RealT, the fractional tokenized real estate investment platform, has launched a Uniswap incentive program to drive new liquidity providers to their tokenized real estate offerings.
RealT is announcing the Uniswap Incentive Program!https://t.co/RcSGkld6dG…
Our newest property, 9336 Patton, is now available for exchange inside of @UniswapExchange
In order to increase liquidity, RealT is using an incentive system for LPs to the Patton Uniswap Exchange!
— RealT (@RealTPlatform) February 4, 2020
The real estate investment platform has deposited 15% of the supply from the 9336 Patton property into Uniswap. That 15% of the tokenized property, or 150 Patton Tokens, earn 83.35 Dai per month.
Normally, RealT retains a portion of every tokenized property offered on the platform, earning passive revenue from the properties on top of having assets on the company’s balance sheet.
Instead of keeping the earnings from the Patton property, RealT has elected to distribute the earnings pro-rata to liquidity providers who deposit tokens into the property’s Uniswap Liquidity Pool.
It is important to note that RealT’s tokenized properties are permissioned and only available to select individuals – primarily accredited US investors. All RealT’s tokenized properties are embedded with a whitelist of Ethereum addresses that can hold the tokens where any transfers to addresses not on the whitelist cannot be processed.
Liquidity Subsidies – A New Strategy?
RealT is not the first DeFi project to leverage subsidies for Uniswap Liquidity Providers. Synthetix, a synthetic asset issuance platform, was one of the pioneers for this type of incentive program.
By allocating a portion of the protocol’s native inflation, Synthetix is able to provide a fairly substantial boost on the return for its liquidity providers in the form of the SNX token. Since implementing this liquidity subsidy, Synthetix was able to drastically expand the liquidity for its sETH – ETH Uniswap Pool – a vital aspect to the success of the protocol at large. As it stands today, the sETH – ETH Uniswap pool is the largest in terms of total liquidity, boasting over $16M in total liquidity.
This is a powerful dynamic as liquidity providers can earn additional income on top of the 0.3% fee generated from Uniswap trades. Many DeFi tokens on the market should take note as liquidity tends to be an extremely important aspect to the success of their project and financial assets at large.
For RealT, liquidity providers to the Patton Uniswap Pool can earn revenues from three mechanisms:
- The 0.30% fee from all trades on Uniswap
- Rental Property Income from owning RealT Income (10.4% per year)
- Liquidity Subsidy from RealT’s share of the rental property (84 Dai per Month)
This is a step above Synthetix and an interesting dynamic for protocols where users can earn a passive income natively from the protocol on top of the exchange fees and the subsidy. As a high-level example, this would be similar to Compound subsidizes cDAI Uniswap Pools where liquidity providers could earn an income from the exchange fees, the liquidity subsidy and the interest from lending out Dai on its permissionless lending platform.
Key Takeaways
It will be interesting to see how the new liquidity subsidy to RealT’s tokenized properties affects the liquidity pool. Given that all of the tokenized properties operate on a whitelist and have limited availability to DeFi users, liquidity is already pretty low on all of their exchange pools. With that, the additional 84 DAI in monthly returns may be negligible for the majority of liquidity providers.
As of writing, RealT currently has four properties with Uniswap liquidity pools:
- 9943 Marlowe St, Detroit, MI: $21,560
- 16200 Fullerton Ave, Detroit, MI: $19,210
- 5942 Audubon Rd, Detroit, MI: $16,657
- 9336 Patton St, Detroit, MI: $11,650
With the 9336 Patton property having the lowest amount of total liquidity, we’ll keep a close eye on how the pool is affected with the addition of this new subsidy. If you’re interested in staying up to date with RealT developments, feel free to follow their official Twitter account.
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Director at Fitzner Blockchain Consulting. Lucas also has experience working with multiple blockchain-based startups as head of community, blockchain strategist and project manager where he focused on token economics, writing, and marketing.
