Decentralized Network Requests for Fractional Home Ownership Risk Sharing
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Solution Overview
Problem
Current methods for mitigating home buyer risk lead to higher interest rates for those in the highest risk classes, disproportionately burdening homeowners with less financial ability, increasing the likelihood of default.
Innovation Solution
An alternative risk model adjusts Minimum Retained Equity (MRE) instead of pricing, allowing impact investors to participate alongside return-oriented investors, and utilizes blockchain-based smart contracts for asset token transactions to facilitate fractional home ownership and risk sharing across various risk profiles.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional risk pricing methods are used to mitigate home buyer risk, then risk exposure is reduced for lenders, but interest rates increase for high-risk borrowers, creating financial burden and increasing default likelihood
Solution Approach 1:
The patent segments home ownership into fractional shares that can be independently traded on a blockchain platform. This segmentation allows risk to be distributed across multiple investors rather than concentrated in traditional mortgage lending, enabling high-risk borrowers to access ownership without bearing full financial burden while maintaining lender security through diversified investor pools
Solution Approach 2:
The patent introduces a blockchain-based fractional ownership platform as an intermediary between borrowers and investors. This intermediary enables risk sharing by allowing multiple investors to purchase fractional shares of properties, thereby distributing risk across the platform while providing borrowers with accessible ownership opportunities without traditional mortgage burden
2Adaptability or versatility
If fractional home ownership is enabled through blockchain smart contracts, then accessibility for non-accredited buyers is improved, but system complexity increases
Solution Approach 1:
The patent implements self-service through automated blockchain smart contracts that handle property fractionalization, investor onboarding, share trading, and profit distribution without manual intervention. This automation reduces the operational complexity burden on users while maintaining high adaptability and accessibility for non-accredited buyers through user-friendly interfaces
Solution Approach 2:
The patent creates a universal blockchain platform that serves multiple functions: fractional ownership creation, investor matching, secure transaction processing, automated profit distribution, and risk management. This multi-functional system achieves high adaptability across different property types and investor profiles while consolidating complexity into a single integrated platform
Data Source
AI summary
Methods and systems for transferring information, comprising: transmitting, by a first computing device of the first computing system, a first network function request to a decentralized network, the first network function request including first information; and transmitting, by a second computing device of the second computing system, a second network function request to the decentralized network, the second network function request including second information.