Business Model

The business of Cryptectum is relatively straightforward: Cryptectum collects funds through Crowdfounding to buy and rent real estate in Switzerland. The rental income is distributed to investors. Due to low mortgage rates in Switzerland, 50% of the real estate is financed with mortgages. The cryptectum will be established as a stock corporation under Swiss law.

The special thing about Cryptectum is the collection of funds through Crowdfunding. The administration of the shares is to be carried out using blockchain technology. In other words, participants purchase tokens. With the help of these tokens, the profits are distributed and sale of the shares is made possible. The token name is «Tectum». The ethereum blockchain is chosen as it allows «smart contracts». The ethereum blockchain is the most common blockchain with smart contracts, so there are many possibilities to set up a «wallet». Even without downloading the complete blockchain, a wallet can be created via Metamask or MyEtherWallet which can accept any altcoin based on Ethereum.

Token distribution

85% are available via crowdfunding for $1 per tectum.


The Smart Contract

The SmartContract is based on the Ethereum blockchain, the associated token corresponds to the ERC20 token standard. The SmartContract has the following options:
  • Crowfounding is carried out through a Multisignature Wallet connected to the contract. The participants pay into the wallet and receive a corresponding number of tokens.

The administrators (Cryptectum AG) can submit proposals for voting to the participants. On the one hand, real estate can be proposed for purchase, on the other hand the increase in the number of tokens can be proposed. This may be necessary to allow Cryptectum AG to grow and increase the liquidity of the tokens.

  • The participants can vote on the proposals with yes or no. However, as long as voting is on, the tokens cannot be sold after voting. This prevents multiple matching with the same token.
  • Cryptectum AG purchases tokens on the market, provided these are available at reasonable prices. The purchased tokens are distributed among the participants.
  • If Cryptectum is closed and all tokens have been purchased, the SmartContract will be closed.

The profit distribution will be made the following way: With the revenue, tokens are bought from the market. Hence the participants can easily sell their tokens if they wish to. Cryptectum will buy tokens to max 5% over market value. Once sufficient tokens are available, they are will be burned. If the participants agree to a capital increase, further tokens are created and offered for sale. The advantage for the token holder is increased liquidity of the token.

Of course, the token holder wants to forecast how high the return on his investment is. The graph below makes it easy to understand what the capital will be, to what extent tokens will be burned. (What capital value is burned, causing the remaining tokens to increase). The following chart shows the token holder profit for an investment of $ 10 million.



The SmartContract also allows the token holders to participate in Cryptectum AG. In this way it is possible to vote against suggestions (so-called "proposals"). The operators of Cryptectum propose a property for purchase and the token holders can either cancel or refuse the purchase with a token having one vote. The token holders can also vote on new issuance of tokens for capital increase. In addition to the positive influence of the «Wisdom of the Crowd» it is ensured that the people involved in Cryptectum AG do not suddenly sell their own real estate to Cryptectum AG.

Through the efficient structure and easy management of the assets deposited via blockchain, the costs for the token holders can be kept down without competition.
Estate agent fee: The search for an optimal property and its purchase is very time-intensive. The Crytectum will receive a fee of 3.5% of the total price for each purchased property.
Administrative fees: For the administration of the real estate, the fee is 8.7% of the real estate income. The real estate success is defined by the net rental income less than a year, net of mortgage and maintenance and operating costs.


Rental market

A special feature of the Swiss housing market is the huge proportion of tenants. This means that the majority of the Swiss live in  rented apartment or rented house. In recent years only 39% of apartments / houses are occupied by the owners. This ratio is in some cases significantly higher in other EU countries.

From the above, it can be easily understood that the purchase and rental of real estate in Switzerland is a lucrative and secure business. Not only the value of property is increasing with high probability, the leasing of real estate is quite easy due to high demand. The disadvantage is that the laws for the protection of tenants greatly favours them. Even a tenant who can not or does not want to pay the rent is very difficult  to remove from the apartment. A sufficiently good reference of the tenant is indispensable. A collection Procedures register output provides further protection.


Property market

The real estate market in Switzerland, like most real estate markets in industrialized countries, shows a continuous increase in value. Condominium prices increased by 4.6% last year (2016). Apart from a dent in the 1990s (in which a correction of overheating property prices coincided with an economic recession), real estate price index has shown continuous growth rates for over 30 years. However, even in the years of the housing crisis, the price trend showed an average decrease of only -2.6%. Various measures taken by banks and cantons prevent the formation of pronounced bubbles such as in the USA. The capital requirements and portability requirements of the banks are very high, so foreclosures are very rare in Switzerland. The cantons dampen property speculation by means of massive property gains taxes.
Since 2002, the agreement on the free movement of people with Switzerland was applied to the EU, there has been increased immigration of EU citizens to Switzerland. For 10 years, Switzerland has experienced an increase of more than 1% in population. The population increase is always been positive exept 1976. Building space is limited in Switzerland, for the approximately 8 million inhabitants only about 230,000 hectares of building area is available. This is only about 300 m² per inhabitant (about 0.6 million inhabitants live outside the building zone). Thus, an increase in real estate that can keep up with the population growth is hardly possible and this has resulted in an ever increasing demand for housing.

Whitepaper PDF

Here you can download the whitepaper in PDF-version.
© 2017 Cryptectum Schweiz