Trading on Lofty's Marketplace unlocks significant value for investors
Our mission is to make it as easy as possible for anyone in the world to diversify into real estate investing. A key part of our mission is to solve the liquidity problem in real estate — it is traditionally slow and costly to both buy and sell.
Lofty's marketplace brings liquidity to directly owned real estate by enabling instant peer-to-peer transactions that make things easier for investors:
Greater control: you pick the specific price that you want to buy and sell at.
More options: you can easily buy properties that previously were sold out.
Unmatched efficiency and transparency: trades are executed instantly when matched via a smart contract, and all trades are visible on a public ledger.
Now that you understand the high level benefits of trading on Lofty's marketplace, let us review key details about how the trading itself works.
Trade any property that is fully funded
Every funded property in the Lofty Marketplace is available to buy and sell 24/7 from the Lofty Marketplace menu.
You can only buy a newly launched property, but that property automatically becomes available to trade when it is funded.
Lofty verifies all property tokens and market participants
All property tokens on Lofty's marketplace are verified to be real. Do not trust property tokens advertised for sale by third parties outside of Lofty's platform — they are not verified, and you should assume that they are fraudulent.
To trade property tokens, an investor must be in good standing with Lofty and hold a valid Lofty Verification NFT in the Lofty Wallet or External Wallet where tokens bought will be delivered and tokens sold will be sent from.
Lofty Verification NFTs are unique to every wallet, are non transferable, and may be invalidated if a user's wallet is compromised or if a user is no longer in good standing with Lofty
Verification NFTs are automatically minted for Lofty Wallets
If you use an External Wallet, you will need to mint a Verification NFT from your Wallet Settings before you can trade property tokens
Trading on Lofty's marketplace is executed using an audited smart contract
Every transaction is executed via smart contract built on the Algorand blockchain and audited by a leading firm, CertiK.
The smart contract can only be executed when there is a matching order between two parties that each hold a valid Verification NFT at both the time the orders are submitted and at the time the orders match.
Payments are stored in escrow when your buy order is submitted.
When you submit an order, payment (if buying) and property tokens (if selling) are sent to escrow — they will not appear in your wallet while they are stored in escrow.
When buying, funds in escrow will be paid to a seller if your buy order is matched. Any unspent funds will be returned to you if your order expires or you cancel it.
When selling, property tokens in escrow are still owned by you, and you will continue to receive rent payments until the property tokens are sold. Property tokens will be sent to a buyer if your order is matched and will be returned to you if your order expires or you cancel it.
Lofty's efficient design and use of a smart contract ensures fees are very low. There is a 2.5% platform fee for buy orders of traded properties, and there is a 2.5% platform fee for sell orders for traded properties.
Trading on Lofty's marketplace uses limit orders — market orders are planned
You have the freedom to choose the price per property token for your buy and sell orders. Initially, all orders are limit orders and will only be executed if they can be matched with a corresponding order.
The sell limit price is the price per token that you will accept. Your sell order can only match with a buyer that is willing to pay at least this price.
If a buyer offers more than the limit price you set, then the order will still match at the limit price you set rather than the higher price offered by the buyer.
e.g. You place a sell limit order for 1 token at $50.00 per token. If a buyer offers $50.00 per token, your order will match. If a buyer offers $49.99, your order will not match. If a buyer offers $50.01, your order will match at $50.00.
The buy limit price is the maximum price per token that you will pay. Your buy order can only match with a seller that is willing to sell at or below this price.
All trades are transacted using USDC, even if your order is placed using USD. USDC is a 1:1 representation of the US dollar on the blockchain.
The value of a buy order can fluctuate as the value of USDC changes. E.g. 1 USDC may be worth $0.995 USD at 9am, then worth $1.005 USD at 1pm
If the value of your crypto payment declines while your order is open, then your effective limit price will decrease accordingly.
e.g. You place a buy order for 10 tokens with a limit price of $50 per token ($500 total). If the value of USDC decreases from $1 per USDC to $0.99 per USDC, then your new limit price per token for that order will also decline to $49.5 per token. This new price is displayed as the "current limit price"in your order detail view.
If, when your open order is filled, the value of your crypto payment exceeds its value when you submitted the order, then (1) the limit price per token will equal the original limit price when you submitted the order; and (2) you will receive the extra, unspent crypto in your Lofty Wallet.
e.g. You place a buy order for 10 tokens with a limit price of $50 per token ($500 total). If the value of USDC increases from $1.00 per USDC to $1.01 per USDC, then your limit price per token will be capped at your original $50 per token. If your order is fully matched while the USDC is worth $1.01, then you would receive the excess USDC worth $0.50 back in your Lofty Wallet.
We are working to support market orders, facilitated by an automated market maker (AMM)
It is not relevant if there are open sell orders for a property that you would like to invest in. What shows as available in the order book should not impact the total property tokens that you submit an order for.
e.g. You want to buy 100 tokens in property X, but property X has zero open sell orders. You should still place the buy order for 100 property tokens, and then Lofty will help ensure that sellers are aware, and some sellers will likely decide to list tokens for sale if they believe they can get a fair price.
