Ukraine has developed the world's first prototype of a Blockchain Estate Registry17 January 2024
The Public Union "Virtual Assets of Ukraine" (hereinafter – VAU) has successfully completed the development of a prototype real estate and land registry based on WEB3 technologies.
The crypto-fund Dfinity Foundation (Switzerland) financed the development of the BER prototype.
The goal of the Blockchain Estate Registry (BER) prototype is to demonstrate a range of possibilities of new breakthrough technologies that have not been implemented anywhere in the world in government registry systems. In particular, this includes the tokenization of property on blockchain, introducing a new class of assets – title tokens, which, unlike other types of digital tokens, directly represent records of ownership rights to land and real estate.
Within the BER project, blockchain technology serves as both a reliable registration repository and a secure WEB3 ecosystem where users can conduct transactions without intermediaries with maximum speed and minimal transaction costs.
The prototype demonstrates how property owners can transfer their assets from the existing real estate and land cadastre to the BER. Users will conduct transactions online, buying and selling tokens, using smart contracts and crypto wallets with electronic signatures.
The BER prototype offers a smart contract with functions through which the state registration authority can exercise its powers - for example, forcibly transferring tokens based on a court decision or as a result of inheritance and others. Bureaucratic work will be automated and minimized, which will reduce the human factor and all related risks. Real estate transactions on the BER will be automated using model smart contracts. After the launch of the BER, the number of standard smart contracts will increase to meet the market's needs: smart mortgages, smart wills, the creation and investment in decentralized autonomous organizations, decentralized finance contracts, and so on.
Compared to the traditional system of government property and land registries, the BER will accelerate the process of real estate transactions from days to several minutes.
In addition, the BER will introduce new cybersecurity standards based on data decentralization, which is of great importance in the current war conditions in Ukraine.
From the perspective of an individual user, the BER will significantly reduce the costs of conducting operations with their assets.
The BER prototype is based on two blockchains: the Internet Computer Protocol (ICP) and Polygon, but in the future, it will become a multi-chain system, combining reliable and competitive technologies, while users will retain the right to choose.
CEO VAU Konstantin Yarmolenko noted that this project for tokenizing real-world assets and simultaneous registration of property rights without intermediaries in a decentralized property and land registry has no analogues in the world and gives Ukraine an entry ticket into the club of world WEB3 leaders.
The capabilities demonstrated by the prototype are only part of what was proposed in the academic works of Dr. Oleksii Konashevych (Australia), a member of the board of directors of VAU, and in the future, they will also be realized.
The Chairman of the Supervisory Board of VAU and coordinator of the Parliamentary Group “Blockchain4Ukraine” Oleksiі Zhmerenetskyi stated that this project not only digitizes and speeds up real estate transactions to a few minutes but also creates a new unprecedented level of cybersecurity for asset operations in Ukraine during the current war. According to Oleksiі, this project can become the basis for the post-war infrastructure restoration in Ukraine and attracting investments, including from the international virtual asset market.
VAU plans to demonstrate the BER prototype to the Ministry of Digital Transformation of Ukraine and the Ministry of Justice of Ukraine, with whom VAU has previously signed memorandums of cooperation. VAU will submit this project to the new regulatory sandbox that the Ministry of Digital Transformation of Ukraine plans to launch in 2024. Piloting within the regulatory sandbox of the Ministry of Digital Transformation will provide an opportunity to study and test the product in more detail, in order to propose a mature concept for the reform and implementation of the BER into the Ukrainian government management system.
Oleksandr Iefremov, a CEO of Kitsoft and a member of the board of directors of VAU, as the technical developer of the BER prototype, noted that the future of government decisions lies with decentralized systems running on open-source software. Such systems are resilient and build a high level of trust, as they allow users to independently decide which data to share and with whom. Blockchain, as a decentralized system, will not allow one source to make unauthorized changes or take control. A distributed network is more robust and secure. Currently, other solutions, even those that seem sufficiently secure, cannot guarantee such a level of security. Therefore, decentralized systems are the future of government services.
As a pilot project, VAU has signed a cooperation agreement with CEO of the development company KBD.estate (Kyiv) Yevgen Leskiv to implement the large-scale "Hlibivka" project for the construction of the first private city in Ukraine on 925,000 m2 of housing based on the BER concept and asset tokenization technology.
«Blockchain real estate registry makes the primary and secondary real estate market transparent and understandable not only for Ukrainians, but also for the whole world. In other words, it will give a strong impulse to attract investments into the Ukrainian real estate market from all over the world!» – stated Yevgen Leskiv.