If you’re a cryptocurrency and VR enthusiast, you’ll be happy to know that you can now use your tokens to apply for mortgages on virtual land. This is all thanks to the partnership between an Ethereum-based VR platform, Decentraland and a global peer-to-peer network, Ripio Credit.
Decentraland is an Ethereum based decentralized application that offers a finite 3D world that represents non-fungible Ethereum tokens. Each segment is called LAND and it can be bought and sold in the marketplace provided by the platform. Developers have the power to build applications on their parcels with the SDK provided by Decentraland. After Decentraland is released fully, users will be able to explore the virtual world and interact fully with these applications.
While the goal hasn’t yet been fulfilled, investors and speculators have been pouring money into the project. This week, a single user bought a 126-parcel estate from the virtual world with $215, 000.
Decentraland And Ripio Team Up
This partnership with Ripio will prevent users from spending too much money on the virtual land at a given time. The CEO Ariel Meilich of the company, during a press release, said:
“Decentraland is a firm that is dedicated to creating a new virtual world on the blockchain. We want this world to be ruled by open standards and not controlled like centralized organizations. By joining forces with Ripio, we have shown that we are fully committed to our mission. Users can do exciting things on the platform free of centralization and hosted on one of the leading blockchain based credit systems”.
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The CEO of Ripio, Sebastian Serrano, said that his company decided to support the LAND mortgage system in a bid to explore a new aspect of the industry. The ethereum-based decentralized apps can help improve our services. In his words:
“The partnership between us and Decentraland is a typical example of how different blockchains can combine efforts to make something better. We, at RCN, focuses on borrowers and connect lenders. We are excited about expanding our services to the virtual world”.
How Virtual Mortgage Works
As a real estate buyer, you need to register with Decentraland for mortgage. The application process is rather short. You’ll need to make a minimum of 10% down payment. The loan request will subsequently be published allowing interest lenders to claim the mortgage.
As soon as a mortgage request is claimed, the platform will generate a smart contract to lock the transfer of ownership and the land parcel to the new owner. The owner can use the parcel for as long as the mortgage lasts. The new owner can also decide to claim full ownership of the smart contract. As a borrower, you can establish your RCN credit rating if you consistently pay off your mortgages when due. This will also give you the power to get more favorable interest rates later.
If the borrower makes it a habit of failing to meet up with mortgages, the lender can demand for a return of the mortgage using the smart contract. This will transfer full ownership to the lender. The borrower typically has seven days after expiration to pay up.