Trust3 Whitepaper
Trust3 Whitepaper
Trust3 Whitepaper
In the stagnant real estate landscape, integrating blockchain technology presents a transformative opportunity for
property investment and ownership. Existing tokenization models targeting US properties are high-risk investments
with a nebulous future depending on SEC lawsuits and regulations. trust3 emerges as a pioneering platform at the
intersection of blockchain and Triple Net (NNN) real estate. It offers a revolutionary approach to property
tokenization and fractionalized ownership by creating bespoke, ‘decentralized autonomous organizations’ (DAOs)
paired with Tenancy In Common (TIC) administration.
This whitepaper outlines the vision, technology, and business model implemented to democratize real estate
investment and redefine ownership paradigms. It includes an overview of the technical architecture that underpins
the platform, highlighting its robust security measures, compliance with regulatory standards, and interoperability
with existing blockchain ecosystems.
Profit-yielding investment properties are traditionally accessible only to select investors due to substantial capital
requirements and liquidity constraints. Traditionally solved using TIC laws, trust3 pairs digital distributed ownership
with RWA (Real World Assets) distributed ownership to solve inherent problems the other faces. Innovative use of
distributed ledger technology and other key token standards empowers communities by enabling collective
decision-making and management of property investments. trust3 utilizes smart contracts on the blockchain to
ensure transparency, security, and efficiency in property tokenization processes.
trust3 is at the forefront of a new era in real estate investment. By harnessing the power of cutting-edge technology,
trust3 offers a scalable, accessible, and efficient platform for property tokenization and fractionalized ownership.
This makes real estate investment more inclusive and empowers communities through DAOs.
trust3 invites investors, property owners, and blockchain enthusiasts to join the company in shaping the future of
ownership.
Trust3 Overview
Trust3 is an organization delivering premium real-estate assets to investors interested in exploring decentralized
token properties by means of a DAO. Our founding team combines seasoned veterans in real estate, technology,
venture capital, and blockchain technology. They recognized the convergence of trends towards decentralization,
digital assets, and real estate, culminating in the unique value proposition offered by Trust3.
The Trust3 platform will focus on decentralized offerings of Triple Net (NNN) commercial real estate properties.
The company is going to market with three NNN, cashflow-positive properties totaling over $100 million in appraisal
value. These properties are located in the United States and will be tokenized under fully compliant Wyoming DAO
LLC corporate structure. Following the successful tokenization, distribution, and management of the first three
assets, the platform will list and tokenize a number of other high-value real estate assets owned by individuals and
organizations within the founding team’s network.
The team aims to achieve the following short-term objectives for the company
Launch and establish the Trust3 platform as a premier marketplace for tokenized real estate asset
Develop a robust and user-friendly platform that ensures seamless tokenization and management of real estate assets
The following longterm objectives will be pursued through the growth and expansion phase of the project
Become a global leader in the tokenization of real estate assets, driving the mainstream adoption of decentralized finance in the real estate industr
Continuously innovate and enhance the platform's features to meet the evolving needs of investors and ensure a best-in-class user experienc
Collaborate with regulatory bodies and industry stakeholders to establish standards and guidelines for tokenized real estate investment
Market Analysis
A • G lobal Real state Market verview
E O
The global real estate market, valued in the trillions of dollars, is a cornerstone of economic stability and growth,
representing a significant portion of worldwide assets and wealth. It encompasses residential, commercial,
industrial, and land real estate, each segment exhibiting its own trends, challenges, and opportunities.
As urbanization continues, especially in emerging economies, the demand for all types of real estate is expected to
rise, driven by factors such as population growth, economic development, and the increasing need for infrastructure
and housing.
However, the global real estate market is not without its challenges and inefficiencies, which can hinder investment
and ownership opportunities.
Real estate investing typically requires substantial capital, making it difficult for average investors to participate. This
entry barrier is much higher for larger, more lucrative investments in commercial real estate or ‘Triple Net Properties’
(NNN). The high cost of entry limits market access to wealthy individuals and institutional investors, leaving a
significant portion of the population without the means to invest in real estate.
