#PaymentServices New Use Case: Payment-Free Mortgage
Another use case the re.al team is excited about, Singh said, is on-chain loans against the property.
The way RWA works, users don’t pay interest every month in the same way they would with a mortgage. “It just eats into your collateral.”
For real estate, the typical interest rate on-chain increases by some 5% a year.
Therefore, said the CEO, “what you end up with is a payment-free mortgage, payment-free loan, which I think is a very appealing product if you can package it correctly and get the regulatory stuff sorted.”
This payment-free loan doesn’t currently exist. However, the average American spends more than half of their income on their primary dwelling. Imagine freeing up those funds, the CEO suggested.
As the tech progresses and unlocks areas we previously couldn’t understand, “I think we will find novel use cases and things that weren’t previously possible because of the composability of DeFi,” he said.
Furthermore, on the crypto native side, there’s a demand amongst most crypto/DeFi native users for real-world assets that basically allow people to diversify and hedge their gains.
DeFi natives have capital sitting on-chain and want to keep it there.
“In the short term, that’s what I’m most excited about,” Singh said, “building for that audience that’s already here right now and just wants more and more assets, basically, so that their entire network, everything will just sit on-chain.”
Tokenized Watches Are Out, But Speculating on Their Price is In
Besides real estate, re.al sees a lot of appetite in a few other areas as well.
Notably, watches and wines aren’t it.
The team spent a lot of time making partnerships and handling the logistics that such large services demand – but there was no demand.
For watches specifically, people want to wear them, Singh argued. They don’t want to keep them on-chain.
However, what they want to be able to do is speculate on their prices. “This is going to go up,” the CEO remarked.
