Real estate company Propy has sold its first real home in the United States as an NFT token on the Ethereum network.
A 200 square meter (m2) property, located in Tampa Bay, Florida (United States) was recently sold as a non-fungible token or NFT on the blockchain of EthereumThis is the first real estate sale to be done through an NFT in the country.
The sale was carried out by real estate startup Propy through an auction in which participants could only enter by connecting their digital wallets and bidding in cryptocurrencies. The starting price of the property was $650.000. However, it was sold for a slightly higher price, 210 ETH; valued at $652.289 at the time of sale.
The auction winner received an NFT of the property title along with an image of the home and a commemorative digital artwork designed by local artist Derek Donnelly. The real estate company said the success of this first-ever sale of a real estate property as an NFT marks a historic moment for the U.S. real estate industry.
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Real estate investment through NFT
Propy wants to automate the real estate industry through new technologies such as cryptocurrencies, blockchain and NFTs. On its website, the company said that the immutability and transparency offered by the blockchain allows it to streamline the process of buying and selling a property, reducing the time and costs of carrying out this process.
Tim Draper, a venture capitalist backing Propy, stated in June 2021 that NFTs are ushering in a new model of real estate, which will completely transform the real estate industry.
On the other hand, Leslie Alessandra, the person who put the property up for sale, explained that selling a house as an NFT token was a way to bring investors closer to learning about and discussing the potential of new technologies. Alessandra is co-founder of DeFi Unlimited and Alloy Design & Development; she is also a cryptocurrency investor who is a supporter of blockchain technology.
Potential for DeFi
In addition to being able to immutably prove ownership of a property, NFTs create a new way to access liquidity almost immediately, Propy explained. The real estate company noted that the owner of the NFT can use their token on decentralized finance (DeFi) platforms as collateral to access P2P loans or mortgages in a decentralized manner and without intermediaries.
The first real estate auction as NFT
In May last year, Propy held the world’s first NFT real estate auction, auctioning off TechCrunch co-founder Michael Arrington’s apartment as an NFT token.
The property, located in Ukraine, had been acquired by Arrington in 2017 using a smart contract on the Ethereum blockchain, making this the first real estate property transacted and recorded on the blockchain. This property was sold as an NFT for a total of 36 ETH; about 93.429 at the time of the auction.
The two real estate NFTs sold through Propy so far are not fractional ownership, the company clarified.
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