What is a property token (PT)?
Properties listed on Loaf are repsented via tokens on chain. All Loaf-issued PTs are represented as ERC-20 standard tokens. The supply of each PT is dependent on the amount of the property being issued at the time of the primary sale. There may be subsequent sales in the future and so supplies for a token may increase. Property tokens are also known as: PTs, property units and PUs.
Property Valuation Equation
To estimate a property’s total value based on its tokenization, you can use the following equation:
Property Value = (1 / % tokenized) × (PT price × Supply of tokens)Where:
- % tokenized: The fraction of the property that has already been tokenized (as a decimal, e.g., 0.25 for 25%)
- PT price: Price per property token
- Supply of tokens: Number of property tokens in circulation
This formula helps you infer the implied valuation of the entire property, taking into account the portion that has been tokenized and is trading on-chain.
Yield
PTs allow their holders to access the underlying rental payments via the Loaf platform, paid out in USDC. This yield is a combination of the rental payments made by the current tenants as well as any ongoing obligations from the home owners, including but not limited to ongoing fees paid to Loaf to tokenization services. Each property is different, and you can see a breakdown of this in the ‘Documents’ tab on each property.
Homeowner obligations
At the time of secondary listing of a property, each property owner is required to pay an on-going coupon to Loaf based on the market price deviation from the listing price. This mechanism is there to ensure property owners don’t list their property at an inflated rate. This coupon is dynamic based on the current market price and paid out by the owner on a monthly basis. These payments are passed onto PT holders as part of the monthly yield pay outs.
Current Live Property tokens
You can view all live properties here.