What Is Blocksquare Crypto and Is BST a Good Investment

Published: April 11, 2024 | Last Updated: April 11, 2024

Markos Koemtzopoulos

Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

In this post, I will explain what Blocksquare crypto is and how it works. I will then score Blocksquare’s BST token across four dimensions: team, product, tokenomics, and momentum to decide whether it is a good investment or not. 

what is blocksquare crypto

Why I researched BST

I decided to look into BST because it has a fixed supply with a high proportion of tokens already circulating. That, in addition to it being an RWA project, was enough to make me curious

What is Blocksquare? 

Blocksquare is a platform that facilitates the tokenization of real estate. It offers all the technical and legal tools required for tokenizing a property.

Real estate businesses can pay a license fee to Blocksquare and start using its white-label tokenization infrastructure to tokenize real estate assets in their area. For example, say you are a real estate company in Argentina. Using Blocksquare’s platform you can create your own website with your branding and logos and start tokenizing properties in your area. 

How does Blocksquare tokenize assets?

Blocksquare is built on Ethereum and helps tokenize any asset into 100,000 tokens. These tokens are called BSPT (BlockSquare Property Tokens) and are unique to each property. So, for example, one property might have 100K BSPT-xyz-123 tokens while another might have 100K BSPT-sxf-435 tokens. 

This way if you own 1000 tokens you own 1% of the property. 

Each asset has its own terms and conditions and if there is a yield you can extract in the form of rent then this is paid to you in your crypto wallet in the form of DAI, USDT, etc.

Why tokenize real estate? 

There are a few benefits to tokenizing real estate

  1. You bring liquidity to markets that have traditionally been very illiquid. For example how many people can afford to buy a $40Mn shopping mall? However, through tokenization, anyone with an internet connection can own a fraction of a shopping mall or office building. Investors of any size can now participate and bring liquidity to the market.
  2. Blocksquare’s vision is that investors are able to diversify their real estate portfolio. Traditionally most people save up enough to own a single real estate property. Through Blocksquare’s innovative approach, you can end up owning a diversified portfolio of 30 assets across geographies and asset types (housing, offices, shopping, etc). 
  3. You can start investing in real estate even when you are young and have a low income. For example, imagine a young couple who start saving for a downpayment on a home. By the time they have saved up their target amount housing prices have increased and they need to save some more. However, had they been able to purchase property tokens with their savings the value of those tokens would have appreciated in the meantime. This democratizes access to real estate opportunities.

Blocksquare’s operating system: how it tokenizes properties

To tokenize a property Blocksquare takes the following steps:

  • A Public Corporate Resolution is created and signed by shareholders of the issuing legal entity
  • The resolution is uploaded to the IPFS. The InterPlanetary File System is a protocol for storing and sharing data in a distributed file system. This means anyone can see the file but no one can tamper with it. 
  • The token’s smart contract points to the IPFS address where the resolution is stored. 
  • The resolution ensures that any revenue generated by the property is sent to the token holders. 

Blocksquare business model

Every sale involves a 1.5% fee. 

  • 0.5% goes to the platform operator
  • 0.5% goes to the issuing company i.e. real estate owners
  • and 0.5% goes to Blocksquare

Blocksquare marketplaces

At the time of writing Blocksquare has tokenized $80Mn in property value. The majority of this is through a decentralized protocol called Oceanpoint which currently lists 88 properties. However, Blocksquare has licensed its tech to 10 partners. Here are the 7 it lists on its site: 

What is BST? 

BST is an ERC-20 utility token with a maximum supply of 100Mn with a circulating supply of 46Mn.

BST tokens have the following uses:

Governance staking

  1. BST holders can stake BST to earn rewards in the form of additional BST. This will be distributed from rewards pools which make up 40% of the token’s supply. Rewards will be distributed over the next four years
  2. Once you stake BST you get sBST, a governance token, which you can use to vote on proposals about Oceanpoint. 

Marketplace operator discounts

  1. Marketplace operators can get discounts for staking BST. For every 10K staked BST, you get a 10% discount. So if you stake 100K BST you get a 100% discount. Some operators have done this and are effectively getting the software for free.

