Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Russell McLernon & Stephen King: RexMLS – Disrupting Real Estate with a Decentralized MLS

Episode Date: August 22, 2016

One of the sectors which is ripe for disruption is the real estate industry. In the US for instance, a handful of historic and very powerful players operate what is known as MLS, or Multiple Listing Services, and hold unofficial monopolies on residential and commercial real estate listings. Brokers, who depend on these listing services to sell properties, agree that their incumbent positions have created a situation where fees have continued to rise, while little to no added value has been added for their users. Stephen King and Russel McLernon join us to explain RexMLS, a decentralized Multiple Listing Service built on Ethereum and IPFS. Currently in beta, the DApp would allow brokers to list properties at a very low cost, and be accessible to international markets, something which is lacking in the current model. Topics covered in this episode: The basics of MLS or Multiple Listing Services What is RexMLS and the problems it is trying to address The benefits of a decentralized MLS The different technical components of RexMLS Why they chose Ethereum and IPFS The user experience of RexMLS The product’s roll-out phases How users are incentivized to participate in the system The RexDex token exchange and the token injection model RexMLS’s governance model Episode links: RexMLS Website RexMLS Beta RexMLS White Paper This episode is hosted by Meher Roy and Sébastien Couture. Show notes and listening options: epicenter.tv/145

This is Epicenter Bitcoin, episode 145 with guests, Stephen King and Russell McLernan. This episode of Epicenter Bitcoin is brought to by Jax. Jacks is the user-friendly wallet that works across all your devices and handles both Bitcoin and Ether. Go to JAAWX.I.O and embrace the future of cryptocurrency wallets. Hi, welcome to Epcenter Bitcoin, the show which talks about the technologies, startups, and projects driving decentralization and the global blockchain revolution. My name is Sebastnik with you. And I'm Meheroy. Today we'll be exploring a very special niche or ecosystem of blockchain technology. We'll be exploring the intersection of real estate and blockchains.

We are joined by Stephen and Russell, who are building Rex MLS. So MLS stands for multiple listing system. We'll get into what this is. But it's one of the first projects that really pioneer how block. Chains can change the real estate industry. So we thought it was a really interesting project to cover. Before we start, let's have an introduction from Russell and Stephen. So Russell, you go first. Yeah, thanks for having us.

Look, I've been in the crypto currency scene for the last five or so years and working with Bitcoin and moving on to Ripple and BitShare's. and next and now Ethereum. And, yeah, Ethereum addresses some of the shortcomings that these other platforms have had. And, yeah, I'm really excited to be building Rex on Ethereum and achieving what we want to achieve. Cool. And Stephen, a bit about your background.

Sure. Yeah, thanks guys for having us. My background is in commercial real estate. I've been in it for about five years now. I run King Realty Group here in New Jersey, and I do deals throughout the United States. I've been involved in some development work as well. And I've worked on some technology startups, which has actually led me into Ethereum, and I am the founder of Princeton Ethereum Meetup.

Rex MLS, as I said, is one of the first projects I came across that really merges blockchain technology and the real estate side. Now, most probably the real estate site won't be well known to our listeners. So let's get into what an MLS really is. So could you explain what is an MLS and what is it used for? Sure. So a multiple listing service is essentially a large database that disseminates real estate information. and the information is sourced and then sold back to the brokerage community. It also helps facilitate contracts, broker cooperation, and sometimes helps with appraisals.

But the abstract that it provides of the property are basically the price, the location, the size, or the occupancy of the building, and the operating expenses. There are three segments. There's commercial, which we're focused on to start. There's residential and there's multifamily. How long of MLS system's been around for? They've been around since the 1800s. A bunch of guys got in a room and basically, at least in North America, it was down in D.C.

And it was a way of help me sell mine and I'll help you sell yours. but it's matured to where over the years, you know, as technology developed, a couple of different companies created platforms to disseminate the information on a much broader basis. And some of the large companies in North America are, in the commercial industry, are Co-Star and LoopNet, and on the residential side, are Zillow and Trulia, and then there's local multiple listing services, which are state-by-state, and they're owned by independent brokerage houses. A lot of the multifamily platforms are owned by most of the residential guys.

And so in the real estate industry, how much power do these systems, these MLS systems, have? What is their impact on the real estate industry? It's quite significant. So, Costar was started in the 80s by a guy named Andy Florence, and he's a business guy, started a technology company, and his business model is simple. He's got a slew of researchers that contact different brokerage houses, obtain their listing information, and then publish it on their platform. And they've made significant traction, and they're able to charge $3,500 a year per certificate.

