BCT 2019

1. Zoomers cant afford homes

2. Tokenomics

3. The 2008 housing crisis - a Lehman Brother’s case study

4. Relevance of Blockchain

5. Remembering this is a studio project

6. Website

7. App

8. Branding and Presentation

Though this is a mere studio project, I think the scope and problems that we are addressing and attempting to solve are very relevant and important. As someone involved in the cryptocurrency and wider finance space, and as someone wanting to buy a house at some point in my life, the idea I came up with was designed for someone like me.

With the stability of the financial economy falling under increasingly critical scrutiny, changes need to be made.

Just one example being the exuberant amount of money the US Federal Reserve has been printing to keep the economy afloat throughout the Covid pandemic.

https://www.somagnews.com/9-trillion-story-22-of-us-dollars-printed-in-2020/

This has led to much speculation of an approaching liquidity crisis as the repo markets demonstrate an astounding imbalance of collateral to cash. This due to quantitative easing (AKA printing money) which essentially just means that they repurchase government bonds from banks to flood the markets with cash. This however creates the problem that we're seeing now, not enough collateral (primarily government bonds in this case) in the system to match the supply of cash. Just in the past week, we saw record highs of reverse repos

https://www.msn.com/en-us/money/markets/fed-reverse-repo-facility-sees-record-244853-billion-of-overnight-demand-from-wall-street-awash-in-cash/ar-AAKsunN

The already low overnight repo interest rates at times even dipping into the negatives

https://www.msn.com/en-us/money/markets/fed-reverse-repo-volume-sparks-worries-us-short-term-rates-could-go-below-zero/ar-AAKnlzF

Demonstrating a counterintuitive demand for the collateral over the cash. Lenders going so far as to pay a borrower money in return for the collateral, which is generally US treasury bonds. This could be in part, due to the over shorting of the bond markets. Alternatively, it could also indicate that these banks are very hesitant to invest their cash into every other investment when taking into account potential risk, and are parking their liability (cash) in a safe harbour.

What could this mean for the economy? I guess only time will tell. One thing that's certain for me however, is that an alternative hedge against the traditional centralised system will be required if we want to lower our risk to another potential economic meltdown.

Final Presentation: https://www.behance.net/gallery/120386489/homeStock

After finishing up with the most important page designs, I moved on to creating an all inclusive presentation. This is something that I would want to show people to give them a better grasp on the design aspect of the project.

I started with mocking-up the screens onto their respective formats.

Starting with the website, I had 3 different formats

Chrome

iMacs

Tablet

Then onto the app, with 3 different formats.

Stylised view of all the pages

Real life

Exploded/stylised view

To make the brand seem more established and real, I also designed and mocked-up some extra peripheral details.

Business cards

Brochures

Ads

The app is primarily to be used by existing clients to manage their accounts.

Starting with some rough paper wireframing

I fleshed the design out on Adobe XD

Investor

Home Owner

After the logo, the next obvious task was to create a website. The website, alongside the app would be the two main platforms that our dApp would be hosted on.

The website was simple enough to put together. Taking inspiration from a mix of different existing websites, I wanted a simple and clean design. Unfortunately, I'm absolutely useless at illustrations, so I had to opt into reusing the logo in innovative ways to add some "flavour" on some of the screens.

There were TWO main for the website:

Firstly, it was to onboard, funnel and inform potential clients to use our platform.

Secondly, it was to host the actual platform which would allow both home owners and investors to manage their accounts.

All this research and conceptual ideation made me forget that we had to actually create something. After smoothing out the conceptual elements of our idea to a point where it made sense, I started creating the brand behind our idea. As a project, I wanted to create the framework and design for the platform/brand up to a point where I would be comfortable to pitch it to investors.

After landing on our name, homeStock, the first consideration was colour scheme.

Blue was chosen as the brand's main colour for TWO main reason:

Blue is a safe and well-liked colour often demanding trust and comfort.

The colour is also synonymous with business, with terms such as "blue-chip stocks" and its associations with suits and ties. Many financial institutions' logos such as Goldman Sachs and Chase also conform with this theory.

Next, the logo. I wanted to keep it nice and simple and easily adaptable and scalable to fit into whatever scenario we needed it to be placed in. After much doodling and scrolling through inspiration, I landed on this.

Its essentially just a combination of H and S, broken down to simple lines and abstracted. I had a few prototypes, but ended up with this final design.

I created a few different variations depending on what context it would be required to be placed in.

After beginning to realise the fragility of the financial system, and the oftentimes misguided trust that we have on just a few people not to knock it all down, I dug deeper into the innovations in the blockchain space. My favourite project being Cardano.

