Decentralised Real Estate Lending


With the Kodelab HELOC (Home equity line of credit) solution, End-users can drawdown and repay any amount of CBDC/stablecoin up to a certain LTV (Loan To Value), at their discretion, simplifying and making more accessible the ‘revolving credit facility’, over the standard fixed-term loan. Credit-created funds can hugely increase the liquidity within any payments ecosystem.

Use Case One

HoCDAO : (EVM native, in-house Kodelab project) utilises the Kodelab HELOC – enabling real-estate owners to place NFTs, 1-1 representative of each of their properties, as collateral in a lending protocol smart contract. This lending protocol ‘mints’ (creates) HGBP, a GBP-denominated stablecoin, purely by virtue of the NFT collateral being placed into this smart-contract, which the real- estate owner borrows (up to a certain LTV on the underlying property):

(For completeness, ‘HOC’ is a governance token, given as a reward to borrowers for interacting with the HoCDAO lending protocol).

The real-estate owner can drawdown any amount of HGBP, whenever they like, so long as their total borrowing does not exceed a lending protocol-provided LTV. They are then free to pay back this drawdown at their leisure, so long as they clear any accumulated interest each month. A ‘credit facility’, more than a loan.

Future augmentations

This mechanism, including the NFT component, can be replicated on most other chains.

Crucially, the NFTs in this solution represent ownership rights to the underlying property (in the UK and many other jurisdictions), thanks to two years of complex legal exploration and engineering. This means that if there is a default on the HGBP loan, then HoCDAO (or any other lending protocol utilising the Kodelab HELOC solution) can seize the NFT, and with it effective ownership in the property. This level of security being brought to the blockchain certainly is compelling.

The NFT solution also includes a way for mortgage and associated economic rights (to the mortgage income) to be placed into an NFT. These NFTs could feasibly be traded – mortgages being sold from bank to bank for example – utilising an ultra-fast blockchain network, with a full, untamperable register of ownership.

Use Case Two

Project Victoria – Ripple/Fubon CBDC pilot (XRPL- EVM Compatible XRP Ledger Sidechain hybrid). The Kodelab HELOC sits at the centre of this solution, enabling bank customers to unlock further, ultra-flexible credit in their already mortgaged homes, in the form of a Ripple-minted e-HKD CBDC (Hong Kong’s proposed CBDC):

Future augmentations

Following the HKMA pilot, the Kodelab HELOC product can feasibly become a configurable, whitelabel lending protocol solution, sold/licensed to commercial bank clients in other jurisdictions. These commercial banks can then lend out CBDC (or indeed stablecoin) against property.

The solution greatly empowers mortgage-holding end-users, in that they can drawdown and repay any amount, at their discretion, so long as they do not breach their permitted Loan-To-Value limit.

Stablecoin version

Allowing landlords or property-owning businesses to release liquidity from their properties in the form of stablecoin. By using a lower interest rate than is currently available in the mortgage market (say 3% in the UK), plus the clear ultra-flexibility of our solution vs other lending available to them, we attract clients to borrow stablecoin with us.

We can then utilise a connection to a high speed payments network to allow them to send these released funds over borders and convert them to fiat, or allow them, via integrations, to place funds into other DeFi infrastructure, exchanges or wallets. We offer property owning businesses lightning fast liquidity release from illiquid assets, coupled to a lightning fast, low-cost way of sending funds over borders, as well as ideally a diverse ecosystem of other financial tools and infrastructure.

The full Kodelab HELOC solution has staking and governance modules, that may be replicated onto other chains. If any chain/ecosystem adopting the Kodelab HELOC has a native governance token, then it may be awarded to these property-owning borrowers for interacting with said chain/ecosystem, as an extra incentive to the low borrowing fee and high borrowing flexibility.

CBDC version

1) Together with a CBDC platform, we can approach Central Banks and offer them an all-in-one, responsible engine of mass CBDC production for their population. This could be particularly powerful if the Central Bank in question is struggling as to if it wants to implement a CBDC at all (they may be worried about the impact of too much capital leaving their private banking system, or worried about privacy (our system keeps the separation between Central Bank and CBDC end-user)).

Also, many regulators/central banks are pushing ‘Suptech’ (Supervisory Technology) as one of their priorities over the next few years; our blockchain system, just so happens to provide strong supervisory utility, in that these entities can view the immutable record of collective CBDC transactions from their managed commercial banks, in real time. From here they may perform reconciliations and credit-risk appraisals second-by-second (due to the ‘block by block’ nature of blockchain).

2) Commercial banks and their fixed-mortgage customers, in multiple jurisdictions – utilising our solution commercial banks may offer incredibly flexible lines of additional credit to their existing mortgage customers; across both retail and business. As this system will surely need to be plugged into a wider blockchain payments network, it will also allow these banks to offer their customers the ability to make lightning fast and low-cost payments, using the released CBDC funds.

Benefits & Outcomes

Overall Benefits:

  • Transparency (for users and lenders)
  • Composability and legal finality without paperwork, immutable record of lending (general records + dispute resolution implication)
  • Automatic attachment of rewards for system interactions (stablecoin version), security (DLT + cryptography).

Stablecoin version:

  1. Total collateral pool (via landlord/property-owning businesses)
  2. Users (buyers and stakers) are on the same platform
  3. Borrowing fees – these are the primary revenue source for the project – and directly related to circulating supply
  4. Integrations with other DeFi apps and exchanges – the XRPL ecosystem is of course growing rapid

Further Info

Working on the HKMA project:

“Kodelab says its technology will enable the creation of “ultra-flexible credit” with bricks and mortar real estate serving as collateral.

The firm will also apply its Bank View product to the pilot with Fubon Bank acting as administrator and the HKMA as overseer.

The consultancy claims to have previously experimented with two-tier indirect CBDC models, where a central bank issues the digital currency but its distribution and access are facilitated through intermediaries.

This prevents the mass flight of capital from fiat-backed bank accounts to fiat-based CBDC accounts centred in the lending process – a benefit Kodelab cites in its experimentation of the model.”


The pilot project was completed in 2023 and more developments are planned

This Use Case was submitted to CBRC in January 2024 and Verified by Antony

The CBRC Score of 82 has been awarded: ” Real estate equity release is a complex task today, and this solution would make it significantly more accessible for people to be able to: 1) Access the equity from their property (most people cannot do that now) 2) Access a “fraction of the equity” 3) Do it at speed 4) Do it at low cost 5) Use a Digital Currency as the output to invest quickly and safely elsewhere.  Once the property is tokenized, this needs confirming to the bank who will release the Digital currency against the equity. The details then need to be updated with all interested parties and regulators.  Using Blockchain Technology for these tasks will help ensure “one view of the truth”, speed up the equity release process and provide an immutable record of the steps in the process”

To Verify the Project on Blockchain Scan the QR code:

and to verify live on Ledger: Click Here

A more detailed understanding of the CBRC Score is available on Request

© Antony Welfare 2024