I would like to introduce you to eStratum, a real estate development fund established in Sydney Australia.
The explainer video on our website tells the full story, please check it out:
http://estratum.io/We started the idea in 2017 and got legal and accounting review in 2018. We decided that at the time being we would like to continue to do our developments as syndicates between people we know. We hope to be able to open up eStratum to the public in the future. You will not find the whitepaper on the website because we were not satisfied with the required legal and financial processes.
The reason for posting the video is that we would like to encourage others to embark on the same adventure. We believe very strongly in our model and there is no purpose in keeping it to ourselves if others can benefit while we continue to gear up for, hopefully, the next development.
Meanwhile, here are brief points how eStratum is different from other real estate ICOs, what it is and what it isn't:
- In this scheme, you the investor do not own anything in the development, you put money in the beginning and get the money back with profits as the units are sold.
- In this scheme, you do not get detailed information every second of where the project is at, when is the next batch of concrete going to be poured, no 3D BIM model for you to click on from an app in your phone. We do intend to issue monthly progress reports but that's it. There is a Chartered accountant reviewing every cent on each project and you will get your fair share of the profit at the end, all under the very clear eyes of the tax office. Basically you forget about your investment for about 18 months or so depending on the size of the development.
- Unlike other projects where the first to market is the winner, in our case we encourage everyone to use our proposed model so it becomes the new norm.
Here are some points still unresolved that prevent us from opening up investment opportunities to the public. We have sought two legal advice on the matter and we are not happy to proceed in the current legislative and financial framework:
- Both investor's privacy and storage of personal information were unresolved to our satisfaction. From legislative perspective, it was enough to prove that we have done something for KYC/AML, and that appeared to be solved by off-sourcing this activity to another entity in charge of verifying the investor. But we work in concrete and this solution seemed to us as someone brushing off a line in the legislation. This issue remains fundamentally unresolved from our perspective and we are watching the ICO space for a breakthrough. We will update our position when a real, concrete solution is available.
- We were unable to hedge the investors' funds against fluctuations. From our end, we know that we eventually need to get paid in Australian Dollars because that's what we pay our suppliers and contractors. We have solved this by procuring the services of a payment processor. But the value of the Australian Dollar has fluctuated very much lately, so unless you are putting in AUD at the beginning there is no guarantee that the AUD you will get at the end with profit will be worth more to you than your initial investment. Say for example you put in $1000 US at $0.70 USD / 1 AUD, and at project completion the exchange ratio is $0.60 USD / 1 AUD, you just lost 15% of your profit due to currency devaluation which is not under our control. On the other hand, we cannot take risk and keep the initial investments in their native crypto or fiat forms even though we do not need all the money from day one, because we need to determine the project's value and what are we going build (3-storey walk-up or 100 units multi-dwelling units).
- We could not get confirmation that the blockchain is indeed immutable if we are going to use it as the ledger. This has nothing to do with the probability of reversing the SHA-256 algorithm although Australia is on the leading edge in quantum computing. The issue is related to errors in programming. No programmer could give us the guarantee that after we issue the tokens, no one can discover a loophole in the ethereum blockchain and give themselves extra coins which are redeemable at the end of the project and therefore dilute other investors' shares. We cannot guarantee to the investors that a MathSafe 2.0 won't appear to be required to have been used and how their shared got diluted. There is even no guarantee we can give that whatever platform we chose, the developers and / or community behind that platform will not all move on to another platform (this is not something we can control).
- We could not find the right marketing skills and the right kind of support during ICO launch, even in crypto-related events / expos.
- Agencies have back flipped a number of times on their position over the same matters: we are here to help you became we are here ask and maybe we will help, then it became we cannot help you, then it became beware if you do this.
In summaryWe believe we can help the public make a profitable investment but we do not believe that robust-enough legislative and secure-enough technological frameworks, at least ones that are commonly, readily and / or easily available to us are there to take others with us on our journey.
We will provide a positive update when crowdfunding in Australia becomes more as simple as it should be.
Update 18-OCt-2018Thank you for the messages to translate the whitepaper to other languages. As per the above, we did not come to terms with the lawyers on how to implement this. We think it should be much simpler than proposed. We understand their concerns and hope the legislative framework will evolve to make it clearer for everyone on what is required.
Also thank you for the messages regarding listing the ICO on certain directories. As per the above, the only way eStratum was tailored for us is an IPO via a finanical institution, with practically nothing to do with crypto. This was the clearest message for us that we need to give the specialists some more time to adapt to the new frameworks. We will approach the ICO directories in due time.