Expenses the Tenant is responsible for Single Net D ouble Net Triple Net Absolute Net
Created by David
from the Noun
Khai
Project
Created by
from the Noun
David Khai
Property Tax
Project
Building Insurance
The following longterm objectives will be pursued through the growth and expansion phase of the project
Become a global leader in the tokenization of real estate assets, driving the mainstream adoption of decentralized finance in the real estate industr
Continuously innovate and enhance the platform's features to meet the evolving needs of investors and ensure a best-in-class user experienc
Collaborate with regulatory bodies and industry stakeholders to establish standards and guidelines for tokenized real estate investment
Lack of Liquidity
Real estate assets are inherently illiquid compared to stocks, bonds, or even cryptocurrencies making it challenging
to quickly buy or sell properties without a substantial impact on their market value. This illiquidity can deter
investors seeking flexibility and quick access to their capital.
Geographical Limitations
Traditional real estate investment is often geographically constrained, limiting investors to local or national markets.
This restriction prevents diversification across different real estate markets and hampers the ability to capitalize on
global trends or target rapidly growing regional markets.
B
BBB
• How Can the Real Estate Market be Improved?
To make real estate investing more accessible, efficient, and equitable for all investors, the pain-points mentioned
Trust3 is building to meet these needs, with a foundation focused on these core principles and concepts, such as:
Improving Liquidity
Introducing platforms that facilitate the buying and selling of real estate or real estate-backed assets through digital
assets can enhance market liquidity, making it easier for investors to enter and exit positions.
Utilizing online platforms and blockchain technology can enable investors to easily access and invest in real estate
markets globally, fostering diversification and exposure to international growth opportunities .
Implementing decentralized autonomous organizations (DA s) for real estate management can streamline
O
operations, reduce costs, and align the interests of investors and managers through smart contracts and collective
decision-making processes .
Addressing these gaps requires innovative approaches and the adoption of new technologies, such as blockchain,
which Trust3 aims to leverage in order to transform the global real estate market, making it more accessible,
efficient, and aligned with the needs of modern investors.
C • Competitive Landscape
The concept of Real World Assets (RWA) and real estate tokenization, while not a novel idea, represents a
burgeoning market with immense potential that has yet to be fully harnessed. In the latter half of 2023 , the RWA
sector
BB within the blockchain industry attracted lots of speculative hype and attention from investors. Major
investment funds banks and investment funds are now looking to cash in on the promise of tokenizing ‘off-chain’
assets such as luxury goods, artwork, real estate, companies, and more.
The digital transformation of real estate assets into tokenized forms has opened up a new frontier for investment,
accessibility, and liquidity in the property market. However, the competitive landscape reveals that while several
players are vying to address the needs of this growing market, none have yet to fully capitalize on the vast
opportunities it presents.
Despite the diversity of solutions, common offerings among competitors typically involve some form of fractional
ownership, increased liquidity through secondary market trading, and the promise of lower barriers to entry for
investors.
While the aforementioned competitors have made strides in bringing real estate tokenization to the market, the full
potential of this area remains largely untapped.
Regulatory Navigation
The complexity of navigating regulatory environments across different jurisdictions has been a significant hurdle,
slowing down the adoption and scaling of real estate tokenization solutions.
While the technical capabilities of blockchain are advancing rapidly, the seemingly unfriendly regulatory climate for
securities and digital assets around the world has led most investors to believe that we are currently early to the real
estate tokenization party.
Technology
BB Integration
The integration of advanced blockchain technologies, including smart contracts and DAOs for property
management and governance, is still in its nascent stages. The ability to seamlessly merge these technologies with
traditional real estate processes has yet to be fully realized.
Furthermore, current offerings are needlessly overcomplicated and geared towards blockchain-savvy individuals,
while ignoring the needs of the common investor.
Overcoming skepticism and building trust in digital assets as a legitimate and secure form of investment is crucial
for widespread acceptance.
Given the landscape, Trust3 is positioned to differentiate itself by addressing these gaps and capitalizing on the
untapped potential of the real estate tokenization market. Trust3's approach can focus on offering a globally
accessible platform that simplifies regulatory compliance, leverages cutting-edge blockchain technology for
seamless integration, and prioritizes market education to build trust and adoption.
Furthermore, Trust3 can lead the way in establishing interoperability standards and fostering a vibrant ecosystem for
tokenized real estate assets. Trust3 is also aiming to place an emphasis on tokenizing commercial real estate and
NNN properties that were previously inaccessible to regular, everyday retail investors. With a pipeline of impressive
properties, Trust3 is in an advantageous position to overshadow the current tokenized real estate marketplace
platform space. In conclusion, while the competition in the real estate tokenization space signifies a growing
BB
interest and investment in this innovative approach, the journey to fully unlocking its potential is still underway.
