RAACLend | RWA Tokenization & Index
RWA Tokenization
RAAC has legal title to real estate. It then tokenizes the real estate by creating a REET NFT representing a contractual right to a specific property.
REET NFT holders may use their REET NFT (or $iREET, as described below) as collateral to borrow crvUSD. They can use the crvUSD to earn rental yield or an equivalent by placing tokens (DEcrvUSD and RcrvUSD) into the liquidity pool as shown in the main value flow diagram below.
REET NFTs may be traded on third-party marketplaces. Eligible REET NFT holders may also redeem their REET NFT to exercise its contractual right to title to the off-chain real estate by burning the REET NFT and starting the redemption process.
$iREET holders may also redeem their tokens for REET NFTs or other RWA tokens using the process described below (see Redemptions).
To bootstrap the system, RAAC maintains the initial real-world real estate underpinning the REET NFTs through continued replenishment of a Repair & Maintenance Fund. RAAC is responsible for expenses such as property management, maintenance, repair, insurance, taxes, and property filings.
80% of any rental income earned from tokenized real estate, will be deposited in RAAC’s secondary gauges, as described below. 20% will be paid to the Regnum Aurum Acquisition Corp., but this allocation may be modified via governance at a later date.
RWA Index
The REET Index, or iREET, allows users to gain exposure to the performance of real estate markets without purchasing a full REET NFT.
iREET allows REET NFT holders to deposit a REET NFT and receive iREET Tokens ($iREET) of equivalent value. RAAC may also contribute REET NFTs from its own holdings to the iREET.
$iREET tokens reference the notional USD value of the iREET , which is the current value of the underlying pool of real estate-linked assets.
$iREET tokens can be redeemed for REET NFTs (see: Redemptions)
When a used deposits a REET NFT, the user receives $iREET tokens based on the following formula:
RAAC charges a 2% minting fee denominated in $iREET tokens, which are sent to the RAAC treasury.
The value of underlying real estate is determined by a regular market assessment for each property.
Rental yield, if any, associated with $iREET tokens accrues to the RWA gauge directed by $veRAAC holders. The RWA index may receive rental yield from the RWA gauge. This way, rental yield is retained in the index, increasing Net Asset Value (NAV), and is used to expand the index’s exposure. This yield is net of:
A fee for the RAAC Treasury
A fee for accruing protocol-owned liquidity within RAAC.
Holders may redeem $iREET tokens for an available REET NFT, selected at random from the iREET (see: Redemptions).
$iREET tokens can also be used as collateral on RAAC to borrow crvUSD. This adds further velocity, helps align index token prices closer to NAV.
The index token price will start at $1 but may fluctuate based on NAV.
Example Real estate worth $1,000,000 is added to the index at an index token price of $1. Therefore, 1,000,000 index tokens are issued. One year later, the notional value of the real estate exposure in the index is $1,100,000. With 1,000,000 index tokens in circulation, the price is $1.10.
Redemptions
The iREET system uses a randomized redemption queue where users know which REET NFT is next in line if index tokens are submitted for redemption. Users cannot select a specific property for redemption. If no redemption occurs within 72 hours, the next REET NFT is randomly selected for redemption.
To unlock the REET NFT, users must redeem $iREET tokens. The number of $iREET tokens required to unlock the REET NFT is:
Last updated