Joel Lin on Introducing On-Chain Commercial Real Estate with CitaDAO (Episode 263)
Joel Lin join us to discuss on Introducing On-Chain Commercial Real Estate with CitaDAO.
Joel is a Contributor of CitaDAO, a decentralized real estate platform creating an ecosystem of new DeFi primitives.
Links:
Citadao: https://citadao.io
Citadao Discord: https://discord.gg/JjmDe2QdbJ
Want more resources around this podcast? Keep up to date on the latest articles here.
The following transcript was created using artificial intelligence. There will be some grammatical errors below.
00:00:02:13 – 00:00:35:23
Richard Carthon: Hello, everyone, welcome to another episode of Crypto Current, your host here, Richard Carthon. And today I have a very special guest all the way out in Singapore, working on a very cool DAO that is very cool and interesting in the sense that for all of you who are interested in real estate and understanding how you potentially can bring that type of investment opportunity into the crypto blockchain space will look no further. Citadel has found a way to get that done, so I know I’m excited to learn more about this, and I hope you are as well. I want to thank Joel, one of the community members, to join and speak about this today.
00:00:35:25 – 00:00:37:28
Richard Carthon: Joel, thank you so much for being on the show.
00:00:39:06 – 00:00:44:15
Joel Lin: Hey, Richard. Thanks for having us on the show. And I’m super excited to share a little bit more about the jet.
00:00:45:23 – 00:00:52:06
Richard Carthon: Absolutely, well, before we dive into Citadel first, want to learn a little bit more about you, can you give us some background on yourself?
00:00:54:26 – 00:01:45:00
Joel Lin: Basically, for legal reasons, let’s just start off with a short disclaimer. So these are not investment advice, not a solicitation of investment or asking anyone to buy any investment for a while, which has only purely for educational purpose to share a little bit of a hope that follows yet. So I’ll just go straight into it, maybe a short introduction of myself. So, yeah, so my name, my name is Joel, and my background is really in the institutional real estate space or the past 12 years have been before many platforms such as CPE Capital and UBS Investment Bank and most recently insurance equity was platform, helping them invest in real estate globally.
00:01:46:05 – 00:02:19:06
Joel Lin: As for my own crypto experience, it was really back in 2017 and 2018 when I kind of got into the space at a point in time. As you remember, I think fuel was all the hype and the institutional landlord. We had many requests to tokenized our properties by those projects. But and one time one of the major issues we had was that we could never get a convincing answer to two questions.
00:02:19:20 – 00:02:41:17
Joel Lin: Each box was quite a bit. The first one, how we could legitimately enforce our rights to redeem the title deeds underlying the estate, we thought that we are talking. And the second one, how we could get liquidity, secondary market liquidity for we were set to. And that is kind of
00:02:45:19 – 00:03:33:10
Joel Lin: kind of the nail in the coffin for many of these requests that we receive. We couldn’t support them because of that, but it got me in a couple of institutional lawyers in the space. Together, we started brainstorming on how we could develop a legit structure that will confer the right to redeem the underlying title. We have diversity token, just like how you could redeem the US dollar over the UCC, and it was in October 2020 so little more than the year that we had a procurement and we had a structure that prestigious law firm is willing to underwrite, issue a legal opinion to validate the legitimacy of the structure.
00:03:34:05 – 00:03:48:10
Joel Lin: We cannot do this to a family office family office. Look, they agree to engender a portfolio of words to support the PSC for this project, and that is really how this all began.
00:03:49:09 – 00:04:27:05
Richard Carthon: Yeah, that is a unique background, so just to recap it. You have been interested in seeing like, how do you even bring the real estate into the crypto space? So back in October of 2020, it’s almost about a year and a half ago y’all started to move this forward. But the two big challenges that were face was one being able to provide legitimacy through getting the title and the the contract basically where you can have it set up and spread out. And then the second was providing liquidity to that as well. And so those are the two big hurdles and typically not being Typekit get over those two hurdles is what kills a lot of the projects that try to go in and accomplish this.
00:04:27:14 – 00:04:45:12
Richard Carthon: So you fast forward to now of the end of February of twenty twenty two. I’ve made a lot of progress. Can you kind of tell us a little bit of where you are now and why you made the decision to go the direction of a DAO, a decentralized autonomous organization in order to get this entity set up?
00:04:46:29 – 00:04:47:24
Joel Lin: You actually are the
00:04:49:14 – 00:04:52:06
Joel Lin: first to start off with those two,
00:04:53:25 – 00:05:30:22
Joel Lin: those two forms. They will cut off the new in the coffin for many projects and happy to say that we all all it after solution for both of this. So that was really what got us off the ground as to why we decided to approach Jews from Adolfo sweatier from a wet tree perspective, rather than from a sci fi perspective, as many other projects have pursued. It’s really because of DeFi Summer to help us solve the liquidity challenges in this space.