So this leads to two problems. One, if you're a large brokerage house and you have multiple brokers and you want to use more than one computer to basically access this information, it gets quite expensive. And it also affects the small to medium-sized brokerage houses because it adds significantly to their overhead. Now, like I said, they've been around since the 80s, so they've been able to make traction. Their one competitor that made traction as well was LoopNet. LoopNet, their paywall was much lower than CoStar, and that they charged. about $160 a month to access their data. And it was more of an open system.

It wasn't just brokers. It was mom and pop retailers and office users. But what happened about 12 months ago, co-star bought LoopNet. And LoopNet has been a mess ever since. And they're actually in talks right now about raising their prices by 60% in the next 12 months, which makes, it gives them,

I'm surprised it got through the regulatory process in the United States, but it made, they basically have an, unofficial monopoly. Is that, is that right, that Kostar still gathers all this data manually, right? And then feeds it into their own MLS system and then sells access to this database to all parties interested in it. Yeah, so they, I mean, I'll get calls from Kostar once or twice a week and they'll be looking

for not only listing information, but deal information. So they'll want to know, you know, hey, what deal did you close? over at X, you know, address. So they want to know how long the lease was, who the tenant is, the economics involved, and then they publish that. They sell that to other brokers on their platform. And the problem with that is the information has become unreliable because no intelligent broker is going to give correct information.

Because if they do that, if they say, well, I just did a deal for a five-year lease and they publish that on their website, another broker is going to call that tenant in four years and say, hey, I know your lease is up in another year, and I've got a property across the street, and I can save you 20% on your rent. So a lot of the brokers have realized that they're doing this and have just given either little or just bad information.

So with this bad information, how does this system still work? why does it work if the brokers are themselves not incentivized to give correct information? It works because they have scale and because there's nothing else out there that you can turn to quickly and find this information. So before the internet, Black Sky and a couple of other companies published a biannual report of information. They had CoStar's model, but they just published it in a book. And CoStar, they had been able to make this information, more relevant than it was back then. So if a guy wants to, if a broker wants to go and find 10,000 feet,

they don't want to search across multiple platforms to do that and make multiple calls. They want to just look at one database, see what's available, and then call the listing agent and obtain more information. They don't, they're not in the, all they want to do is find the space and do the deal. They don't want to be bothered by navigating or finding new information. it's sort of this closed system that hasn't changed, and a lot of companies have tried to disrupt this with conventional technology, and they're not able to get the traction that Kostar has. Well, that was my next question. So, I mean, in sort of banking and finance, we're seeing, you know,

all these fintech startups come in and try to disrupt large banks and financial institutions. Are we saying this same kind of trend in real estate? Is that also happening in real estate to try to disrupt these large? monopolies, essentially? I would say, so real estate is the last industry, typically, to get on board with new technology. They, you know, typically developers want to develop and brokers want to just find and source and do deals. However, the costs have gotten exponentially higher over the last five, six, seven, eight years. So when we started talking about Rex, we went to a couple of conferences, one which is the international real estate blockchain conference run out in Newport.

And it's interesting to us because the real estate community is excited about what we're trying to do because they realize that it's going to disrupt the existing systems in a way that will benefit the end user and will free up the information. So, CoStar has obviously, they pissed off the community enough where a lot of these, a lot of the development in the brokerage community are, yeah, they are. They wanted to see it disrupted, which is an interesting sign for me being in the business because, like I said, a lot of these guys are, you know, they're not technologically advanced like some of these other industries. So what you're proposing is a decentralized MLS system that you call Rex MLS. What excites you about building a decentralized MLS system? Well, there's a couple things. So Ethereum in particular gives us the opportunity to mesh together the blockchain, data distribution, and currency all under one roof. And that's important because the blockchain basically gives us, it helps us timestamp transactions,

and it keeps a reliable track record of the transactions. The data distribution, we're using IPFS, and Russell talk more about this, but it's basically, it makes the data that we're trying to obtain exponentially cheaper across the board, and it'll basically be free, and this information should be free. And currency we're able to use through Ethereum, and that'll help fuel our platform. And the other thing that it's helping is right now there's no universal system. So there's no global system where a guy in China who wants to buy an investment property in New York can access or do some research on his own before he calls his broker.

He's got to find out what the local system is in New York. And on a residential basis, it's even worse because it's on a state-by-state basis. It's not even across international borders. So to get that information, you have to pay. for each individual multiple listing service on a very local level. So it brings everything together for us and it opens up, it opens up this closed system. What is sort of the potential advantages that you see for brokers? I mean, obviously, you know, there's cost cutting, right?

