LABS Group aims to realise everyone’s dream of real estate ownership through fractionalising real estate investments.
Traditionally, entry into the real estate industry requires a substantial investment due to the indivisibility of assets. Consequently, small investors find this asset class completely out of their reach.
Among the few platforms trying a stab at bringing real estate to the masses is LABS Group. Through its ecosystem token and utilising decentralised finance (DeFi) and governance, its mission is to intelligently blend the centralized and the decentralized worlds of real estate to improve its liquidity.
Check out our interview with Chairman Mahesh Harilela (or listen to the podcast).
Mahesh Harilela, is the Company’s Chairman. Mahesh comes from one of the most prominent families in Hong Kong, which owns 19 hotel properties worldwide through the Harilela Group. Mahesh himself has certainly inherited the family’s entrepreneurial spirit and is involved in Trading, Brand Development, Renewable Energy Infrastructure, Agriculture and Education. He is also Chairman of the Board and CEO of M. Harilela Global Investments Ltd and Asia CBD Pte Ltd.
What is Labs?
LABS is a leading blockchain-based ecosystem for real estate investments. The platform seeks to bring more people into the space by fractionalizing investments. Compared with other legacy modes of investing in the real estate space like private equity funds, REITs, and direct investment, LABS emerges as the winner.
For instance, it ticks crucial boxes such as low fees, governance, ownership, staking for profit, tradable, among others.
Critical issues the protocol is trying to solve include:
- Costly entry and exit prices – Currently, the median entry price into the ecosystem is high. The cost rises as you enter into big cities. Apart from entry points, exit costs are driven through the roof by third parties such as agencies.
- Eradicate reliance on Real Estate Investment Trusts (REITs) – Although they allow pooled investments, they are majorly open to deep-pocketed individuals.
- Complicated access to a global network – International property ownership is a nightmare in the current state of the real estate industry.
- Low Liquidity – The traditional real estate market restricts investors from selling to the local market due to low liquidity.
- High fees – The fees range from taxes, agent fees, and transaction fees that introduce inefficiencies in the conventional market.
How Labs Tackles the Above Problems
Labs uses different approaches to solve key issues plaguing the traditional real estate industry permanently. These are:
The project believes in fractionalizing real estate assets, making it possible for multiple investors to put their money in the same assets by reducing the entry costs. Additionally, it minimizes the need for investors to stretch their cash reserves unnecessarily. In doing so, it reduces the risks of losing a lot of money.
Powering a Global Portfolio
With digitization, the project removes the global barrier. Consequently, it provides investors with a chance to have a global portfolio of real estate assets. This lowers the risks for investors. Apart from enabling them to build a global portfolio, the digitization process enables investors to mimic traditional asset features like a store of value.
Caters to Investors Diverse Appetites
Labs enables investors to choose between different types of assets in the industry. For example, they can select residential, commercial, industrial, or hybrid and still choose their preferred location, risk levels, and ROI.
It Brings Blockchain and Digitization Together
By digitizing real-world assets, the project opens them up to trading on virtual exchanges that have no geographical limitations nor opening/closing times.
Other benefits birthed by the project are:
- Interaction with the DeFi scene and enabling decentralized governance.
- Ability to trade real estate securities.
- Faster and direct dividends payments
- Reduced and enhanced transactions.
Liquidity Provision On the Labs Network
- Tokenization – This helps power an asset-backed token ecosystem that lives on the blockchain enabling other activities such as over-the-counter trading and token swapping.
- Trading on the secondary market – Trading of Labs’ securities leverages recognized exchanges. Note that when shares are tokenized, they are traded on a securities exchange. Such asset trading platforms enable enhanced non-stop trading, positively impacting investors’ entry and exit points.
- Lending – Labs facilitates lending activities on the platform using two native assets; the Labs stable token, the Labs security token (more on these later). The protocol uses these tokens to address the liquidity problem by allowing their holders to engage in collateralized lending.
The Labs protocol has three base assets with distinct functionalities.
Labs utility token (LABS)
LABS is associated with primary functions on the platform. For example, its holders have a slot on the governance table. Some of the areas LABS holders have a voice include what investment is released, new additions, staking pools’ activities, and creating real estate projects.
In addition, the token gives its holders access to investments and incentives. Additionally, the base asset enables holders to suggest platforms with an investment bearing.
LABS’ total supply is 10 billion tokens. Their distribution includes 20% to investors, 5% to partners, 50% to the ecosystem, and 10% reserve.
Labs Security Token (ST)
ST represents ownership in virtual shares on the Labs protocol. Discounts from these investments are distributed using Tether (USDT) or the Labs stable token (USDL).
Labs Stable Token (USDL)
This is a collateralized token leveraging the platform’s security token. Notably, it has a 1:1 collateralization ratio with the US dollar.
By fractionalizing real estate assets, Labs eases the entry of retail investors into the industry. Consequently, it increases liquidity. Another critical Labs undertaking is digitizing these assets, effectively connecting the real estate market to the DeFi world.
In return, it opens up the space to more possibilities such as collateralized lending, over-the-counter trading, and swapping. Additionally, the inclusion of the LABS token drives community governance that is a crucial pillar in DeFi-focused protocols.
The information provided in this article is intended for general guidance and information purposes only. Contents of this article are under no circumstances intended to be considered as investment, business, legal or tax advice. We do not accept any responsibility for individual decisions made based on this article and we strongly encourage you to do your own research before taking any action. Although best efforts are made to ensure that all information provided herein is accurate and up to date, omissions, errors, or mistakes may occur.