Trust3 has the opportunity to spearhead this evolution by delivering comprehensive, accessible, and technologically
advanced solutions that meet the market's needs and exceed the offerings of current competitors, especially in the
sphere of commercial real estate and NNN properties.
All properties listed are debt-free and cashflow positive, holding long-term leases with the tenants. This offers a low-
risk investment that generates actual income for any token holder.
Commercial real estate owners that tokenize their properties are granted an avenue to extract some capital from a
traditionally illiquid asset in a secure and compliant manner.
All properties undergo the same tokenization process, where a DAO corporate entity is established, funds are raised
to purchase the property, and ownership is transferred to the DAO through the trust3 platform.
Tokenized
property
property owner
submits loa
Investors become DAO members
for tokenization property dao
Request
Investors deposit liquidity in escrow contract
Liquidity released to original owner
trust3's platform is built on a robust, scalable, and secure architecture that leverages cutting-edge blockchain
technology to enable seamless real estate tokenization and decentralized governance. The platform's key
components include:
Blockchain Infrastructure
trust3 utilizes a permissioned blockchain network to ensure high transaction throughput, low latency, and enhanced security
The platform is designed to be interoperable with leading blockchain networks, such as Ethereum and Binance Smart Chain,
Smart Contracts
trust3 employs customizable and audited smart contracts to automate the tokenization process, ensure transparency, and
The smart contracts handle various aspects of the platform, including token issuance, distribution, and governance.
trust3 enables the creation and management of property-specific DAOs, which serve as the governing bodies for tokenized
The DAOs are powered by smart contracts that define voting rights, proposal mechanisms, and decision-making processes,
Token Standards
The platform adheres to industry-standard token specifications, such as ERC-20 and ERC-721, to ensure compatibility and
trust3 also explores the use of advanced token standards, like ERC-1400, to support compliance, restrictions, and asset-
specific requirements.
trust3 integrates with secure, user-friendly digital wallets to facilitate the storage and management of tokenized real estate
assets
The platform supports both custodial and non-custodial wallet solutions, catering to the diverse needs and preferences of
investors.
Oracle Services
trust3 incorporates trusted oracle services to bridge the gap between off-chain data (e.g., property valuations, rental income)
Oracles ensure that the platform has access to reliable, real-time data for accurate asset valuations and distributions.
The platform exposes a comprehensive API and provides SDKs in popular programming languages to enable seamless
This allows for the development of a vibrant ecosystem around the trust3 platform, fostering innovation and customization.
trust3's platform is built on a robust, scalable, and secure architecture that leverages cutting-edge blockchain
technology to enable seamless real estate tokenization and decentralized governance. The platform's key
components include:
trust3's platform is built on a robust, scalable, and secure architecture that leverages cutting-edge blockchain
technology to enable seamless real estate tokenization and decentralized governance. The platform's key
components include:
Property Onboarding
Property owners interested in tokenizing their real estate assets undergo a comprehensive onboarding process, which
trust3's team of experts works closely with property owners to ensure all requirements are met before the tokenization process
begins.
Token Issuance
Once a property is approved for tokenization, trust3 creates a unique smart contract that represents the asset and defines the
token's attributes, such as total supply, fractional ownership structure, and governance rights
The tokens are then issued on the trust3 platform, with each token representing a fractional ownership stake in the underlying
trust3 conducts an Initial Token Offering (ITO) for the newly tokenized property, allowing investors to purchase tokens and
The ITO process is streamlined and user-friendly, with clear documentation and guidelines to ensure a frictionless investment
experience.
DAO Formation
Upon the successful completion of the ITO, a Decentralized Autonomous Organization (DAO) is formed to govern the
tokenized property
Each token holder becomes a member of the DAO, with voting rights proportional to their token ownership.