Cardano, alongside many other blockchain projects aim at solving our reliance on this flawed and fragile centralised financial system. In the specific case of Cardano, the main aim is the utilisation of smart contracts to build a connected and decentralised system to host dApps (decentralised apps), and provide digital identity management and traceability functionality. Cardano's target demographic has predominantly been Africa.  Africa is a region expected to have the second largest expected gdp growth, and with their limited financial and digital infrastructure, Cardano aims to be at the forefront of Africa's transformation.

The problem with existing banks and financial institutions in Africa especially comes down to their high concentration of fraud and corruption. These problems being a symptom of a lack of documentation and identification. Digital identification is an important factor to Cardano's mission, and it aims at developing trust and accountability for the large proportion of the "unbankable" population. Many of the continents population are unable to leverage their existing assets to expand in their careers or provide for basic everyday things. Once solved, it would give way to an explosion of economic growth and raise the standard of living for many.

After many years in development, Cardano has finally been able to announce their partnerships with both the Ethiopian and Tanzanian governments to create a blockchain-based system to track student performances in schools country wide.

This includes approximately 5 million students and 750,000 teachers in Ethiopia alone. The massive news comes at a great time accompanying the huge surging interest in the crypto space thanks to the enormous bull-market we've been seeing in the past year. This deal with the countries' governments cements Cardano as not only a cryptocurrency and investment, but also a potentially revolutionary, continent-wide system which may aid in the transformation of the African economy.

https://africa.cardano.org/

https://qz.com/africa/2011167/forget-bitcoin-why-ethiopias-blockchain-deal-is-pivotal/

In conjunction with the problem framing paper, I spent some time doing some more in depth research into cryptocurrencies, blockchain technologies and the financial markets in general. Starting by analysing the way traditional markets generally work, and why innovations like cryptocurrency and blockchain platforms are necessary. This started off with looking at the latest major financial crisis, the housing crash in 2008.

After some brief research and with my limited understanding, it appeared to be the extreme greed of the elite few that ultimately brought down the global economy which affected millions world wide. The most notable party involved seemed to be Lehman brothers, who were once the fourth largest investment bank in the US.

Lehman's downfall ultimately came down to their high risk practices and overexposure to the collapsing housing market. The firms reckless lending during the housing bubble in 2003 - 2004 eventually led to record high subprime mortgage defaults. Despite the crashing housing market, Lehman continued to riskily expose themselves to the real estate market in the form of assets and securities, doubling down to the tune of 111billion in 2007. "By 2008, the bank held 30 times more in real estate than it had capital - and had been borrowing too much money to fund its mortgage investments." As the housing market continued to decline, investor confidence crashed along with it. After rating agency Moody's considered downgrading Lehman's debt rating, and eventually gave up a majority stake of its company to investors to maintain its ratings, without a government bailout, bankruptcy became their only real option.

https://www.thestreet.com/markets/lehman-brothers-collapse-14703153

https://www.thesun.co.uk/news/7265360/lehman-brothers-bank-collapse-crisis-bankruptcy/

So how did Fortune magazine's No. 1 "most admired securities firm" in 2007 reach bankruptcy in the span of just a single year; a firm which had over 100 years of experience surviving history's worst disasters? There was of course many different variables to this downfall. But one that I looked further into was their ability to continue overleveraging their positions, up to 30 times at one point, using a loophole in the repurchase agreement (repo) system, known as repo 105 and repo 108.

https://www.investopedia.com/terms/r/repo-105.asp

Repurchase agreements are very short term loans that are essentially what keeps the financial markets as liquid as they are. The borrower (Lehman) provides the lender collateral, and they receive in return cash which is less than the fair value of the collateral. (The difference between the cash received and fair value of the asset is known as the haircut). In the case of Lehman's, they fraudulently labelled these repo agreements as sales, and in doing so, prettied up their books and lowered their leverage ratio on paper. Now, repo 105 and 108 were the firms tactic to circumnavigate the FASB (Financial Accounting Standards Board) rules which would allow them to account these repos as sales. This allowed Lehman's to receive 105% in cash for fixed income securities and 108% for equity securities. (Hence repo 105 and 108). However, they developed a reliance to repos due to their massive amounts of overleveraged positions which required them to borrow significant amounts of money to fund. When lenders realised their collateral of choice, mortgage backed securities, were no longer desirable thanks to the housing crisis, Lehman's developed a liquidity problem which ultimately stopped them from operating.