00:05:31:11 – 00:06:11:27
Joel Lin: And and really, if if you look at what we are building over here, we are actually leveraging DeFi to drive demand to unlock capital efficiency in estate and doing it in the typical two contests in a sci fi context. We believe that have kind of cute the ability to unlock that capital efficiency, that liquidity in this space. Our belief here is that today’s realistic, less accessibility, liquidity and composability is a huge market to allow eight trillion of it globally.
00:06:12:12 – 00:06:23:12
Joel Lin: But a whole bunch of that money, essentially lock is not doing anything. It’s not uninteresting being invested, not being used to drive and move the economy forward.
00:06:24:01 – 00:06:29:02
Richard Carthon: And when we emphasize that you said two hundred and eighty two trillion dollars locked in real estate,
00:06:29:11 – 00:06:30:08
Joel Lin: 80 trillion,
00:06:30:18 – 00:06:32:03
Joel Lin: oh my gosh, it’s so much
00:06:32:23 – 00:07:03:18
Joel Lin: just globally right and a whole bunch of it. I mean, if you just assume, let’s say you are only your need to take a 50 percent mortgage on all the properties worth having 40 trillion of dollars, that is, lock is not doing anything at all. And to give you a simple analogy, what I mean by this, let’s assume you have one million dollar today, but and you take this one million dollar, you hit over to your bank, right? And you put this one million dollar into a fixed deposit.
00:07:04:09 – 00:07:38:13
Joel Lin: Now, no matter how low the deposit interest, it’s going to be your banker student and give you some form of interest in return for one million dollar and 50 percent put to the bank. Now, assuming you shop along the street, you saw a one million dollar property that you like very much. You take one million dollars in one million cash and you go and buy the property, which gives you the Typekit it not entitled IS will for million dollar. Take this time to go to the bank and of banks here. Bank of Bank Outlet to put this one million dollar title in the bank in a fixed deposit account.
00:07:38:28 – 00:08:12:00
Joel Lin: How much interest will you give me? What do you think the bank would tell you? Nothing. In no way he’ll say it can be done. Yeah, yeah. And that’s what we mean by capital efficiency. Then when when you put this one million dollar into the system, it’s got you. You lose, you lose access to that one million dollar. You know, we also you can’t be in the bank any point in time because to like we didn’t so open really is to use DeFi a lot that can be done by improving stability, liquidity and stability.
00:08:12:10 – 00:08:48:18
Joel Lin: And we believe this will help drive demand for real estate on chain, increase the capital efficiency with what on chain and has the overall fair value of the real estate universe. In fact, as a team, we believe strongly that in future there will be two sets of prices for real estate. The price of going to state on chain and the price of real estate in real life. And we believe did real estate on chain will always, always have a higher value than investing in real world because there will be more use cases for on chain and let the limited use cases.
00:08:48:20 – 00:09:22:28
Joel Lin: We have today constrained by limitations on how we can allot that capital that we own that same one million dollar that we own in a real estate by everybody else like this, the supplier of capital. So to give us in another analogy here, imagine you have an iPhone today in the iPhone that you have has only three use cases. You can’t make a phone call, you can send SMS, or you can only take a photo of the on board camera buy.
00:09:23:00 – 00:10:02:21
Joel Lin: You can shared a photo with anyone without physically showing the phone itself. How much using this phone is, what else you don’t want and want to have it, but if any? Oh, right, right. Those phones is too. Is this ten twenty years ago and there was the price range that might change fundamentally for the iPhone is the introduction of the Apple. So what did? He attract top talent, top developers from all around the world to come and do apps on the App Store and each of three steps that comes onto the App Store.
00:10:03:27 – 00:10:06:29
Joel Lin: A lot of new utility for the iPhone.
00:10:08:20 – 00:10:41:00
Joel Lin: Today with the iPhone, with the apps. On the App Store, you starting your iPhone, you could literally use the iPhone to watch movies, play games, go on social media to do your banking transfers and so on and so forth. The number of use cases for your iPhone exploded exponentially because of the App Store. Right? And that today beefed up iPhone going for more than a thousand.
00:10:41:02 – 00:10:52:27
Joel Lin: But nobody complained. Nobody. Everybody think there’s value in it simply because the use cases have increased. And that’s what we are building or is yet to do, though for a realistic space.
00:10:54:17 – 00:10:55:12
Richard Carthon: We believe that.