As you described in the white paper, these multiple listing services charge quite a lot to have listings, you know, set up as premium, you know, so that they can be visible, et cetera, aside from having the cost of listings go down dramatically, what other advantages can you see for a system like this? Well, so there's a couple of different advantages. The first and foremost is that we're bringing all this data into one place. So right now, commercial and residential and basically commercial and residential are separated.

And we're going to bring them together under one roof. So nowadays, commercial guys are doing residential deals and residential guys are doing commercial deals. They're not two completely different industries. They are, but they're starting to commingle. So that's one benefit. The other benefit is that the cost, obviously, what you mentioned, will go down significantly.

And we're going to initially pay the brokerage community or anybody for that matter to upload listings to Rex and especially verified listings. And that turns the tide the other way in that instead of taking money from the community, we're actually paying you to obtain that information. And what's interesting about that is not only have we gotten, we've held a few meetings with people throughout the country in the real estate community who have gotten excited about that idea. and even people that aren't in the real estate community who are like, hey, I live in Minneapolis or I live in Singapore,

if I know the local market and I've got a property or if I'm a landlord, can I upload that and get paid as well? Which is something that Russ and I didn't think about. We said, sure, of course you can. That sounds really interesting because one of my questions was, if you're assuming that like Kostar basically does manual data gathering from all the brokers, and how would you bring all of the data into your platform? So right now I'm assuming that RECS MLS is essentially like a decentralized database. That's the imagination that comes to my mind, that you have records about properties,

you might have certain fields in each of these records that record, what kind of property it is, etc., where it is, etc., and all of these records are stored inside IPFS. Is that correct? What are the basic components of your technical architecture? Yeah, that's correct. So we are storing the records in IPFS, and I don't know if you've heard of the Kappa infrastructure model, where it's a append-only style of database where each user creates a new record that,

that is added on top of the previous records. There's an example of a system out there at the moment called Patchwork, which is doing this for a social network, and it's working really well. We investigated using this CAPA infrastructure, and it's ideally suited for smaller scale projects, I believe. We've got smaller social networks. It works great.

But when you start to scale to hundreds of thousands of users, it can be hard to keep track of, you know, where each user is up to. So we've continued that approach with the Kappa infrastructure, but we have merged it with Ethereum and we are using Ethereum to timestamp when these users are, you know, appending to their log. So we can go to one place, we can go to Ethereum,

and we can say, give me the hash of the state of the database right now, and it will there, and we can then straight away see, you know, where each of these users append only log is up to. So IPFS is basically, we're storing all of these, user's state in IPFS and we're using Ethereum to merge it altogether and get a quick glimpse of where the entire system is at. Let's take a short break to talk about Jacks. Jacks is a multi-coin wallet created by the people at the Central.

Now in the past if he had a whole bunch of cryptocurrencies, it was a pain to handle them. You either had to leave them on an exchange, which was insecure, or you had to have all these different wallets, which was a hassle. Fortunately, now with Jacks, those medieval days of darkness, misery, and suffering are over. Jack supports multiple cryptocurrencies and new ones are being added. But it's not just storing cryptocurrencies you can do with Jacks, but you can also exchange them directly from within side the wallet thanks to their shape-shift integration. And since there's only one seed, Jacks makes it super easy to back up and sync to the other

devices. Jaxx works with Windows, MacOS, Linux, Android, iOS, and has browser extensions for Firefox and Chrome. So go to jacks.io, that's J-A-A-DoubleX.io, to download the wallet and get started today. We'd like to thank Jax for the support of Epicenter. Let's imagine me as a broker, right? Now, when I enter, so I open up the DAP, I make a listing, So I say somebody, let's say somebody came to me and said, he wants to rent out this particular commercial property, that commercial property has a certain set of parameters, and I want to search for a counterparty for this person. So I create a listing and I list this data.

Where does this data go? Like what happens after that and how is the hash in Ethereum finally updated? What's the flow from from this point to the final? point. Yeah, so obviously all the complexities are hidden from the user and the user interface, but they will basically type in all their parameters and the information about the listing. It will go and create an IPFS, Merkle Dag object, get a hash for it, and it will do some housekeeping behind the scenes of that user's state and it'll log down what their last state was, what their new state is. And it will add that new hash to the top of the list and then you'll get a master hash,

which is basically a summary of all that information or bundled up into one hash. And then it will create an Ethereum transaction, which will submit that hash into the Ethereum blockchain and it raises a log, you know, an event log for it. And then basically the Rex MLS system subscribes to that event log. And every time a new hash comes in, it basically then goes and asks IPFS, okay, give me that hash, give me the content for that hash, and basically drills down and downloads all the data that it needs. It'll download all the fields.