Governance Mechanisms
The DAO operates based on predefined governance mechanisms, which are encoded in the smart contracts
These mechanisms include proposal creation, voting processes, quorum requirements, and execution of approved decisions
Token holders can participate in the governance process by proposing changes, voting on proposals, and engaging in
All governance activities, including proposals, votes, and decisions, are recorded on the blockchain, ensuring transparency
and immutability
The trust3 platform provides intuitive dashboards and tools for token holders to monitor the performance of their investments
Revenue Distribution
The smart contracts automatically handle the distribution of rental income or other revenue generated by the tokenized
This process ensures timely and accurate distributions, eliminating the need for manual intervention and reducing the risk of
errors or disputes.
trust3 enables the creation of a secondary market for tokenized real estate assets, allowing token holders to buy, sell, or trade
The platform ensures compliance with applicable securities regulations and provides a secure and efficient trading
environment.
trust3's platform is built on a robust, scalable, and secure architecture that leverages cutting-edge blockchain
technology to enable seamless real estate tokenization and decentralized governance. The platform's key
components include:
trust3's platform is built on a robust, scalable, and secure architecture that leverages cutting-edge blockchain
technology to enable seamless real estate tokenization and decentralized governance. The platform's key
components include:
trust3 provides a user-friendly interface and streamlined process for creating and deploying property-specific DAOs
Property owners can easily set up a DAO by providing the necessary information, such as property details, governance
The platform automatically generates the required smart contracts and infrastructure, reducing the technical complexity and
trust3's DCaaS solution offers a range of customizable governance models, allowing property owners to tailor the DAO's
Governance models can include simple majority voting, weighted voting based on token ownership, multi-signature schemes,
The platform provides guidance and recommendations to help property owners choose the most suitable governance model
trust3 ensures that the DAOs created through its DCaaS solution are compliant with relevant legal and regulatory
requirements
The platform incorporates necessary KYC/AML processes, accredited investor checks, and other compliance measures into
trust3 works with legal experts to provide standardized legal templates and guidelines for DAO formation, helping property
trust3's DCaaS solution is built on an upgradable and modular architecture, allowing for the easy integration of new features,
As the legal and regulatory landscape evolves, trust3 can adapt its DCaaS offering to ensure ongoing compliance and provide
trust3's DCaaS solution comes with a suite of integrated tools and services to facilitate seamless DAO management and
operation
These tools include investor onboarding and communication platforms, proposal and voting interfaces, financial reporting and
The platform also offers integration with popular collaboration and project management tools to streamline DAO-related
trust3 provides comprehensive educational resources and support to help property owners and investors understand the
The platform offers guides, tutorials, and best practices for creating and managing successful property-specific DAOs
trust3's team of experts is available to provide personalized support and guidance throughout the DAO creation and
management process.
By offering DAO Creation as a Service, trust3 lowers the barriers to entry for property owners and investors looking to
harness the power of decentralized governance for their tokenized real estate assets. The platform's turnkey solution,
customizable governance models, and integrated tools and services make it easy for anyone to create and manage a
property-specific DAO, unlocking new opportunities for collaboration, transparency, and efficiency in the real estate industry.
D • trust3 Benefits
trust3 offers a range of compelling benefits for both property owners and users of the platform,
revolutionizing the way real estate assets are owned, managed, and traded.
Increased Liquidity
By tokenizing their real estate assets, property owners can unlock previously illiquid equity and access a global pool of
investors
Tokenization enables the fractional ownership of properties, making it easier for owners to sell a portion of their assets without
Access to Capital
trust3's tokenization process allows property owners to raise capital more efficiently by offering fractional ownership to a
This access to capital can be used for property improvements, portfolio expansion, or other business needs.
Tokenization on the trust3 platform streamlines the traditional real estate transaction process, reducing costs associated with
Smart contracts automate various aspects of the transaction process, further reducing operational costs and increasing
efficiency.
Retained Control
Property owners can maintain a significant degree of control over their tokenized assets through the DAO governance
structure
By participating in the decision-making process and retaining a portion of the tokens, owners can ensure that their interests
Enhanced Transparency
trust3's blockchain-based platform ensures transparency in all transactions and governance activities related to the tokenized
property
Property owners benefit from increased trust and confidence among investors, as all actions are recorded on an immutable
ledger.
trust3 lowers the barriers to entry for real estate investment by enabling fractional ownership through tokenization
Users can invest in high-quality real estate assets with smaller amounts of capital, democratizing access to a traditionally
Diversification
The platform allows users to easily diversify their real estate investment portfolio by investing in multiple tokenized properties
This diversification helps mitigate risk and optimize returns for investors.
trust3's use of blockchain technology ensures that all transactions and ownership records are transparent, immutable, and
secure
Investors can have confidence in the integrity of their investments and the platform's governance processes.
Tokenization enables the creation of a secondary market for real estate assets, providing investors with increased liquidity
Users can easily buy, sell, or trade their tokens on the trust3 platform, allowing for greater flexibility in managing their
investment portfolios.