Similarly, the price at which tokens are listed for sale in the order book should not impact whether you place an order.
e.g. You want to buy 100 tokens in property X at $52 per token, but the lowest open sell order for property X is $55 per token. You should still place the buy order for 100 tokens at $52 per token if you are willing to wait to see if existing or other potential sellers will list tokens that match your bid. If you truly want to complete your order right away, then yes, you could submit your buy order at $55 per token, but only do so if that is in alignment with your investment objectives.
Orders are executed on a first in, first out basis
If you place a buy order for a given price, and 1 minute later another person submits a buy order for the same property token at the same price, your order will be filled first if a match can be found. This same principal applies on the sell side.
If there is a buy order that can match with multiple sell orders for the same tokens at different prices, the lower priced matching sell orders will fill first. For example, if there is a buy order for 10 tokens at $60 per token, and there are only two sell orders for the same property with a price of $60 or below — 10 tokens at $55/token and 20 tokens at $55.01 — the 10 tokens at $55/token will fill the open buy order.
Orders are either open or closed
When orders are open, tokens and payment methods are stored in escrow
Orders may be partially filled, fully filled, or not filled at all; the smart contract automatically fills as much of your order as possible
An order is closed when fully filled, when you cancel the order, or when the order expires
Initially, all orders expire after 30 days, and we are working to support custom expiration windows
When an order is closed, any unsold tokens (if selling) and unspent payment (if buying) are automatically returned to you at the time the order closes.
Lofty provides pricing information for easy reference
All new and upcoming property listings are $50 per token, but pricing is dynamic when properties are traded. Lofty will display either a "starting at" price or an "estimated" price in the marketplace and property detail view.
If the property is a new or upcoming, then we show a "starting at" price of $50
If the property is being traded, then we show an estimated price, based on HouseCanary data — HouseCanary is the largest property valuation company and is widely considered to set the industry standard for residential real estate valuations.
Lofty also provides an order book menu so you can quickly see open buy and sell orders. The order book can help advanced users better understand supply and demand dynamics, and identify profitable trade opportunities.
You can see volume of transactions based on the width of the bar adjacent to each price
Multiple orders of a given type (buy or sell) that share the same limit price are grouped together in the order book
Select from flexible payment options
Buy:
You can pay using credit card, bank transfer (ACH), rent income balance, gift certificate balance, USDCa, and ALGO
If paying with crypto, you can use either your Lofty Wallet or an external wallet (Pera Wallet or MyAlgo Wallet)
California and New York users: good news, you can trade using crypto since you are transacting with another individual.
Sell:
Initially, sellers must accept USDC, but we are working to enable USD.
Please see the guides below on how to easily swap USD and cryptocurrency.
Lofty Wallet makes trading easy for everyone
Lofty Wallet makes trading easier for all users. You are automatically given a Lofty Wallet when you create a Lofty account, and no setup is needed. For the smoothest trading experience, we recommend setting your default wallet to Lofty Wallet in your Wallet settings. You can optionally use an External Wallet, which will require additional steps as noted below.
Buy properties faster with Lofty Wallet
If you use an External Wallet, you will need to do several things that are not required if you were to use Lofty Wallet instead.
You must claim a Verification NFT (one time per external wallet) before you can use an External Wallet to trade. In contrast, every Lofty Wallet receives a Verification NFT automatically.
You must link your External Wallet every time you want to start entering buy or sell order details, but you do not need to do this with Lofty Wallet.
You must sign with your External Wallet within 60 seconds of submitting an order, but you do not need to do this with Lofty Wallet.
Tokens purchased, sale proceeds, returned tokens, and returned funds are sent to your Lofty Wallet
Regardless of whether you used Lofty Wallet or and External Wallet in your order, Lofty sends tokens purchased, token sale proceeds, returned tokens, and returned funds to Lofty Wallet. This guarantees that you will receive your holdings in a secure wallet that you always have access to, and you can then optionally send the tokens and funds to an external wallet.
Tokens purchased: When your buy order matches, you will receive the property tokens in your Lofty Wallet.
Sale proceeds: When your sell order matches, you will receive payment in your Lofty Wallet.
Returned tokens: If you cancel a sell order, or your sell order expires, any unsold tokens will automatically be returned to your Lofty Wallet.
Returned funds: If you cancel a buy order, or your buy order expires, any unspent payment will automatically be returned to your Lofty Wallet.
Submit an order and Lofty handles the rest thanks to Lofty Wallet
Even if an External Wallet is your default wallet, the trading smart contract will still use your Lofty Wallet to sign order swaps on your behalf. This makes your life easier, ensuring that matched orders are completed the moment they match without requiring you to be available 24/7 and present to sign again for an order that you already placed and signed.
View your orders and order updates in the Order History menu
Visit Order History in your transactions menu to view all open and closed orders, along with all corresponding order updates. Order History includes orders for new properties and traded properties.
Click a given order to view details, and then click "See order updates" to view all activity tied to that order.
For example, if you place an order to buy 100 property tokens at $55 per token, and it was filled by multiple sell orders, you could use the order updates view to track that 50 tokens were bought at $54 per token from one seller the day the order was placed, 20 tokens were bought at $55 per token from another seller the next day, and the remaining tokens were bought at $55 from a third seller the day after, at which point your order was fully filled and automatically closed.
If you wish to view only executed orders along with other balance changes like rent payments, reinvestment, and withdrawals, then visit the Balance section of the Transaction menu.