Asset pools: staking of real estate tokens

  1. BSPT Community: When you buy tokens of a property (BSPT) you can stake those tokens on Oceanpoint. In return, you get rewarded with BST. 
  2. BSPT Issuer: If you own a property you can issue tokens and stake them on Oceanpoint in return for BST

Liquidity pools staking

  1. You can join a liquidity pool on a decentralized exchange and earn rewards in BST.
  2. Oceanpoint is about to launch a stablecoin called POINT that will be backed by the real estate tokens people have staked on the protocol. This too will have a liquidity pool that rewards liquidity providers with BST.

Marketplace pools

  1. You will soon be able to support an investment marketplace of your choice with sBST. I have not understood the reward structure, to be honest, but I guess things will clear up when this feature launches. You can find out more about marketplace pools here.

At its core BST is a token that is associated with Oceanpoint rather than Blocksquare

BST Allocation

BST allocation

What is Oceanpoint?

Oceanpoint is the largest online marketplace for buying tokenized real estate using BlockSquare’s technology.  As Blocksquare’s DeFi protocol, it also wants to become the largest liquidity provider of real estate tokens. 

To do this it incentivizes people to 

  1. Tokenize their property and stake them on Oceanpoint. If you are a property owner you can tokenize your property and stake it on Oceanpoint to earn BST. At the end of the staking period, you can claim your tokens or you can sell them on a marketplace during which time you will need to start paying token holders any rent if applicable. The current yield in USD is about 22%
  2. Stake their BSPT tokens. 

When you stake your BSPT tokens with the Oceanpoint ecosystem you are giving them the right to earn any yield on your asset for which they reward you with BST. 

Think of it like this.

  1. You buy a house in the form of tokens
  2. You stake the tokens on Oceanpoint
  3. The rental income goes to Oceanpoint
  4. Oceanpoint uses the income to buy back BST from the market. 
  5. It then rewards you in BST based on a predefined formula. Currently, the reward is 125,000 BST* per month to those who have staked BSPT. 

* BST is paid to stakers out of the reward pool but once these funds run out they will start to buy BST on the open market. 

Does it make sense to stake my BSPT? 

Let’s look at an example

Say you own $100,000 worth of tokens which pay you 5% in rental income

If you stake with Oceanpoint you join a pool of tokenized assets. 

Oceanpoint pays out 125,000 BST per month. Say the total value staked is $5Mn and you staked $100,000. 

Then you receive 100K/5Mn=2% of BST which is 2500 BST which is $22,731 per year at the current BST price which is 20%. Compared to your 5% monthly yield this is looking pretty good. 

At the time of writing, there are only 200K worth of tokens staked in the community asset pool which yields 220% in USD. I am tempted to buy a pool of BSPT tokens and stake them. 

Is BST a good investment? 

To decide whether BST is a good investment I scored it across four dimensions

  • Team
  • Product
  • Tokenomics
  • Momentum

Team

1. Are the founders legit with related experience?     ✔️    

Blocksquare CEO Denis Petrovcic has a background in real estate and restaurants. His co-founder, Viktor Brajak, is a childhood friend of his and has a background in IT, and the third co-founder, Peter Merc is a Fintech & Crypto Lawyer, Managing Partner in a VC fund. It would be nice to have more information on the rest of the team and how many they are.

2. Have they built Web 3 projects before?    ✔️    

No

3. Did they do an exit?    ✔️    

No

4. Can you find legit profiles on LinkedIn?    ✔️    

Yes

5. Did they raise funds?    ✔️    

Investors include CV VC, the European Commission, and Blockchers. 15% of tokens are allocated towards investors. I was unable to find out how much they raised.

6. How long have they been around?    ✔️    

Launched in 2017

7. Public appearances through Interviews/podcasts    ✔️    

CEO makes frequent appearances in interviews plus they have a YouTube Channel with a lot of content

Overall team score: 80%

Product

1. Is it easy to understand what they do?     ✔️    

Yes

2. What is it?    –    

A blockchain-based real estate tokenization system that licenses the software to marketplace operators

3. Is there a demand for their product?     ✔️    

That’s what people tend to think. Remains to be seen

4. Is there a use case?    ✔️    

Yes Blocksquare’s solutions make it easy to own fractions of real estate

5. How big is the market?    ✔️    

About 700 trillion according to the CEO

6. Is it being used?     ✔️    

They have tokenized $80mn worth of real estate. However, most properties have 1 token holder (which I am speculating is BlockSquare themselves)

7. Github activity    –    

N/A

8. Has the product launched?    ✔️    

Yes, you can buy tokenized property on Oceanpoint. Other marketplaces are only just launching with 0-2 properties.