00:10:57:12 – 00:11:34:08
Richard Carthon: I was just going to I’m just going to unpack that just for a second. So I think those are two really good analogies. The the first one being or the one that I really want to unpack just for a second is the example of the iPhone one. What really brought its value is that before when you wanted to present software to somebody, you had to have a piece of hardware that you would hand as a consumer and then have the software built on top of it in order for them to use it. When the iPhone came out, that basically said, we’ll take care of the hardware. Now you can build the software to build utilities and make it more valuable. So now you have these software companies that come up build amazing things without them physically having to have any hardware to deal with.
00:11:34:22 – 00:12:04:23
Richard Carthon: And that created economy skills of economies and marketplaces on top of a platform. So in the world of real estate, to bring it back to where things currently are right now is when you look at real estate. Real estate is its own kind of place of value, but it has a lot of liquidity locked up. There’s not a lot of things you can build on top of real estate because once you kind of have that transaction or have have it go through, that’s it. It’s kind of just locked up until the next transaction happens and is then passed from one person to another, either from more money, less money, whatever it is, but it’s just locked.
00:12:04:28 – 00:12:10:09
Richard Carthon: There’s not an ecosystem on which things are operating on top of it. Does that sound about right?
00:12:11:19 – 00:13:02:27
Joel Lin: Right. You are done. And the ecosystem, as is today, is called Solidify. The possibility of the project is what drives the sustainability of this. Now, as you think of US state as the iPhone of the tree is Jesus, I mean versed in the real world, as the iPhone is the tree use cases in the DeFi universe, as the store effectively gutting the API to link that veracity to this app store. The possibility of App Store Info App Store where you have a whole bunch of other exciting DeFi projects out there waiting to unlock that capital efficiency, the accessibility that liquidity in real estate is just waiting for the link to materialize.
00:13:03:29 – 00:13:05:25
Joel Lin: And it said that though, we are building that link.
00:13:07:17 – 00:13:38:12
Joel Lin: And we believe that in future, the value of your onchain will increasingly be driven by the use cases for the real estate tokens itself. With the underlying asset only contributing a fraction of the actual value of diversity token. We believe that we it today is a very traditional asset class. That’s right for disruption. The time for disruption is no. We believe that all assets will ultimately be tokenized in the new world, just like how everything securitized today.
00:13:38:26 – 00:14:13:06
Joel Lin: The difference with tokenization, you no longer have to have intermediaries effect fees. The fat cats along the line that for some reason or another. That values simply by definition and by allowing to do things to your own, assert that you are not a lot to do. Because of some went to institutional space, but like, you know, they do do that, we usually have like regulation saying that you shouldn’t do this, you can’t do that, you know, Hey, this is my own, as you know.
00:14:14:03 – 00:14:24:22
Joel Lin: But you can’t. You’ll $1million your property. There’s the old one billion dollar. Well, why is it that you need to wait for others to tell you how much you can unlock, when you can unlock, where you can unlock?
00:14:26:27 – 00:14:42:01
Richard Carthon: It gives you the flexibility to do it back, so it’s it’s interesting and what I want to unpack more about as I look at the Citadel and just looking at some of the things on the website, you talk about participating in the i€, do you explain what that is and how people would potentially be able to do that?
00:14:46:15 – 00:15:22:05
Joel Lin: Yeah, thanks for doing brains, bring us a bit tuna. So I basically is our process to introduce virtually unchanged. And that’s what it really stands for. I hope it is a very unique process and we believe will be a very rewarding process for the community who likes to help us bring the worst intention. Now our vision here is that in future, landlords will be able to list the Albu estate in a permissionless manner on the set up platform.
00:15:23:00 – 00:15:39:21
Joel Lin: And the community will make the decision as to whether that real estate is priced currently is worthy to bring on chain to introduce to the rest of the DeFi community to compose with other DeFi projects. So
00:15:41:09 – 00:16:15:25
Richard Carthon: just maybe on what you’d show a demonstration of how the eye wall will be conductor, assuming we have a 20 million property, which is the case here, and in this case, the landlord decides to put up a one million dollar. We want to be shared by all participants who successfully participated in the aisle over the next 10 days. No. In the tradition of war, this one million dollar is effectively the commission you pay to a top party agent with no vested interests in the real estate that I’m promoting.
00:16:16:07 – 00:16:46:08
Richard Carthon: But in this case, you should be rewarding those who put their money where their mouth is. Those words should be committed into the aisle and those people who consider possible to contribute to this. I will be committed to this. I’ll initially be we’ll be rewarded based on when they choose to participate in the aisle and how many people choose to participate in the Iowa at the same point.
