Coliving is a growing trend that is reshaping the way people live together. As the cost of living rises, more and more people are choosing to share space and expenses with others, and coliving companies provide a way to do this that is both convenient and affordable for tenants. However, coliving also faces many challenges, such as lack of tenant involvement in community decision-making, high turnover of residents, and lack of ownership. This is where the integration of blockchain technology and tokenisation has the potential to revolutionise the coliving industry, addressing these issues and unlocking new opportunities for residents and operators alike.
Blockchain technology is a decentralised digital ledger that allows for secure and transparent transactions. Tokenisation, on the other hand, is the process of creating digital tokens that represent ownership in a physical asset, such as real estate. These two technologies can be used together to create a novel shared ownership and decision-making coliving model.
One way that blockchain and tokenisation can be used in coliving is through the creation of DAOs, or Decentralised Autonomous Organisations. DAOs are organisations that operate through smart contracts on a blockchain, allowing for decentralised decision-making and governance. In the context of coliving, DAOs can be used to complement a fair and transparent ownership structure where tenants have a say in how the property is managed and maintained.
For example, a coliving property could be tokenised and sold as fractional ownership, with each token representing a share in the property. These tokens could then be traded on a blockchain-based platform, allowing for easy buying and selling of ownership shares. The property could be managed through a DAO, where token holders have a say in decision-making and can vote on important issues such as rent, maintenance, events, and amenities as well as important community decisions.
Let’s delve further into how blockchain technology can be specifically tailored to effectively tackle the primary challenges encountered by coliving communities:
- Tenant Involvement in Decision-Making: Traditionally, coliving communities might lack a structured system for tenants to participate in decision-making processes. This can result in residents feeling detached from important community matters. Blockchain-based Decentralised Autonomous Organizations (DAOs) can offer a solution. Through smart contracts and transparent voting mechanisms, residents can have a direct say in communal decisions, ranging from property rules to resource allocation. This level of participation fosters a sense of belonging and empowerment within the community.
- Lack of Ownership: In traditional coliving models, tenants typically do not have ownership stakes in the properties they reside in. Blockchain’s tokenisation capabilities change this paradigm. Properties can be tokenised, allowing fractional ownership through the issuance of property-backed tokens. Tenants can purchase these tokens, effectively becoming partial owners of the coliving property. This sense of ownership not only aligns tenants’ interests with the community’s success but also offers potential financial benefits as property values appreciate.
- High Turnover of Residents: Coliving spaces often witness a higher turnover of residents compared to traditional housing. Blockchain technology can streamline the onboarding and offboarding processes, making it more efficient and secure. Smart contracts can automate lease agreements, security deposits, and key exchanges. This reduces administrative overhead for operators and enhances the overall tenant experience. More importantly, the introduction of resident ownership through blockchain-based tokenisation may significantly reduce turnover by fostering a stronger sense of commitment and belonging among tenants.
- Transparency and Trust: Blockchain is inherently transparent and immutable. Property-related transactions and decisions recorded on a blockchain are secure and tamper-proof. This transparency fosters trust among tenants and operators, mitigating disputes and ensuring fair governance.
- Efficiency and Cost Savings: The integration of blockchain technology can streamline property management processes. Smart contracts can automate rent collection, maintenance requests, and utility payments. This automation reduces operational costs and ensures that tasks are executed efficiently, benefiting both operators and tenants.
- Fractional Ownership and Investment: Tokenisation allows for fractional ownership of properties. Tenants can invest in real estate with smaller financial commitments, diversifying their investment portfolios. This can be particularly appealing to individuals who seek to participate in real estate markets but do not have the capital for full property purchases.
- Data Security and Privacy: Blockchain technology ensures data security and privacy. Tenants’ personal information, financial records, and lease agreements can be stored on a blockchain with enhanced security features, reducing the risk of data breaches and identity theft.
While there are many opportunities for blockchain and DAOs in coliving, there are also challenges that need to be addressed. One of the main challenges is regulatory uncertainty, as blockchain and tokenisation are still relatively new technologies that are not yet fully understood by regulators. This could lead to legal challenges and uncertainty around ownership and liability. Additionally, another challenge lies in ensuring that the technology is accessible and user-friendly for a diverse range of tenants, including those who may not be familiar with blockchain and digital platforms.
Despite these challenges, there is enormous potential for blockchain and DAOs to revolutionise the coliving industry. By creating a more equitable and transparent ownership structure, these technologies can help to create more inclusive, sustainable and thriving dynamic communities. As the coliving industry continues to grow, it will be interesting to see how blockchain and DAOs are used to shape its future.