9. Does it have a strategic moat?     ✔️    

There is a network effect: if you KYC on one marketplace then you can access all marketplaces

10. Is it focused?    ✔️    

Blocksquare’s business model is pretty clear: sell software that enables tokenization. Oceanpoint which is the marketplace that Blocksquare curates does a million things and is scary to non-native crypto people

11. Is the website easy to understand for non-crypto visitors?    ✔️    

Pretty much. Oceanpoint took me a couple of days to figure out through

12. Do they have a proof of concept?    ✔️    

Investment platforms are live

13. Is the UX good?     ❌    

The marketplaces need to be made more appealing. For example, Oceanpoint only includes one photo of the outside of the property. 

14. Is it already being done?     –    

Yeah everyone is trying to tokenize real estate. In the US ReaT has been successful with about 100 mn in tokenized properties. But they are a single marketplace while Blocksquare is a white-label platform.

15. At what stage is the product?     –    

Oceanpoint is live. Other marketplaces are just getting started.

16. How does it create value?     –    

Allows anyone to tokenize real estate for their clients

17. How does the project generate revenue?    –    

Software Licensing fees. To run a marketplace you need to purchase a license.

Overall product score        80%

Tokenomics        

1. Why is the coin valuable?    ❌    

You don’t need BST to tokenize assets and you don’t need it to set up a marketplace. Unlike other RWA projects (See Propbase), you don’t even need BST to buy the tokenized properties. The strongest argument for BST having value is that Oceanpoint creates demand for BST by using the rental income from staked assets on its protocol to buy BST. But once this BST is rewarded to stakers they could just go and convert that to fiat. To discourage that Oceanpoint entices you to stake your BST which gives you voting rights and more yield. 

2. Did they do a pre-mine?    –    

yes there was a private sale

3. Is supply fixed or inflationary?    –    

Fixed at a max supply of 100Mn

4. Was it a fair launch    –    

No there was a private sale

5. Circulating/total supply    ❌    

46%

6. Token release schedule    ✔️    

40% of tokens are allocated to the team, investors, and mentors which is a bit much. However, their tokens have already been vested.

7. Are there incentives to reduce or lock supply?    ✔️    

Yes you can stake BST for rewards and voting

8. How many tokens    ✔️    

BST and a stablecoin called POINT which will be backed by the staked assets on Oceanpoint

9. How much upside is left: market cap vs industry size    ✔️    

$35Mn vs trillions

10. Is it listed on major exchanges    –    

BST is listed on second-tier exchanges such as MEXC and Gate.io as well as DEXs such as Uniswap. It is not listed on the top crypto exchanges yet. 

Overall tokenomics score        55%

Momentum

1. Is it trending on social media?    ✔️    

It’s picking up but still at low volumes compared to other projects

Lunarcrush BST
BST is trending on social media according to Lunarcrush.

2. Is the market cap low compared to similar projects?    ✔️    

Yes $35Mn is low for a quality RWA project like this

3. What is the crypto market like?     ✔️    

In the middle of a bull run

4. What is the sentiment for the sector this crypto focuses on    ✔️    

RWAs are hot

5. Are they marketing heavily?    –    

Yes

Overall momentum score        75%

Bottom line

Blocksquare is an award-winning company with a solid business model and team. If the real estate industry is on the cusp of a tokenization revolution then Blocksqure is well-positioned to make that a reality with its blockchain technology.

 The market cap is low for an RWA project and it’s picking up steam on social media. 

Despite the solution having been around since 2017 most properties are listed on one marketplace (Oceanpoint) while the other marketplaces are just getting started and piloting the product. My biggest question is why the BST token holds value. Yes, you can engineer a bunch of reasons to hold such as voting and staking rewards but I am not sure why BST is necessary for the product to work. 

As always none of the above is financial advice. Please make sure you do your own research. 

Resources

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Markos Koemtzopoulos is the founder and main writer of ElementalCrypto. He has been a lecturer at the University of Nicosia on cryptocurrencies and DeFi and has taught two courses on crypto and blockchain technology.

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