LABS is a digital securities issuance platform working on a protocol that seeks to build a unique and complete ecosystem for security token issuers and investors and provide an end-to-end real estate tokenization system for any fund, company, or asset.
Real estate investments have always been mostly unavailable to retail traders. Why? There are too many barriers to entry, with much of it coming from the cost of making such an investment. Thankfully, blockchain technology can create a structure that will allow anyone to make these types of investments through fractional ownership. LABS is tapping that function to make these opportunities available to everyone across the globe.
Table of Contents
What is LABS?
LABS is a digital securities issuance platform working on a protocol that seeks to build a unique and complete ecosystem for security token issuers and investors. It aims to provide an end-to-end real estate tokenization system for any fund, company, or asset.
Their goal is to facilitate an experience where users can fully manage the lifecycle of regulatory-compliant security tokens: from issuance to being traded in various exchange platforms.
LABS utilizes the Non-Fungible Token (NFT) technology to create a digital representation of physical assets on the blockchain. NFTs represent an investor’s share of an underlying asset, which is tradeable on the platform’s secondary market.
Why Digitized Securities?
Digital Securities operate using security tokens backed by real-world assets. This drives the token’s value away from the nearly unpredictable and volatile crypto market. The tokens represent a tradable unit of ownership in a company and are managed through a blockchain.
Since they function the same way a traditional “security” does, they are bound by securities laws and regulations. What makes them different from traditional security is the fact that they let investors bypass middlemen (i.e. bankers) thereby reducing transaction time and financial costs on the investors’ and issuers’ part.
Interested investors from other parts of the globe can also find it easier to participate in investment opportunities from other countries through security tokens. This gives greater exposure to companies that choose to securitize their assets through the blockchain. Through licensed security token trading platforms, investors can easily liquidate their security tokens whenever they choose to.
Advantages of Using LABS
Through the fractional ownership model LABS uses, which is also employed on multiple cryptocurrency technologies, anyone could easily make investments with lower barrier to entry and lower cost. This opens up the opportunity of investing in real estate markets even to those who do not have a lot of capital to start with.
LABS securities are also linked to secondary markets in order to make cross-border investments available. Its connection with other blockchain projects help establish the liquidity that their market needs. Coupled with the implementation of smart contract technology, the platform rids itself of third-party mediators that could potentially control the investments made by individuals.
In LAB’s securities, everyone is free to select which type of real estate investment fits them, such as residential, industrial, commercial, or hybrid investments. They could also easily manage their investments according to their risk profiles and plan out their strategy.
In addition, even real estate projects could benefit from the tokenization of securities through LABS. Through tokenization, fractionalized real estate investments, and listing in secondary markets, more projects could tap a bigger customer market that they weren’t able to access in traditional investment markets. Since anyone can make small investments in real estate projects, the risk of losing capital also lowers because of investor diversification as well.
Liquidity
A common issue among trading platforms and tokenization projects is liquidity. In order to address these concerns, LABS established an ecosystem that makes it easier for even retail investors to manage their holdings.
Secondary Market
LABS securities offer an exchange that is fully licensed and regulatory-compliant. Anyone who wants to tokenize a share of their project can make it available on LABS’ exchange. It can be traded anytime with instant settlement.
Through LABS, managing your investments and executing your strategy can be done real-time. As opposed to traditional markets, investors do not have to wait for trading hours to open before they can be able to reposition their investments. They also do not have to spend as much as 30 days before their exchange is settled.
Real Estate Swap Marketplace
In the near future, LABS will open its property swap function, which will allow investors to swap some of their holdings in a particular property to another, helping them diversify their portfolio as they please. This can be made peer-to-peer, where different investors can exchange their assets instantaneously.
Lending
LABS has its own stablecoin and utility token. These tokens can be used to access collateralized lending that can go as high as 75% of the tokens they pooled. This function allows users to leverage on their assets and make greater gains on their investments while also adding liquidity to the platform’s exchange.
Tokenomics
LABS Token
LABS token is the platform’s native, utility and governance token. It can be used as a medium of exchange, payment for transaction fees, and a representation of a holder’s voting power over the governance of the platform. Some of the protocol parameters that users can vote upon are:
- Voting on the rights to what investment is released
- Voting on new additions to add to the LABS platform
- Vote on staking pools
- The right to put up new real estate projects of interest
Another benefit of holding a LABS token is that it entitles the user to priority access in real estate investments. They do not have to compete with traditional investors in early crowdfunding rounds.
There are also rewards given to LABS holders in the form of investment discounts. The discount that they are given depends on the amount of LABS they are holding.
Staking
To further support the liquidity of the platform and provide additional earning opportunities for users, LABS opened a staking pool. Users can lock their assets to the staking pool to earn rewards from the profit of the platform in proportion to the amount of their stake.
But in addition to the amount of their stake, LABS also factors in the amount of time that the wallet has staked. Users are required to have staked for a minimum of 30 days before they are allowed to receive their share from the rewards pool. The purpose is to prevent people from staking at the last minute with large amounts of LABS to take over the whole pool.
LABS token, which will be used to reward the stakers, will be distributed either daily or quarterly to the holders. Holders can also vote as to how much of the platform’s profit can be distributed to the stakers reward pool.
LABS Stable Token (USDL)
USDL token is LABS’s stable token pegged at 1 USD. These tokens are collateralized by the Security Tokens. In the future, LABS is planning to use USDL in order to issue dividends and payments that need the stability of a stable token.
USDL is also available on the LABS Security Exchange. It can be used to liquidate their asset tokens which can be exchanged into fiat currency. The benefit of transacting with USDL is that users get discounted transaction fees.
LABS Security Tokens
LABS Security Tokens (ST) is the token that represents a user’s ownership of digitized assets. Dividends from their investment will be issued in either USDT or USDL. There are qualified projects for double dividends as well. If a user has made an investment in those, they can receive dividends from their real estate investment as well as earn rewards with LABS Utility Tokens.
Roadmap
LABS is continuously working on expanding its investment options. Today, it is working with real estate developers who want to digitize their projects. With more projects digitized, investors can benefit from diversifying their global investments by getting the exposure to as many projects as they want.
Conclusion
The LABS project is a promising take on the initiative of securitizing assets on the blockchain. What most makes it unique is its decentralized nature, which most real estate platforms do not implement. Here, we are looking at a community-governed platform where users also have a say as to the direction of the project. They can also stake their tokens to further support the platform and earn rewards from that. This is what sets the project apart from the rest.
If the LABS project is successful, it will represent the power of decentralized finance in disrupting the world of traditional finance. While its promise to make real estate investments available to anyone across the globe, regardless of how much capital they have, seems ambitious, the fundamentals of the project look strong and sound.
