In the below video Andrew Forson, Empowa’s Head of Quantitative Analytics and Risk, outlines the role of the EMP token in underwriting the capital needed to address the backlog of 50 million affordable homes across the African continent.
We encourage you to watch his full explanation, but for those who prefer a written summary of the video you can find that below the video.
The EMP token is an exciting project that has garnered a lot of attention in the Web3 community. Early adopters of this token were essential contributors to the project’s success. However, it is essential for the community to understand how the entire approach works, from the token to the homeowner, and how it impacts the actual demand and utility of the token.
The Empowa ecosystem has several participants, with the main beneficiary being the potential homeowner. Along the way, several things happen in the continuum from the homeowner to the token holder. The homeowner interacts with a developer who needs access to capital to build the home. To gain access to capital, the developer needs to prove that the homeowner can pay for the home.
Empower is an entity that the developer communicates with when they require capital. Empower goes through a process of defining with the developer what the capital needs are, what the projected returns are, how many units are going to be built, etc. Once that is done, Empower has to find a way of attracting capital from a variety of sources, including institutional investors.
Empower can be viewed as an underwriting platform that goes to institutional investors and gives them a package that they’re going to be comfortable putting their money into. For those outside the Web3 community, these packages are known as NFTs, which are not just an artistic product. They are effectively a contract for a portion of a loan that has very specific repayment clauses and terms.
The Empower NFTs are referred to as SDRIs (Secured Defined Return Instrument). As an instrument, it mimics the properties of a bond, making it easy to explain to financial counterparties what the project is doing. The beauty of this is that once it can be explained as a bond, the platform can mint these instruments in the quantities needed for the capital raise that is required, reducing costs by leveraging Web3 technology.
Another piece of the pie that the project has to deal with is collateral. In many countries, getting a lien on an asset is incredibly time-consuming and costly. In some instances, it’s impossible because there are rules that prevent foreigners from holding title and deed to certain properties. To solve this problem, the idea of using the EMP token as collateral was born. The EMP token now represents a unit of a house, making it unique and facilitating its use in the financing of these projects.
The EMP token is a unique project that has the potential to revolutionize the world of property development financing. The process flow from the token to the homeowner is quite straightforward, and the use of NFTs and EMP tokens as collateral makes it a truly innovative project. The project’s success is dependent on the community’s understanding of the process and how it impacts the demand and utility of the token.
If you would like to find out more about the above approach check out the full video series explaining the Empowa Blackpaper here or visit the Empowa website at Empowa.io/blackpaper.