the description, any photos that have been attached, and that kind of stuff. So this system doesn't have any notion of privacy, right? Like whatever goes into the system, whatever any broker puts into the system is visible to everybody else. That's correct, yep. So users are basically, it's up to them to decide how much information they put into the system. So a private seller might not want to reveal too much information. They might just want to put maybe a phone number or an email address or something like that,

whereas a broker would probably want to market themselves in this system and add probably a company logo, you know, your office address, you know, phone number, you know, that and that broker personality or profile that is in the system would probably start to build up some reputation. So you'd want to see that this broker has successfully done, you know, X number of deals or, you know, and perhaps even build some sort of feedback system in there so that buyers and sellers can rate each other and boost the broker's profile. So in that case, the broker would want.

would want to put a reasonable amount of information in there. But at the end of the day, it's up to the users to decide what they put into the system. Okay, interesting. You mentioned reputation. I think we'll come back to that a bit later. Now, let's stay on this technical infrastructure. Regarding IPFS, who is storing the data? What ensures that it's just always available

for the peers to download it? Currently we are hosting several nodes on the IPFS network that will host the data. Eventually we will see users who are enthusiastic about the system who want to run a full node. And it is a little bit challenging to run a full node. To run Ethereum and IPFS and Rex all at once requires a little bit of of know-how. So those people who are enthusiastic will probably want to run a node and run all three of those systems.

And they will be able to choose whether they want to download all the data or whether they just want to download perhaps one country that they're interested in. Maybe they're only interested in United States commercial property. So they'll only download that data and they'll ignore the rest. and then you'll get some operators who want to just store everything, all the countries, all the markets. So is this sort of a closed IPFS network of nodes,

or is this operating on sort of the primary IPFS network? Yeah, it's currently running on the primary IPFS network, and I don't see any reason to separate it and run on a separate network. it seems to be running fine at the moment. Okay, so then, I mean, I haven't stayed completely up to date what's going on with IPFS. I think they were at some point working on some system to instead of FISA users to provide data,

I think it was called Falkcoin. Is this something that basically could extend then to anyone using IPFS would be able to store this data or would be restricted to only those people using Rex MLS? No, absolutely. I think IPFS, their incentivization

scheme is called Filecoin and it's entirely possible that we could incentivize people to store the content using Filecoin. I mean, that would give us a better

distribution of the data rather than a handful of nodes hosting it themselves. But, you know, there's also Ethereum Swarm is being developed, and they're going to have their own incentivization mechanisms. So, yeah, look, we're pretty flexible at this stage, so we'll evaluate Swarm when it comes along, and we'll monitor how the distribution of the data is going and adjust accordingly. Okay. So let's talk about the user experience a little bit. So tell us how you know, if

from all perspectives, because you know, you have the brokers and you also have the people looking to purchase a property, walk us through the user experience for someone using RexMLS. Yeah, look, the user interface is always a tricky

part of it. We've tried to build a UI that's as user-friendly as possible, but there's just some concepts in the crypto world that are difficult for regular users to comprehend creating wallets and backing up seed phrases and that sort of stuff. So our initial release is pretty much targeted to tech savvy people

and you will have to manage all of that on your own. But we see in the future that we will be investing resources into improving the UI. but we also see down the track a need for a UI that pretty much strips out all of that all of that crypto stuff and basically just gives them a UI that says list your property, put in your fields and hit go and it'll forward on their request to a, you know, a publishing house or a publishing site that will basically take care of the crypto stuff for them. So it'll bundle that into the appropriate transaction, pay the F fee and the REX fee for them,

and listed on their behalf. Yeah, I think that's the only way to go because not everyone, not everyone is as keen as us for the new world of decentralization. So we've got to cater for them as well. So the interesting part about this kind of work, of an MLS is that in theory now there could be hundreds of so like hundreds of services that display this data right so if I'm if I'm a broker I might in the future have an option of like five different services that run on the same data of Rex MLS which is on IPFS

but display things differently and I might like one way of displaying the data over another so For example, in one system, if I might search properties in New Jersey, I might get a set of results. In another system, I search properties in New Jersey, I might get a different set of results. And maybe the second one is better suited to me. So I can choose that user interface, right? Yeah, no, absolutely. The UI and the system that we have built can be hosted by anyone. very easily. So we expect that there will be, you know, potentially 10 different websites

hosting the same Rex UI. So you could go to any one of these sites and create your listings or search for properties. And that's fine. But yeah, you're right. People will customize it. People will tweak it. People will hone in on particular areas that people will find of interest. And the other interesting thing is that the existing players in the space here in Australia like realestate.com.com. There's no reason why they can't pull our data out of Rex MLS and include it in their results as well.

