The Pain Points

Today, the real estate asset management industry suffers from the following pain points:

Cumbersome and costly fund creation, asset distribution, and registry maintenance

Substantial administration costs especially for small investment tickets for KYC and registration activities, resulting in high minimum investment subscription amounts

Investors have limited access to secondary markets. They are unable to easily trade assets, even when required by portfolio allocation strategy

Asset managers like Mata Capital rely on paper to manage the investor registry. Digitizing this process would enable Mata Capital to save costs, ensure accuracy and achieve better oversight for its investors.







The Solution

To efficiently manage investment in the hotel building in compliance with regulatory requirements, Mata Capital needed to control who could invest, and define the shares owned and transaction rules.

In contrast to the traditional approach of managing compliance requirements, investor eligibility and share issuance as dissociated manual processes, Codefi Assets’s Ethereum-based platform uses smart contracts to describe the real estate asset, define its compliance requirements, validate the investor Know-Your-Customer (KYC) profile, and issue corresponding fund shares to each verified investor.

The usual burden on Mata Capital to research investors’ eligibility and risk profile was alleviated by inviting potential investors to create accounts, fill in a KYC compliance form and upload all required documents to the platform. These documents were then processed off the Ethereum chain by Mata Capital, the issuer. Those eligible to purchase tokens to invest in the fund were then whitelisted, validating their credentials within the platform.

Leveraging the precision and automation capabilities of Ethereum, the solution allowed eligible investors to define the nature and number of shares they would purchase, make the payment via wire transfer and receive the shares upon payment validation. Behind the scenes, this involved the issuer authorizing the transfer of tokens to whitelisted investors through a certificate signed using its private key.

Upon completion, investors received a receipt of the sale detailing its characteristics (i.e. issuers, investors, number of tokens bought), and a link to the transaction on the Ethereum blockchain.









Diagram 1: Issuer Interface