Participation in Governance
As token holders, users have the opportunity to actively participate in the governance of the tokenized properties through the
DAO structure
This participation allows investors to have a say in key property decisions, such as rental rates, property improvements, and
dividend distributions.
By investing in tokenized real estate through trust3, users can potentially earn higher returns compared to traditional real
The platform's focus on high-quality, income-generating properties and the efficiency gains from tokenization contribute to
Business Model
The trust3 business model is rooted in tokenization services for commercial real estate, creating a frictionless
experience for everything that follows. The platform offers three primary products that tackle widespread
A — Tokenization Fees
Real estate tokenization will aggregate seller fees and offer a competitive alternative based on current industry
averages, eliminating the need to pay for additional services. The platform accepts a 2-3% aggregate fee from the
tokenization of a commercial real estate property. This aggregate fee offsets traditional structures that include agent
fees, closing fees, commissions, and escrow fees. The platform automates all these services, allowing property
owners to sell a part or all of their property to investors while saving upfront costs.
Fees are paid to the platform in the form of an aggregate service fee, which is taken from the total liquidity raised for
the property, and a closing fee, which is taken from a portion of the token equity representing ownership of the
property.
commissions
service fees
VS
closing fees
tr
estate fee total
1.0 - 2.0%
4-8% fiat 2-3% fiat
escro w services
total fees
Each tokenized property on the trust3 platform is a Triple Net (NNN), cashflow-positive business that generates
reliable revenue. The lessees are responsible for all management expenses aside from structural building
maintenance, meaning little monthly cost to the DAO for property management fees. The platform allocates a small
portion of this income into the DAO treasury to accumulate funds for future expenses that the DAO may incur.
The platform’s automated yield management feature charges a fee to facilitate the distribution of revenue from the
lessee to individual DAO members. The fees offset the company's costs for using crypto-to-fiat offramps.
property lessee
Property revenues
Yield management fees (2%) Treasury deposits
To en older distri utions
k h b
The additional properties are transferred into the DAO’s ownership and are subject to split between DAO token
holders. Therefore, the additional property is not being further tokenized, and the acquisition is subject to traditional
commercial real estate fees. The trust3 platform facilitates this purchase with agents, property managers, etc., and
takes a fee to facilitate this transaction.
Additionally, income generated by this property is subject to management fees in the same structure as the original
tokenized property.
sellers L isting P P TY
$ RO ER
marketplace
sellers Buying P P TY
$ RO ER
buyers
Transa tion fees in at or P P TY
c fi $ RO ER
R ce eiving iat
F Paying iat
F
trust3
sellers
plat orm f
These secondary sales allow trust3 to facilitate secure and frictionless transactions for individuals unfamiliar with
self-custodial infrastructure such as Metamask wallets or decentralized exchanges. trust3 charges a transaction fee
to facilitate these sales.
trust3's legal structure and compliance strategy are meticulously designed to align with current regulatory
frameworks governing digital assets and real estate investments. Central to this approach is establishing a robust
legal foundation that not only adheres to but anticipates changes in legislation related to blockchain and
tokenization. By proactively engaging with regulatory bodies and leveraging legal expertise in securities, real estate
law, and digital assets, trust3 ensures continuous compliance. This strategy includes regular audits, transparent
communication with stakeholders, and adaptive measures to address evolving legal standards, ensuring trust3's
operations remain within the bounds of regulatory requirements while fostering innovation in real estate investment.
Addressing the regulatory challenges in tokenization involves navigating the complexities of securities laws and
ensuring compliance with financial regulations. trust3 proactively collaborates with regulatory authorities to clarify
the status of tokenized real estate assets and implements rigorous compliance protocols. This includes conducting
thorough legal analyses to structure tokens that meet the criteria for non-securities or comply with securities
regulations when necessary. By staying at the forefront of legal developments and employing a compliance-first
approach, trust3 ensures that its tokenization practices align with current regulatory standards, safeguarding both
the platform and its investors.
trust3 prioritizes protecting investor data and privacy, implementing state-of-the-art security measures in line with
global standards, such as GDPR and CCPA. The platform employs encryption, anonymization, and secure data
storage practices to safeguard personal and financial information. Regular security audits and compliance checks
ensure that data protection measures are continuously updated and effective, maintaining the trust and
confidentiality that investors expect from a leading blockchain real estate investment platform.
A real estate mogul primarily based in the United States, John actively