So, yeah, the data is free for everybody to use. Which we can't do that right now. We try to do that with another app to pull data off a loopnet. And it's, you can do it. Well, you can't do it anymore, but it violates all sorts of end user licensing agreements. And that was some of the discussion that Russ and I had that we wanted this thing to be completely opened. And like Russ said, any of these current brokerage platforms can pull the data. So I think the central challenge with a system like next MLSC seems to be,

how do you incentivize brokers to put data in? And how do you prevent kind of civil attacks, like data which is not correct entering into the system because some party wants to, let's say, spam the system? So what's your idea for incentivizing brokers to actually put data into the system? Well, so the first part of that I can take. To incentivize them, we are what we talked about. We're paying them to get on the system. But the incentivization is already there. The pricing, like I said, for a lot of these other platforms,

especially in the commercial sector, which we're focused on, are exponentially high. And they're adding overhead to the large CBREs, Cushman and Wakefields, even big, large investment companies like Blackstone in New York City. It's incredible how much it's adding to their overhead. And then you've got smaller firms like myself and other local brokerage houses, where, again, the pricing keeps going up.

And LoopNet has been an alternative to co-star in terms of price. And it's going from something that's been not reasonable, but at least affordable. And now it's going to jump from 160 to like 250 or 260, something ridiculous. It's going to go way up. And they're also going to loop in. You're going to have to pay for some of the,

the plugins on top of that. So it's going to end up being about $350 a month. And the larger houses can afford this and take this on. But right now, the meetings that we've taken, they're investing in companies like ourselves. We've actually had a couple of larger companies talk to us about investing in Rex because they're trying to come up with an alternative means. And when we talk about IPFS and data decentralization, it's amazing how exciting, how excited they get about that. And so that's really the big incentive here for both large and small companies. And in terms of spamming the network, Russ, I'll let you attune to that. You had a pretty good response for that. Yeah, yeah. We're basically like two approaches to combat spam and, you know,

fake listings and what have you. Firstly, is you will need a small amount of Rex token to create a listing. We're aiming for it to be pretty insignificant, you know, around the 10 cents or 20 cents or something like that. Just enough. So you've got some skin in the game to post content on there. And the other approach is we're introducing a concept called a Metafeed, is basically a user that you subscribe to who basically blacklists spam adverts and that kind of stuff.

Now, this is completely user configurable. So in the UI, you can say you can easily remove meta feeds. You can add new ones. If someone starting to get a bad reputation for blacklisting, you know, properties. that they shouldn't be, then you can easily remove them and find someone else who's doing a good job. And the incentive for these meta feeds to do this blacklisting is, in return for their efforts, they are able to post, you know, promoted listings or, you know, basically put a bit of flare on a listing to, and they can then sell that service to listees. a list to you who might want to put, you know, a nice highlight over their listing. They can contact the MetaFeed and say, you know, I'd like to buy one of your promoted listings,

and this MetaFeed might have a pretty good subscription. You know, he's got a thousand users who subscribe to him. So, you know, it would be a good value transaction. So you talked about reputation. Is there some sort of a token that, represents reputation in Rex MLS? How do you establish reputation? Reputation for a meta feed would be quite, would be quite different because it would mainly be

how many, how many valid spam listings has he blocked, and how many people subscribe to his feed? So there wouldn't be a single metric that people can contribute to. It's more, more, how successful is this meta feed would determine, you know, how many, how many people choose to subscribe to him, basically? Okay. So when one of these participants points out a feed as being, or listings as being spam, who then backs that up by saying, okay, this was, this was, this was accurately, this is

accurately spam or not? Like how, that's where I'm still not understanding. At the moment, that would probably be more of an off-chain process. So the users would probably communicate over Reddit or some other system that would be built that would review these meta feeds. Or it could even just be word of mouth, you know, that this account here has been doing an exceptional job and everybody subscribes to him. It's probably important to mention that Rex will come with a built-in meta feed

that will be run by us and we will be flagging spam content. So in most cases, that will be sufficient. It's in our interest to ensure that we get rid of all the span that shouldn't be there. But if anyone at any point decides that they don't trust us, or we're censoring certain properties and they can easily remove us and switch to somebody else. Okay. So let's talk about the token then, the Rex token. What utility does it serve in the system?