00:16:46:10 – 00:17:17:26
Richard Carthon: But it’s very similar to how you farm for you is a concept that is fairly well understood within the weaponry space. And that concept, we believe, is very exciting for all the bond creators out there, for all the to users out there. We want to introduce to them, so we introduce to them via this. A concept called oil, which is the activity has been on on, on, on the new for me. The unique thing about this is that.
00:17:19:02 – 00:18:04:16
Richard Carthon: Unlike other cases where you either you folks, may you typically meet stablecoin or you call me a dictator, so I’d be cleared you for governance token. In this case, you should implement a stablecoin to a more stable place because this one million dollar world should he get paid up in USDC. And you can call it right after the Lewis or no? How do the participants share in this one million dollar? In this case, because it’s 10 days, we will assume equal distribution of this one million dollar over 10 days and set up a $100000.
00:18:04:26 – 00:18:38:09
Richard Carthon: We want pool for each day for the participants to shine. These three want on a protocol basis determined by their commitment to the commitment pool for the day. So let’s assume a case maybe has three participants. We have at least $10000 a day. One Bopp committed 990 on day three and Chemical meet that 19 million on day five, which closes the will also, essentially because at least she came in early.
00:18:38:14 – 00:19:15:12
Richard Carthon: She came in on day one and a dot and she possibly on a 10 plus the $10000 that she put in and the first two post exclusively hers by her $10000 will give four percent off the first two percent of the second pool. So that means that she gets two thousand dollars in off before bops come in. We know how ninety thousand ninety nine percent of the pool and care will come in and take ninety five percent of the pool. So the API, obviously from this is going to go through the roof, right? And that’s the upside.
00:19:16:28 – 00:19:56:18
Joel Lin: No. As the accomplice, there are two potential outcome, the first outcome is that let’s let’s go to the consulate if locked, and the first outcome is that all is not successful if it’s not successful. What happens to Alice Keller? What ever did he call me into the aisle in the first place? They will go back to the aisle smart contract and they will. We claim their commitment, which means that Alice will go back and pick 10000 but will go to the this country and claim is how ninety 90000 USD she and Carol will bear her 19 million USDC.
00:19:56:25 – 00:20:30:27
Joel Lin: And everybody wants that with the lot walks away and all the participants want the league. No chance it should happen. But if the eyewitnesses who know these participants will be punished, that will delay a lot for them to transact themselves effectively. This $10000 will be converted into $10000 a token minted by the lender and distribute it to the participant, Alice. And in return for her $10000 that she called the two introverted tokens, she will be able to also on top of that.
00:20:31:05 – 00:20:47:22
Joel Lin: The token she receive. She will also be able to go ahead and claim to have in 2000 induced ECB what she earned from being the first one and only one in the pool for the first two days.
00:20:48:25 – 00:21:25:21
Richard Carthon: Very interesting. OK, so by locking in liquidity, you rewarding people for being first and early, but you’re also giving a way for investors who come into this, that in the event that the IRA that they participate is unsuccessful, they at least get their initial investment out. But in the event that is successful, they get to get their initial investment, plus whatever is compounded upon. So there. So has the IRA basically found a way to completely? De-risk the downside, like there’s there’s no way like you invest into this.
00:21:26:25 – 00:21:34:00
Richard Carthon: And you walk away with not getting at least your initial investment out. I understand that, right? What am I missing something?
00:21:34:26 – 00:22:05:26
Joel Lin: OK, so to begin before so that we don’t have investors, not do we encourage investments? We only have contributors and we only have community participants who commit capital to dial all playing time. Is that noise? But is there any? There’s still this petition of in anyway. And and because of that, you should not have any additional profit when participating in the Isle of God.
00:22:05:28 – 00:22:30:07
Joel Lin: However, having said that, the mechanism is designed such that it allows participants to put their interest in the property to the land. Not, and if there is sufficient commitment with fund, the interests indicate that the that you will into it, that they read a lot and worth it to mean that by the end, you can go ahead
00:22:31:22 – 00:22:59:08
Joel Lin: and create your own bonito. We know. On the flip side, obviously, because you’re just indicating your commitment here, so at any point in time, if, let’s say, insufficient commitments race, all you have to do is just withdraw your commitment because there’s no there’s not enough commitment to ensure successful air in the first place. You just take your money and you walk away. That’s this. There’s no transition, Daniel.
00:23:00:09 – 00:23:30:04
Richard Carthon: Got it. OK, now, thank you. Thank you for breaking that down, so for for everyone that’s listening to this, they’re really involved in the real estate are their real estate market, are really interested in learning more about this opportunity and they’re like, OK, they want to find a way to participate because again, they’re not smart investors. They are part of the community and they are choosing to contribute if they so choose. What would that process look like? How would somebody who’s listening to this right now be able to take next steps to be able to participate in the Citadel?
