—regular people who fractionally own an office space and earn their monthly rent profit out of the tokens they have invested in (it can be as less as 1 square meter). The guarantor of token conversion to the actual provision is the office center owner. In such a case, an external auditor confirms updates of an accounting system in real time, while an extra auditor verifies the correct interaction of a token and shares of the office center.

What is Ether (ETH)?

Ether (ETH) is the currency of the Ethereum blockchain. ETH is the only cryptocurrency that can be used to invest on Brickblock’s smart contract platform.

Using OZ

Who manages the properties?

The daily management of the properties is done by partners hired by OZ.

What happens if I lose the private keys to my wallet?

You will lose all funds in your wallet if you did not backup your private key. It’s imperative that you keep your private keys safe and backed up in a secure location.

About OZ

Who is the team behind OZ?

OZ tokens

What's an OZ token?

OZ tokens represent ownership stakes in legally-binding loan contracts between homeowners and OZ. OZ tokens are linked to the same types of mortgage and title contracts as traditional home loans, but investors can trade OZ tokens in the OZ marketplace. OZ tokens are built on the Ethereum blockchain, which provides a public record so you can verify the legal contracts underlying your ownership stake in each home.

What is the value of one token?

One token is equal to one coin in the currency of the offer. For example, one token equals one $ if the property is sold in $.

As OZ real estate tokenization is a new product, is there a risk for my investments?

If the OZ real estate tokenization service disappeared, there would be no change on the loan. You still own a share the loan contract, and thus your value in the home.

What happens to my tokens when my investment comes to maturity?

Once the interest or principal amount has been fully paid back the tokens will be burnt and will only persist a log of historical information about the Tokens' functional history as well as flows in and out from each Ethereum Blockchain’s public address.

Is it possible to have multiple people invest in a property?

Yes, we enable crowd investments. Your investment share of the building depends on the size of your contribution in relation to the fair market value of the building. Example: If you invest 10% of the value, then you will own 10% of the tokens issued for the asset. Therefore, you are entitled to 10% of the building’s profits.

Can I live in the building that I buy with OZ tokens?

No. It’s important to note that you are not buying the asset, but investing in it. We are listing managed real estate assets. This means that the building already has tenants paying rent and a property manager in charge of collecting rent and maintaining the building.

Who gets the money that is being invested?

The person selling the asset. OZ ensures that ownership of the property is transferred before funds are sent to the seller. This is important as your funds are never at risk of being stolen, and they are never held by OZ.

Are OZ tokens legal?

Yes, OZ is regulated by the Bank of Lithuania.