Investing through HoneyBricks – Everything you need to know
- on Aug 08, 2022
As digital assets have grown in popularity over the past decade, various subsets of the industry have emerged, each bringing new capabilities. Be it NFTs, stablecoins, or even meme tokens, each has seen a huge boom in adoption. However, arguably the most potentially loaded subset is digital securities or “security tokens”. These assets have the potential to transform the way we invest by introducing new levels of efficiency, transparency and liquidity.
A company called “HoneyBricks” is looking to tap into this potential by leveraging security tokens to unlock new possibilities in commercial real estate investing.
What is HoneyBricks?
HoneyBricks operates primarily as an investment platform for commercial real estate. What sets it apart from more traditional companies of this type is its use of digital securities or “security tokens” to facilitate the process – and provide various benefits associated with these assets.
Commercial real estate is made available for investing through the HoneyBricks platform as fractional ownership. This is achieved through the tokenization of shares of a limited liability company (LLC) that owns said property – each of which is based in the United States.
Does real estate even need tokenization and what is changing for that to happen now?https://t.co/OlVuSSFZGT
— HoneyBricks (@Honey_Bricks) August 3, 2022
HoneyBricks is able to monetize this entire process through two main channels. These include charging property developers a listing fee to act as a bridge to large pools of investors, as well as modest management fees for asset holders.
Who is behind HoneyBricks?
Although the company itself is based in San Francisco, it has a diverse remote team that continues to grow. It all started though, with a pair of co-founders – each of whom currently runs operations.
Between this pair alone, decades of experience are shared in both the technology and finance sectors. Overall though, the team says it operates on a set of core values, which include the following
- Belief in blockchains without trust
- Aim for growth
- Be the change you seek
- Facilitate ownership
For those interested in learning more about HoneyBricks and the thought process behind its operations, we will soon be posting an interview with the company to learn more about the origins of the company, as well as a more detailed look at how it plans to disrupt commercial real estate. invest.
What problems is HoneyBricks trying to solve?
So we know that HoneyBricks opens investment opportunities in commercial real estate located in the United States. What sets it apart from simply investing in something similar to a more traditional REIT? Here are some of the various problems associated with more traditional ways of investing that the company hopes to remedy.
The old adage “it takes money to make money” is relevant when it comes to investing in commercial real estate. More often than not, large sums of capital are required to invest in such limited properties that can benefit those who are already wealthy. By offering fractional investment through the use of security tokens, HoneyBricks notes that exposure to commercial real estate found on its platform can be achieved for as little as $1,000. In doing so, HoneyBricks opens the door to greater asset diversification among a much wider group of investors.
Although commercial real estate can often offer astonishing returns, the asset class suffers from a major drawback: a lack of liquidity. HoneyBricks notes that its platform offers investors the opportunity to tap into even greater liquidity than that offered by REITs, combined with high yields and low correlation to private real estate equity markets.
Settlement times, which can normally take several business days, are reduced to almost instantaneously when using security tokens. This, combined with the ability to offer split investments and a reduction in intermediaries required, means the whole process is quick and cheap.
As ownership of commercial real estate through HoneyBricks is obtained through the use of security tokens, there is an immediate increase in transparency as ownership of assets as well as every transaction is recorded on the blockchain. With security tokens allowing direct ownership, any typical obfuscation is removed.
It should also be noted that as securities, these assets are subject to high levels of regulatory oversight, which means stringent disclosure and issuer operating requirements.
Along with increased efficiency, HoneyBricks is able to reduce operational costs for investors and property developers. This is done by eliminating the need for property management by investors – a task handled by a third-party property management company – and through easier KYC verification practices for its sponsors.
How does HoneyBricks work?
Simply put, HoneyBricks employs a team that “verifies” commercial real estate with high potential for tokenization. Owners can then tokenize shares of the asset, making them available for purchase through the HoneyBricks platform. From there, verified accredited investors can then find an investment opportunity that suits them and access it easily.
HoneyBrick Real Estate Token
Within its platform, investors can gain exposure to an investment opportunity of their choice through the purchase of HoneyBrick tokens structured as security tokens. Each listed property will have its own unique slice of tokens available for purchase.
As the name suggests, security tokens are just that – securities. This means that the creation, sale and management of these tokens are subject to regulation by bodies such as the Securities and Exchange Commission (SEC). It also means that the holders of these assets benefit not only from the actual ownership of the underlying asset, but also from regular dividends.
Powered by Polygon
HoneyBrick tokens, which can currently only be purchased through the company’s platform, are built using the Polygon network. Polygon is built on the Ethereum network, with the goal of providing increased scale and the ability for developers to build a variety of dApps. By building its tokens on top of this Layer 2 network, HoneyBricks ensures that all transactions involving its tokens are cheap, fast, and reliable.
To learn more about this popular project, check out our Investing in Polygon guide.
Since HoneyBrick tokens are securities, this means that holders are entitled to a proportionate share of the dividends associated with any underlying asset. As it stands, these dividends are received by HoneyBricks in USD and paid directly to linked crypto-wallets in the form of USD Coin (USDC) – a popular stablecoin that rivals Tether (USDT) for the largest in the world. world.
Over time, the company notes that dividend payouts can be made in a variety of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and more.
How to invest through HoneyBricks
Investing through HoneyBricks is a simple and smooth process with just a few steps. With tokens available on the HoneyBricks platform representing actual securities, the only stipulation is that investors must either reside outside of the United States or be considered “accredited”.
- Create a KYC verified account.
- Use fiat, crypto or staked assets to purchase security tokens representing fractional ownership of commercial real estate through the HoneyBricks Marketplace.
- Choose from a variety of digital assets to receive as dividends. (USDCoin, Bitcoin, Ethereum, etc.)
Once purchased, investors should benefit from a level of asset liquidity not typically associated with commercial real estate. This is made possible by facilitating direct buybacks of tokens through HoneyBricks or through a secondary market after an SEC-mandated 12-month hold period.
Notably, HoneyBricks also facilitates crypto lending by allowing token holders to pledge assets as collateral, bringing even more functionality to its platform.
HoneyBricks – Reinventing Commercial Real Estate Investing
Through the use of blockchain, HoneyBricks has built an investment platform that opens up new opportunities for sophisticated investors. Backed by a well-rounded team, this young company has the potential to act as an exposure for the potential of security tokens and what they have to offer the real estate industry as a whole.