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Brightvine CEO explains mortgage NFTs and blockchain uses

As crypto prices crash and investors big and small wonder what the future is for the, perhaps overhyped, decentralized economy. Regardless of the outcome, the blockchain component has been steadily gaining traction as the real technological differentiator moving forward.

Brightvine is one proptech startup using blockchain to change the way that traditional real estate processes have been done. Through its Portal and Marketplace, mortgages are tokenized and entered into a blockchain-backed secondary marketplace, which the company says increases liquidity, reduces prices for borrowers and in turn creates more homeownership.

FinLedger recently spoke with Brightvine CEO Joe Vellanikaran, who discussed Brightvine’s model, its partnership with Angel Oak Ventures and blockchain’s future in the industry.

Q: First off, can you describe Brightvine and the services you offer?

A: I founded Brightvine two years ago. Brightvine is an investment platform that is bridging traditional institutions and investment managers to DeFi to increase liquidity for fixed-income real estate mortgages.

Q: What have been your biggest challenges since you started the company?

A: I think we’re very much still in the early stages of blockchain. It doesn’t really feel that way, because blockchain is so mainstream. Everyone knows about it. Everyone’s heard about it. I don’t think everyone fully understands it. Getting back to your question, I think the biggest challenge is finding the right partners, in the real world, to work with us as a blockchain tech company and to really build the future.

Q: You recently partnered with Angel Oak Ventures, how did you meet them and what is that partnership like?

A: I met Angel Oak some time ago. They are an incredible company. They’re very forward thinking. They very much believe in the vision of what we believe, which is that the entire infrastructure of the financial ecosystem will move to the blockchain eventually. Whether it’s you know, two years, five years or 10 years, that’s just going to happen. But once we started talking to Angel Oak at that executive level, telling them where things are going, it kind of moved very quickly from there.

Q: Can you describe what a mortgage NFT is?

A: To clarify, we’re very focused on mortgages, so I can explain. We’ve been calling them mortgage NFTs before NFTs became a household name. Frankly, that’s the technical definition of an NFT is a non-fungible token. It’s a unique asset that’s been tokenized. Every mortgage is completely unique. Even two mortgages on the same house, those are two separate liens on the house.

If you tokenize a mortgage it is an NFT, and then the unique aspect of it for us, the benefit of it is that by tokenizing the mortgage we can create liquidity on the blockchain for anyone who’s originating mortgages. And then the main, big benefit there is that if you increase liquidity for any type of mortgage, then the overall effect at the macro level is that the pricing for the mortgages goes down for the borrowers, and then it gives people more access to homeownership.

Q: Where do you see this going as you look ahead and how do you see this change the game really?

A: I think the way it’s going to change the game is when you think about a mortgage in general, there’s a lot of financial institutions involved. Of course, you go to a bank or you go to a non-bank lender. It’s a big company, and they’re issuing you a mortgage that’s eventually being financed by other investors downstream. Whether it’s a mortgage-backed security investor or or if that mortgage is being held on the balance sheet of some other financial institution. I think the end game is all these different counterparties that are involved in the mortgage supply chain, they all merge and come closer together so that you’re more directly linking the borrower to the investor.

Q: Can you talk about Brightvine Portal, what that provides and how that operates?

A: Yes, so we have three products. The Brightvine Portal, the Brightvine Marketplace and the Brightvine DeFi protocol. The first one going live is the Brightvine Portal, which is what our financial institution, investment managing clients and larger traditional clients use to tokenize their assets and make them available to investors. Either through a primary offering, this could be in the form of a mortgage or even a mortgage-backed security, and then the marketplace. So once I’ve done the primary offering, the marketplace is also for traditional and institutional investors to trade those assets in the secondary marketplace.

Then the DeFi protocol, which will be launched further on down the line. This is really focusing on the public blockchain component, where we are creating actual pools of liquidity on the blockchain that can actually either fund or invest in mortgages.

In other recent proptech news, AppFolio launched an integration marketplace, Stack, to provide third-party integrations within its centralized management platform. Keyway also raised a $25 million Series A for smaller, sub $20 million commercial real estate (CRE) transactions.

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