00:23:31:24 – 00:24:02:14
Joel Lin: Yeah. To to participate in Citadel. You just have to. There are two, there are two, but actually two official channels that we are engaging our community with. The first one is of this court channel and the second one is our Twitter channel. And to get access to all of that, you just have to visit a little website. Sit down. But I’ll. So let’s see it.
00:24:02:29 – 00:24:44:29
Joel Lin: Deal or no deal. And you should be able to to to to join our community right there to join our discussion of that’s where we are most active and and introduce ourselves and let us know how you want to help, how you think you could help. And we have put you right there. We think this most value for you is as well as for the future. So you see, I take the old aisle and if you join and and mention that you are actually referred to by common.
00:24:45:02 – 00:24:58:14
Joel Lin: So just let us know that cryptogram and we’ve used we’ve also give you a phrase about tokens as sort of a airdrop that you can claim very shortly in the next month or so.
00:24:59:27 – 00:25:32:08
Richard Carthon: Excellent. Well, we definitely appreciate that and everyone listening. We should go check that out and use the referral because who doesn’t like some free tokens headed their way? But dole, you’ve definitely given us a lot of really good knowledge. I always like to wrap up with two fun questions. The first of which is with all the information you’ve been able to gather with being in the space for the last several years as you’re building and figuring out Citadel. If you could go in part one or two pieces of wisdom to yourself when you first got started, what would you tell yourself?
00:25:34:25 – 00:25:37:12
Joel Lin: Yeah, I guess
00:25:39:05 – 00:26:09:09
Joel Lin: probably the first one is to be more patient. Things do not always happen the way you want it to to to take place. There’s a lot of frustration along the way, but like twice the war, it’s an amazing race. And if you’ve seen what, how, how the liquidity piece was a lot by DeFi summer, which was totally unexpected, but boom, we actually took off in a huge way in 2021.
00:26:09:19 – 00:26:38:12
Joel Lin: Sometimes good things just takes a little bit more time to come. But when it materialize, you have no idea the way the world unlocks the mysteries and the challenges ahead for you. There’s always a way forward if those are persistent, so keep staying persistent. Keep believing in yourself in your dream, you know, put and the rest of the pieces will take care of itself.
00:26:39:11 – 00:26:49:00
Richard Carthon: Two great lessons. Be patient and make sure he’s be persistent. Some things just take time, so appreciate that, Joel. But again, what is the final thought that you want to leave with everyone listening here today?
00:26:50:28 – 00:27:22:05
Joel Lin: Well, first of all, look to appreciate all of you for listening to us and really appreciate reached here for giving us the time to share a little bit more about the project. We really believe that rent free essays will be able to change the world that we know of today. You will be able to discover so many things in this world just by improving the efficiency by peer to peer transaction wolf.
00:27:23:04 – 00:27:52:04
Joel Lin: And we hope that all of you up there, we’ll learn more about that free space. We’ll go together. We’ve. Dull communities like ours. I mean, there are adults out there, too, but join join anyone on this. Get your feet wet. Start learning about it and you are going to be so excited by it like I did that you’ll want to give up your nine to five just to do this full time, just like I did.
00:27:54:00 – 00:28:23:23
Richard Carthon: For sure. Well, we definitely appreciate that. Web3 is the future, I agree with you on that. Keep educating yourself, everyone on this. Keep finding unique ways to get involved. As you can see, there’s all kinds of directions you can go in the world of Web three. Find out what your passion is and then find out how you can bring it to this next landscape, which is Web3. So Joel, again, thank you so much for spending time. I know that you’ve let us know different ways that people can connect, which is through city dial that i o where they can connect with you on Twitter and Discord. Are there any other ways that they potentially can connect with you?
00:28:25:25 – 00:28:56:29
Joel Lin: We we stick to the primary mode of communication because there are many other I’m pretty sure you heard scams out there. So just just inches to salvage on the main channel and we be more than happy to into it with you that none of the pseudo community managers or contributors. We keep everything transparent just how dull should be. So always on the main channels and you will get there’s no there’s no questions I’ll phone.
00:28:57:08 – 00:29:03:13
Joel Lin: There’s no conversation about are we are all very transparent. So come on in and start asking me.
00:29:04:10 – 00:29:15:14
Richard Carthon: Perfect. Well, sounds good for everyone listening. If that sounds great, make sure you go check them out at Citadel. And again, Joel, thank you so much for spending time with us and everyone listening. Stay, cryptocurrency.
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