Real estate startup Propy has sold its first NFT-backed property in the U.S., the company announced Friday.
The 2,164-square-foot house in Gulfport, Florida, fetched $653,000 (210 ETH) at auction, with the winning bidder being awarded a non-fungible token (NFT) as proof of the home’s ownership.
The logistics of the NFT itself are a bit complicated – the token is linked to the ownership of an LLC that owns the physical asset, not the housing deed itself – but represents continued experimentation in a sector that accounts for $16 billion, or roughly 1%, of the crypto market’s $2 trillion market capitalization.
Propy says the NFT can be used as collateral for crypto borrowers and investors. The sale comes at a time when the market for NFT lending services is beginning to find its stride.
“We’ve gotten hundreds and hundreds of requests from sellers to sell their homes all over the U.S.,” Propy CEO Natalia Karayaneva told CoinDesk in an interview. “The next big sale will be in Tampa again, it’s a condo that is worth between $200,000 to $300,000.”
Propy’s first-ever NFT-backed property sale came last May, when the company auctioned off TechCrunch CEO Michael Arrington’s Ukraine apartment.
While the Florida sale garnered some hype in the days leading up to it, the auction itself was anything but a bidding war. Despite over 7,000 people signing up to bid on the home, which only accepted bids in ETH, the property sold for just $3,000 over its initial asking price of $650,000.
Karayaneva told CoinDesk that Propy has three upcoming partnerships in place with lending protocols, one being with Helio.
While the Thursday sale only accepted bids in ETH, the company’s upcoming sales will be paid in USDC in an effort to reduce concerns of volatility. Propy also plans on offering decentralized finance (DeFi) mortgages to its users in the coming months, according to Karayaneva.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.