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Deeds and real-world assets

What a Clear Deed is, how the protocol records a home or another real-world asset, and what subdividing and fractionalizing mean — in plain terms. The technical account is in the Deed track.

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The Clear Deed

The Clear Deed is the finish line for a member: a home title, free of debt, earned by being consistent. It is not a mortgage and it is not bought with a loan. Members work toward it with equity credits, earned by saving and by paying rent on time. How that works in the app is in Your Clear Deed.

The T-Deed

On the chain, a property is recorded as a T-Deed: a token issued by the DeedNFT contract. Each T-Deed stands for one asset and carries its record with it:

  • What kind of asset it is — see Asset types.
  • A definition: the description that identifies the asset, such as a parcel's legal description.
  • An operating agreement: a link to the agreement that governs it.
  • Its details: location, size, value sources and so on, as named fields.
  • Its validator, and whether it has been validated — see Validators.

A T-Deed can be transferred to someone else, though the contract can limit which marketplaces may handle it. Its owner can also give it up, which removes it and its record.

Where it stands. The Deed track runs on Base Sepolia, a test network, and has not been audited. Issuing T-Deeds for real properties: Not available yet. Turning a member's progress into a recorded Clear Deed in the app: Not available yet. See Status, security and licensing.

Asset types

DeedNFT supports four kinds of asset. Each has a page on what a validator checks.

Type
What it is
A validator checks for, by default
More
Land
A parcel of land
Country, state, county, parcel number, legal description
Land
Estate
Land with a building on it — a house, for example
The same as land
Estates
Vehicle
A car, truck or other vehicle
Make, model, year, VIN
Vehicles
Commercial equipment
Business machinery and equipment
Manufacturer, model, serial number, year
Commercial equipment

For every type, a validator by default also requires a definition and a recognised operating agreement. A home is recorded as land or as an estate.

Validators

A validator is the party that vouches for a T-Deed's record. Validators are registered in a registry, and each says which asset types it handles. When a T-Deed is created, a validator is chosen for it (or the default one is used), and the validator may charge a service fee for it.

When a validator reviews a T-Deed, the contract checks that the required details for its type are filled in and that its operating agreement is one the validator recognises, then marks the T-Deed valid or not valid. The contract can only check that the details are there. It cannot see county records or a vehicle register, so whether the details are true rests on the validator.

If the owner changes a T-Deed's details, it goes back to not validated until a validator reviews it again. A validator can change the details without that reset.

More: the validation system.

Subdividing

Subdividing splits one property into separate units, each with its own token. Think of lots in a parcel, or homes on one piece of land.

  • Only land and estates can be subdivided, and only once the T-Deed has been validated.
  • The owner sets how many units there are, then issues each unit to whoever should hold it. Each unit is unique: it stands for one particular part of the property, not a share of the whole.
  • Each unit can be validated on its own.
  • The T-Deed itself stays with its owner. The subdivision can only be closed once every unit that was issued has been given up by its holder, which is possible only while the owner allows it.

The contract is Subdivide; its units are ERC-1155 tokens. More: subdivision.

Fractionalizing

Fractionalizing locks one asset away and issues shares in it. The asset can be a whole T-Deed or a single subdivided unit.

  • The owner hands the asset to the Fractionalize contract, which holds it, and a new share token (a FractionToken) is created for it with a fixed maximum number of shares.
  • The person who locked the asset issues the shares, and can set a limit on how many any one wallet may hold. Shares can be passed on like other tokens.
  • To take the asset back out, someone must hold every share, or, by a second route, at least the percentage chosen when it was locked (51 to 100 percent). Unlocking cancels all the shares.
  • The contracts pay nothing to share holders. A share records part-ownership of the locked asset; it does not carry rent or any other payment.
  • The contract does not itself require the asset to be validated before it is locked; it lets anyone check whether it was.

The share tokens are ERC-20 tokens. More: fractionalization.

Contributing property

People who contribute land or property to Clear Properties, the co-op's property company, receive shares in that company. Those shares are not tokens, and no contract issues them; see Contributors.

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