The Rex token primarily is to pay the listing fee. And as mentioned, that's mainly to prevent spam. There'll be further down the line. We've got two phases in this. which we'll touch on, I'm sure, later. But we're going to add plugins that'll have comparable properties, other data that's relevant that right now on the current system you have to pay a certain amount for.

The recs will act as sort of a gas or a currency, I guess, to purchase these services or these plugins. I forgot to mention probably one of the most important things, which is when people list a property, they can allocate how much of the value of the property they wish to accept in Rex. So if you're selling a property for $500,000, you might say, I would like to accept, I'm willing to accept up to $1,000 in Rex. as part of the trade. So, and the idea here is that the more, the more you, the more percentage you pay, you accept in your, in selling of your property,

the more preferential treatment you get in listing, in the position of your listing in the system. So we're hoping that this incentivizes people to slowly increase their, the, the percentage of Rex that they accept as part of a of selling of a property. And competition there should push that up. And if we start to see 10% of property sales being settled in Rex,

then we've already won. So that's a very important feature. Okay. So when you pay Rex to establish a listing, you're burning that Rex essentially? or does it go to someone? Basically, the fees are collected into a, into a separate pot within the contract.

And, and then it's up to the Rex core dev team as to what they do with those collected fees. Basically, they have the choice of burning them outright. They have the choice of using them to add liquidity to the Rex Dex orderbook. and buy tokens, or they can withdraw them and use them to fund development of the platform. Today's magic word is listing, L-I-S-T-I-N-G. Head over to LetS-Bitcoin.com to sign in, enter the magic word, and claim you're

part of the listener award. So there are lots of blockchain projects that are essentially trying to create an open data layer. What I mean by open open data layer is a set of data items that are valuable when organized together for a large number of people. And in most of the cases, this data is kind of centralized across various companies today. And people imagine that the blockchain will be this open data layer, blockchain, IPFS will be this open data layer. So other examples of such systems might be things people are building for media, right? Some people are building like content attribution systems like who created which song

published on IPFS and blockchain or there might be things like open bazaar, right? Like that's an open data layer that says who is willing to sell what right now as an open data layer. And in all of these open data layers kind of. projects and Rex is one of them I would say. Once all of the data is open and now Rex has this requirement to pay 20 cents using the Rex token, somebody else can any day come and create an alternative service which does not have this listing fee and because all of the data is open that other person can create the same service at maybe very low cost. So how do you defend against that?

I believe that the 10 cents is insignificant enough to not be a huge problem. And it does serve the purpose of reducing spam. I think someone who creates this system with no fee at all is going to struggle with a huge amount of spam on the system. And all that does is make more work for the meta feeds to then have to be forever chasing down these spam posts and blacklisting them. So I don't see the 10 cents as being as a big issue. It also has the added benefit of if those fees do get burned, of reducing the supply of Rex token and increase. its values. So I think there's benefits in in the fee model and and yeah, look, it would basically be up to to people to decide and and yeah, I think I don't see a problem with the

with the fee model to be honest. The other thing is too with the real with the real estate community with the crypto community it's easier to sort of jump ship from one platform to another. But for the real estate community, like I said, their main business, and I think this will translate in other industries, their main business is transacting, building, and obtaining real estate information. So if there's a platform that works and they're used to it and they're used to one UI over another, they're going to go with what they're comfortable with and with what costs, obviously, the least. Now, if something's free, but they're used to something else and the cost is nominal,

most likely they'll stick with what they know. So my question is actually part of a broader set of questions, which is for any business that's building an open data layer, what is the moat? What is the thing that defends that business against competitors jumping in and copying them at low cost? And your answer to it is user comfort. Like the users are familiar with the set of user interfaces that you will develop for them. And ultimately, that is what makes them stick to stick to the user. direct service and not jump ship later. Look, you guys know, you guys have built platforms.

Getting a user base is very difficult to do. And once you are able to do that, it's very difficult for somebody to come along and disrupt that. We're running into that right now with going up against a company that is, they're treating their customers in a way that just doesn't make sense, but their customers have to put up with it. So if someone comes along and offers... Rex, you know, forked and it's free, like Russ touched on, there's probably going to be a lot

more spam. We don't know what it's going to be, but to get that traction, if you get that traction, that's a very difficult thing to disrupt, especially if you're treating your users fairly. Yeah, the only other thing I was going to add to that is if you're looking at investing in a in a platform and one system has a supply that can be reduced, depending on how much usage it gets, potentially increasing your investment in the tokens that you hold that you hold, I mean, or choosing a platform that has no, that basically just slowly increases the tokens. you're financially better off choosing the one that might cost an insignificant fee,

