With Spl.yt you don’t have to be a millionaire to contemplate owning a Lamborghini. By splitting the cost and care fairly between several owners, verified and regulated by smart contracts using the Spl.yt protocol, two or more drivers could share the privileges — along with the responsibilities, of course — of owning a luxury sports car like a Lamborghini.
You might be thinking, “is this like a timeshare owned by several people?” Well, not exactly. In the traditional version of a “timeshare” for resort property, for instance, people don’t actually own the asset; they pay to rent it. This is because most timeshares are not structured as shared deeded ownerships but as shared leased ownerships, where the developer owns the deeded title to the property, and each timeshare owner holds a leased interest in the property. A typical lease agreement entitles the owner to use the property for a set week/year, or a “floating” week during a set of dates. This kind of complex record-keeping requires middle men, which incurs added expense, which is passed on to the buyers, of course.
A leased ownership generally restricts property transfers more than a true deeded ownership interest. So as an owner of a timeshare, you might be restricted from selling or transferring your timeshare to someone else.
Ellen Shapiro, of the law firm Goodman, Shapiro & Lombardi in Dedham, Massachusetts, said of timeshares:
“You’re buying the right to use the locus. You don’t exactly have full legal title…You can convey, sell, leave it to your heirs, or perhaps — depending on the timeshare — rent it out, but you don’t have the entire bundle of rights. At the end of the day, you own a right to use a space during a prescribed time.”
Fun fact: according to industry statistics, 50% to 70% of the timeshare retail price paid after a buyer has listened to an elaborate sales pitch, goes towards marketing. So, for example, if you purchase a timeshare for $20,000, as soon as you leave the presentation room, the true value of the timeshare drops to as low as $6,000! This takes paying for the middleman to new heights, with just one of the middlemen taking a huge cut. Not exactly ideal for a buyer.
The Spl.yt protocol challenges and upgrades that tired paradigm, enabling users to “timeshare anything” without the need for middlemen to drive up prices. This solution could be used to purchase all kinds of expensive assets, such as cars, boats, homes, jewelry, filmmaking equipment, musical instruments, sports or theater season tickets, artwork and other collectors’ items. The various owners can also collectively set the parameters to determine what services to hire to facilitate use and maintenance of the asset, giving rise to an “Uber-like” economy of service providers who cater to fractional assets.
“Timeshare anything without the need for middlemen to drive up prices by using the Spl.yt Protocol.”
Not only does fractional ownership offer opportunities to people who otherwise may not be able to afford or maintain expensive assets on their own, it also provides sellers of these assets with an entirely new consumer base. Assets such as artwork are generally thought to be highly “illiquid,” meaning that even though a work of art may generate a handsome return on investment, finding a buyer can be extremely difficult. One way to increase liquidity in a market, is to increase the number of potential buyers. By enabling fractional ownership, Spl.yt has the potential to expand the buyer pool by a significant percentage. Spl.yt’s protocol can automatically initiate and run digital auctions, eliminating the need for auction houses, which inevitably take a percentage of the final sale — money out of the seller’s pocket.
Given the obvious advantages of fractional ownership to buyers and sellers, why hasn’t this capability been invented previously? The short answer is that the technology to facilitate the sale, use, and maintenance of fractionally-owned assets simply hadn’t been invented until recently. This technology is, of course, blockchain.
Spl.yt uses smart contracts, which are essentially blockchain-based applications, to automate the many transactions involved in the sale, use, and maintenance of fractionally-owned assets. In other words, a process that would normally require intermediaries to carry out (sometimes at such high cost that they wouldn’t be profitable under traditional frameworks), can be simply executed by technology. For example, say two owners of a vacation home want to use the property over the Fourth of July weekend. This process might play out in the below manner:
- Alice and Bob each deposit a small amount of Spl.yt tokens (SATs) in order to request use of the property on the same Fourth of July weekend.
- Because the two parties requested the same dates, a bidding process is initiated.
- Alice bids more than Bob, and so she earns the right to use the property.
- Bob’s tokens are returned for him to use on another timeslot’s reservation.
We’re only beginning to realize the potential of blockchain technology, but fractional ownership is certainly one example of how blockchain can give rise to new opportunities that were never before possible. While the Spl.yt community is working to solve the technical problems to make these, the only question that remains for you is: are you ready for your Lamborghini now, or what?