My initial idea was to have a unique token for every house that would be on our platform, however this came with a few issues:

The lack of liquidity would cause the trading of tokens to be more like an auction on TradeMe rather than traditional stocks and cryptocurrencies

The very low market caps would cause there to be massive price volatility after every transaction

Because the house is essentially partly "public", what systems could be put in place to allow users to buy pack parts of their home till full ownership

Another idea of having one universal token arose. This token would essentially act much like an ETF or index fund, but instead of stocks, it would house the cumulative homes contained within the platform. Rough guidelines as to how this would work: Every new house that gets put onto the system would add its perceived worth onto the existing price of the token, however because new tokens would be minted and issued, the amount of total tokens in circulation would be diluted. This process would essentially average the total perceived price of all the houses within the system.

This however introduced its own set of problems. Most notably how we can make it fair for all houses in the system to essentially be worth the same when they certainly aren't. Alongside this, what system would need to be put in place to incentivize and attract potential investors.

I came into studio from the summer break with a rough idea of what I wanted to do as a project. During my spare time while I wasn't working, I got more and more involved in stocks, cryptocurrencies and the wider financial markets. Interested particularly on the potentially revolutionary technologies that could emerge from different blockchain projects, I wanted to be involved in the space in some way.

Although unsure at first, having a job in the real estate industry and getting hammered with headlines everyday about New Zealand's housing crisis,

I wanted to come up with a way that could some way solve some aspects of the wider problem. Inspired by the rise and popularity of NFTs, the idea of tokenisation of other things, such as houses, came up.

Being someone whos technically an "adult" now, expectations such as home ownership start to arise. However, with the prices of houses going parabolic in the last few years, the dream of owning a home has become practically unattainable for my generation without the intervention of parents or other financial assistances.

Year on year, from February 2020, the median price of a house in Auckland has shot up 24% from $885,000 to $1,100,000

(https://www.interest.co.nz/charts/real-estate/median-price-reinz) 

How can we expect to keep up when the 10 year annual median income average growth rate was only 2.945% (2009-2019).

This substantial growth only widens the intergenerational wealth gap that already exists. It punishes new players in the game, and only really benefits existing parties.

Home stock is a proposed blockchain platform that will host tokenised real estate which can be sold to and between investors. The project aims at helping home buyers/builders overcome the hurdle of saving for a deposit, while also incentivizing and rewarding real estate investors to help.

Prospective Home Owners:

As a prospective home owner (PHO), you can tokenize a percentage of your proposed home up to investors in order to raise capital to purchase/build it. This initial sale will be done through our platform's marketplace and the listings will be controlled by the PHO. (Much like something like TradeMe)

Each home will have its own unique token (NFT) which will fluctuate in price depending on the bid/ask of investors. Ultimately it will be up to PHO to market and convince potential investors to invest into their home.

At the initial sale of the tokens, the PHO will be solely responsible for setting the price of the tokens. Bids by investors will help show what the market sentiment is, but bids will only be accepted by PHO when they decide the price is fair.

As a PHO, your only obligation once you finalize the home build/purchase will be to repay investors once the home is sold. Aside from this, a (now) home owner can also keep investors up to date on improvements or the general status of the house in order to create more demand for their tokens.

Investors:

As an investor, you can choose homes that you believe will perform well in current market conditions. Token sales will be available in two parts

1) The IHTO (Initial house token offering) will act as the initial sale for the initial amount of tokens issued. Investors can bid for different token prices or just buy at market value. At this stage, it will be the sole decision of the PHO to approve/decline the bid offers. If the bid is accepted, the token price will adjust accordingly.

2) Once the home is finished or all the tokens are sold (whichever comes first), the tokens will be able to be traded on a secondary exchange between investors. This will work in a traditional bid/ask system, and the value of each coin will be dependent on the perceived value of the home according to investors.

Investors can choose to hold long term until the sale of the house in which they will receive the capital gains on the amount of tokens held in addition to the token price at the time of sale. Alternatively, they can also do shorter-term trading on the secondary exchange.

The system innately incentivizes long term holding as you will receive a much higher ROI, however the secondary exchange allows flexibility if investors are short on cash.

Home Page

About Page

Search/Explore Page

Last iteration of my designs for this project. Though it’s obviously still far from finished, it was still functional in at least showing the proposed purpose of our ideas. 

After spending some time restructuring layers fixing groups, I finished up the basic interactive buttons to play test flow

So as we were discussing the importance of time in the overall effectiveness of health treatment, we thought about making an easy tool to find out where the closest AED was. This was just a few random ideas that I tried out. 

The first was a map that was taken straight from the official AED Locations website, while the others were taken off google maps with my attempts to show AED locations on them.

After changing the logo of the pins to the official AED logo, I ended up landing on this relatively simple design. The following would both list and show nearby locations with AEDs available. You would also be able to search up a location if your phones gps or location was not working or turned off.

After clicking a pin on the map, further details and a small thumbnail off google street view will pop up. Clicking the popup will go into further detail about the selected location