but potentially we'll see the value of your tokens increase. So coming back to the token, can you talk about how the tokens are distributed? So I reading the white paper mentioned you had this liquidity injection distribution model. Can you talk about that? Yeah, this is a novel approach we've taken into. to solve this distribution problem with a lot of with a lot of these tokens that are coming out. We weren't comfortable with assigning ourselves all of them or a large portion of them from the outset. We were pretty hesitant even to go with the crowd fund, but, you know, it would be really handy to,

to boost our resources and development speed. So we've gone with this zero token launch and basically the only way to get hold of the Rex token is to put buy orders on the order book and the order book will every six hours, it will calculate the top 10 unfilled orders and basically create or issue new tokens and give them to the top 10 order. So I believe this is a very fair way to do it because you've got to put a buy order on the book, which is available for anybody to buy. So you might want to win the liquidity injection and get some half-price tokens, but someone can also come along and sell their wrecks and take your order. So it's kind of like mining, but I think it's a very fair. and evenly distributed way of distributing the tokens. Okay, cool. So also you mentioned, I think, earlier that you're having a crowd sale.

Let's dive into that a little bit. Can you talk about the token sale? We have kicked off the contract, and I think the token swap is due to start in about six days. and basically we're looking to raise I think was about 45,000 F. That's our goal and the token swap will forcefully close itself once it reaches 90,000 F I believe and basically this will give users a chance to basically buy bulk recs before anybody else.

And yeah, these wrecks will, they'll be issued with Rex reward points, which is basically just a receipt to say, you are eligible to claim X number of wrecks when the claims process becomes active. And we're looking to do that when we go live proper in about three to six months. once we've bettered down the system over the next few months and ironed out all the kinks. So,

so Rex is not really a share in the system or, or a security. It's, it's like, it's like an entry fee to an amusement park, right? Like whenever I'm a broker and I want to put something on the

deck system, then I, and then I need to have this entry ticket and that's the X token. Is that a right way to think of it? Yeah, pretty much. Yeah, it's, yeah, you'll need a, you'll need the Rex to use the system, but it won't entitle you to dividends or shares or equity in anything. It's simply just a, a means to utilize the system. When is it starting exactly and until when is it to go?

It's set to run for about 14 days, but if it sees a huge amount of interest, it will potentially end a lot earlier than that. Instead of 14 days, we set it to 14 tranches of tokens with the expectation that each tranche would be a day. But if there's a huge amount of interest, those tranches will sell much faster than 24 hours, and therefore the token swap could end sooner than that. I don't know the exact time.

It's on the website. It's on the DAP at the moment. It's about six days from now it starts. Yeah. It seems to me that Rex is going after the Ripple model, right? Like they have this token XRP, which you need to have in order to issue transactions on the Ripple network. But it's going for a much fairer and broadly distributed

token supply, right? Like, Ripple is pretty concentrated in the hands of the core company, but in case of Rex, you're targeting a more broad distribution. Yeah, look, I don't think it necessarily is just specific to Ripple. I think I compare it similar to Ethereum. Ethereum you need to hold some of the token to use the system. Yeah. but you're right it's the distribution model is I think as fair as we can get it so

look it'll be interesting to see how the how this distribution model plays out hasn't really been tried before so let's see how it goes but I assume that you have a company of your own right that is also going to somehow have a different business model on the Rex platform. So there's Rex the platform and the token, and that's open data. But do you guys have a company as well that would want to build some service on Rex in the future

and monetize that? Yeah. So we have a separate company that we are, what we'll do is we'll build some of the plugins that we mentioned earlier. a lot of people in the real estate community, which is an excellent use case for blockchain, are trying to do title and escrow services and contracts to some extent. Russ and I, we spoke about this when we first got going with Rex,

and we were sort of taking the Reed Hastings Netflix approach, right? So when those guys got started, they provided a convenient means to mitigate the retail experience by just ordering a video online and having it delivered to you. Meanwhile, as the technology and the infrastructure developed, the bandwidth went up, they were able to, they're now one of the biggest media platforms, and people are more comfortable with subscription-based online models. We see the similar path for blockchain. So we feel it's the multiple listing service is a good entryway to get the brokerage community

and the real estate community, comfortable with cryptocurrency. And as the infrastructure develops, ADAP Central, we would like to provide plugins that would adhere to title escrow services, like I said, some contracts, you know, even eventually down the line, you could get into construction bonds

and things in that nature. Let's walk through all of these alternative places where blockchains and real estate could intersect. So one of the most common intersections that you find in many places is title, like some land registries and recording who owns what at what time instant. So I've seen that factum was pretty active in this space. What are your thoughts on that? Does it really make sense to have real estate linked to private keys that can be stolen?

