Australian island Great Keppel Island is set for a tech rejuvenation, backed by blockchain technology and the sale of its own coin offering.
Through a security token offering (STO), investors will be able to purchase Great Keppel Island tokens (GKT tokens), each worth one billionth of the island.
Tim Sommers, founder of Royalti Blockchain Group and co-founder of the Great Keppel Island project, tells StartupSmart the idea came to light when he saw that Tower Holdings, the group that owns the island, was selling it.
Sommers approached the group and suggested tokenising the asset instead, he says.
Royalti was looking for an “asset tokenisation” project in the blockchain space, as opposed to utility tokenisation, which he calls “a fad”.
While typical crypto tokens — usually issued through an initial coin offering (ICO) — represent “a product or service that may never come to market”, asset-backed tokens mean there is “something concrete to fall back on”, Sommers says.
“We identified a fairly run down island with the opportunity to turn it into something magnificent,” he adds.
The initial token sale is pegged to raise $300 million to fund a new commercial airport, hotel, marina and 18-hole golf course designed by Aussie legend Greg Norman.
These will be followed by additional developments, with talks already underway with a “significant realty partner”, Sommers says.
And as well as being backed by blockchain investment, the island will take a tech-first approach to customer experience, with utilities using artificial intelligence, facial recognition and the blockchain, while also taking an eco-friendly stance.
The Queensland government has some “great initiatives around crypto tourism”, Sommers says.
Earlier this year, the towns of Agnes Water and 1770 became Australia’s first dedicated crypto holiday destination, with the help of payments startup TravelbyBit.
According to Sommers, Great Keppel Island will embrace all technologies.
“Blockchain is just the enabler to be able to develop it,” he says.
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The concept of backing a crypto investment with real assets isn’t a new one, and there have been other blockchain land registry projects in the likes of Russia, Georgia, Sweden and the US, but “in terms of the scale, what we’re doing is groundbreaking”, Sommers claims.
Already, before the sale is even open, he has seen “a significant amount of individual investors” committing “in the multi-millions”.
The project’s white paper is due to be released next week, and the STO will be “open for business” for institutional investors a few days after that.
Individuals, however, will have to wait for the project to obtain a specific trading licence, which Sommers predicts will be ready within the month.
Steve Vallas, co-founder of the Blockchain APAC event and a specialist in the technology, tells StartupSmart the Keppel Island STO will get attention simply as “a new asset class people should be investing in”.
Because this is the first time tokens have been backed by property on such a large scale — and because there’s the added bonus of owning part of an island — there will likely be “people who buy for novelty’s sake”.
People are starting to realise that tokenising property is a use case for blockchain that makes sense, Vallas says.
“If you know there’s something behind [the token], it creates a level of safety,” he says,
Vallas predicts more properties will start to become more fluid through tokenisation, with STOs providing an asset, and a promise of a return. Through STOs you can buy “a fraction of anything”, he says, whether that’s artwork, precious metals or, indeed, property.
“ICOs don’t promise a return,” he says.
An STO “becomes a much more traditional business decision”, Vallas adds, but with a more liquid asset.
“Sophistication of these sorts of products will accelerate from here,” he predicts.