disrupt how?
Now imagine we transfer ownership of the house to a DAO tied to an NFT. American law allows corporations to be governed by software. So the house is nominally owned by a Wyoming DAO LLC, which gives management rights to whoever holds an NFT on the blockchain.
We’ve legally tied control of the property to an NFT. If you want to sell me the house, we no longer need to transfer control of the property, we just exchange the NFT. Instead of using an escrow company, we can use an off the shelf smart contract which holds the escrow and automatically governs most common cases.
The escrow smart contract can defer any out-of-band disputes to a mutually agreed upon private arbitration entity. We’re not confined to local law, and can choose whatever private legal system we want from anywhere in the world. Simply point the smart contract at the arbitrator’s public address. Imagine being able to use Delaware Chancery Courts instead of a corrupt Louisiana rural parish.
When the property is an NFT, we can now borrow against it by directly accessing a global market of DeFi capital. No more paying the bank and mortgage services 1%+ of spread. Simply construct the mortgage as a smart contract, which controls ownership over the NFT. No more worrying about local judges interfering with foreclosures. Default on the mortgage is now a much simpler and faster eviction process since the homeowner is legally just a tenant of the DAO.
Those individual mortgage smart contracts can now be packaged and pooled, with the risk tranches in such a way to maximize capital efficiency. Again none of the massive frictions that existed n 2008, where foreclosures went slow as molasses because formal title and liens got lost in byzantine county clerks across the country. No fraud where banks and mortgage brokers stuff structured credit pools with crap. Every mortgage pool is instantly auditable but anyone using on-chain data. Foreclosures can be executed in real time and capital rebalanced instantly. That drastically reduces the risk of a cascading series of failures from a hidden pool of risk that we saw in 2008. It also allows for much higher leverage in the financial system, as margin calls can be made much faster and 24/7.
What stops the judge from just saying "this smart contract is unenforceable, the NFT doesn't decide who owns the house"?
Could some two bit local judge try it? Sure, but it would ultimately get taken to the Supreme Court. And given the current composition of SCOTUS it’s very unlikely they’d vote to weaken corporate property rights.
If you’re worried about legally recognized LLC DAOs losing their rights to residential property, than you should also be worried about private equity firms who are buying residential SFHs also having their property appropriated. Seems like a pretty big long shot to me. This is America, property rights are pretty sacrosanct.
I can't find a single instance in American history of real property being outright appropriated by a court outside eminent domain.
(Of course the smart contract can be coded with the option to defer to a human arbitrator in the case of dispute, but that doesn't even have to be a duly appointed judge. It's just an address on the blockchain that we point to. Almost certainly we'd pick an arbitrator that respects crypto title.)
The only way for the fiat legal system to pierce this scheme is to either invalidate the LLC in the Wyoming court system or to directly appropriate title to the real property from the LLC in the local county. Both are pretty unlikely.
If the SCOTUS takes your case. Which it doesn't do often.
Frankly, I don't know why less regulation on most people's largest purchase is considered a good thing.
You also don't really understand the cost drivers. The escrow company should have cost maybe 1%. You didn't have to do that at all. You could have offered to skip escrow, given cash directly to the seller and recover from them if the contract goes sideways.
You also don't understand real estate law. >Default on the mortgage is now a much simpler and faster eviction process since the homeowner is legally just a tenant of the DAO.
It is easier to evict a foreclosee than a tenant in most jurisdictions.
> one of the massive frictions that existed n 2008, where foreclosures went slow as molasses because formal title and liens got lost in byzantine county clerks across the country.
2008 moved slowly for two main reasons. 1, politically, no one wanted to move fast. 2, the mortguages were all chopped up, sub contracted, etc, and it was unclear who had rights to forclose on the house because of teh mounds of subsequent obligations.
https://twitter.com/darrenrovell/status/1435967697913880580
Never before have artists had this much control of their ip.
This doesn't seem like artists controlling their IP, to me it seems like another method of sales that lets them tap into essentially a pineapple fund. Those who made money in crypto, sloshing around the excess, making it look bigger and bigger.