I do. I don't think right now it. makes sense because people aren't responsible or they're just not, they don't know how to deal with it yet. Even some of the technical guys, you know, you misplace keys and they're gone. So I, like I said, as the infrastructure develops, I think that land registry and title makes perfect sense, and it's a great use case, and eventually it will be done. I just think, and Russ thinks collectively that it's too early and that some of these processes need to be developed more. And once they are, then it will be a very efficient way to see who owned a property throughout

the process. I mean, right now I'm in the process of buying a house and the title company, it's a great business to be in. It's, they've got about $8,000 in fees, and they're just insuring against any possible cloud that could be in the title, which if you look at the report, there's none. So they're basically printing $8,000. And so on a residential level, when you're buying a $250,000 house and you have an $8,000 title fee, that's a big expense, and that adds up. And so, you know, that'll be a great use case to get rid of that. You won't need that anymore. So, you know, but like I said, we believe it's a little early for that. Another interesting use case is when you're looking to buy a property and you get, you've got to go get a, you know, a building and pest inspection done. And usually, you know, there might be 50 people looking at the house and they've all got to go and pay for this silly pest inspection report.

at 500 bucks or a thousand bucks a pop. There's some companies out there that are starting to try to optimize that and improve that and try to and make that a bit more affordable. But I think in an open data system, potentially those pest reports could be uploaded into IPFS and the cost shared or or put up for free. I think that's an interesting use case as well. And what like the real estate industry also has a big like financing component to it. Right.

So there's like trillions of dollars in mortgages. These mortgages are taken and then they're bundled together and then securities are sold in these mortgages. Do you think that kind of process could have? also map onto the black blockchain? Yeah, we do. But I think that those are, they're going to be, there's a lot of fintech companies that are working in the banking industry

that are trying to disrupt that process and a couple of, you know, the stock market and a couple other financial instruments. And we're not attacking that head on. But I do believe that a couple of these companies that are working on it will be successful and absolutely will be able to incorporate. that incorporate that into the REC system. So just before we wrap up here coming to the end of the show, one topic that comes up quite a lot in discussions around the AOs is governance.

You mentioned earlier some things regarding the fees, for instance, and that fees could be used to provide liquidity in the system or could be used to fund development and and some other things. How do you foresee these decisions being made moving forward? What type of government's models have you envisioned for Rex and LAS? We've already built a decentralized governance application for managing these kinds of decisions. So basically, that platform will be integrated into Rex, or it already is integrated into Rex. And it has, it's kind of like a buy invitation governance model.

So users who have worked on the system, who have contributed over time, and who the dev team, or the governance body deems as trustworthy will be brought into the government governance body and then they will get a say in all the decisions that are made. So to start with, it'll be fairly small, just Stephen and I, most likely. But as the system grows and the dev team gets larger, we will incorporate and include more and more people into that model.

Okay, so then decisions would get voted on in some sort of voting systems. I mean, since there's no shares, what you're saying is that any sort of decisions around the code base or around how fees or get redistributed, those decisions would happen in this platform in which, I guess, the members, have voting rights? Is that how it works? Yeah, correct. So each member has basically one voting right.

And it's a hierarchical system so that you can include a group of 10 developers under one voting rights. So those 10 developers will have their own governance contract. and their vote will basically pull together and be one vote in the parent contract. So it can scale out in any way you like. But yeah, basically they, everyone gets one vote on proposals, whether on what to do with the fees or whether to add new members into the body or, yeah, anything that you want to do, basically. and it interacts directly with the Rex contracts.

So you don't need to pick one person and say, okay, you do it. The governance body will interact with Rex and perform the actions if the proposal was, whether it passed, past consensus. All right, great, guys. Thanks to Russell and Stephen for coming on the show today. It was great to talk about Rex MLS. and how you guys are disrupting the real estate market. It's sort of encouraging to see that,

you didn't mention that the real estate market was always the last industry to embrace new technologies, but it's quite encouraging to see that there's a lot of interest around blockchains in that industry. Yeah, fantastic, thanks for having us on. Yep, we appreciate it, thanks guys. And we'll have links to the Rex MLS soft launch platform. We've just launched actually, I think,

in the last few hours. We'll have links to that in the show notes along with the white paper and other documentation about Rexmas. So thanks to our listeners for tuning in. We are part of the LTV network. You can find lots of great shows about Bitcoin, blockchain, and decentralized systems on let's talk bitcoin.com. We released the episodes of Episode of Bitcoin every Monday.

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