Tokenization Spotlight: Outsyde Tokenizes Land Ownership for Good

Real estate is illiquid. There are ongoing efforts to measure how illiquidity impacts returns, but it remains true that land ownership is decidedly analog, with cumbersome intermediaries, high fee-extraction, and a huge barrier to entry.

Blockchain offers the opportunity to democratically open up this illiquid market and more fully capture the value of what any piece of land might offer: Biodiversity credits, conservation, low impact renewable energy, and so forth.

Outsyde is blazing this path forward, anticipating a market need for transparent and forward-looking land ownership. By tokenizing property rights, Outsyde enables partners and third party service providers to monetize opportunities on the land, whether that’s offering quality carbon offsets or providing a seamless, easy way for people to own a fraction of real estate they’d never have been able to afford otherwise.

With Outsyde, the use cases for how the land can be monetized are endless, from sustainable forestry to outdoor recreation to mitigation banking. Outsyde is demonstrating the power of blockchain to transparently take land ownership online. 

In this Q&A, we speak with Outsyde founder and CEO Aaron Bumgarner about how tokenizing land rights increases efficiency, the trajectory for mass adoption, and the future of Outsyde.

The ELI5 of Outsyde

In short, this is what Outsyde does: Tokenizes land to make it a liquid and tradable asset. We work with partners and third party service providers to monetize opportunities on the land, from outdoor recreation to conservation to low-impact solar and more.

On how Outsyde got started

I grew up on a farm in Western North Carolina, around agricultural land conservation, so I’ve always had a sense of what it means to be outside. Later, I developed a forestry company that worked with private landowners across Virginia and North Carolina that essentially was a consultation service for forest and wildlife management and habitat restoration. 

So in 2019, we started a company that eventually became Outsyde, which was a traditional asset management company, raising money to buy land to use in the traditional carbon and biodiversity markets, while also looking at renewable energy opportunities in outdoor recreation. 

And then we saw, in 2020, the metaverse craze, raising hundreds of millions of dollars for digital properties, while we were trying to buy real land. 

So we started to explore the space and pretty immediately recognized a huge opportunity for tokenization–the real land, real trees, dirt, minerals in the ground–in order to more seamlessly tap the carbon market. And so we began to pivot, hard, in early 2021–and here we are today. 

We began by tokenizing a tract of land in Southwest Virginia, 392 acres. We tokenized the minerals, so we use NFTs to keep 100 million tonnes of coal in the ground for the avoidance of carbon emissions. That’s 9 million metric tonnes of offsets. 

We learned from that, and figured out: okay, let’s tokenize land to make it a liquid and tradeable asset, and work with partners and third party service providers to monetize opportunities on the land. That’s how Outysde got started.

On bridging traditional real estate with tokenization

First, it’s important to note that what tokenized real estate can do is more fully monetize a property’s potential, and then make that property more accessible to a wider range of people. The Virginia property I mentioned before, which was the first of many—like a thousand acres recently tokenized in New York—is remarkable because the coal was slated to be mined. This means we were able to mint carbon credits based on the avoidance of carbon emissions.

What tokenization unlocks, in that case, is a liquid market for coal that’s in the ground, and that otherwise would have been burned. The mineral rights themselves are tokenized, and an underappreciated aspect of the land could be made visible to the market.

The same can be done for other kinds of activities or value that any piece of property might have, and for landowners who want to monetize it. And with Outsyde’s boots-on-the-ground expertise, there are methodologically sound ways to mint land and real estate and more efficiently introduce fractionalized land NFTs into the market. 

Which is basically the value proposition of tokenization: Bridging the efficiency gap of traditional real estate markets, which can be slow and illiquid, with the liquidity and speed of tokenization.

On the trajectory for mass adoption

Outsyde takes land, tokenizes the deeded ownership of the land, and works with third-party partners to drive revenue from the land. As I’ve mentioned, the use cases for what this looks like vary wildly, and will arise from the particular needs of particular parcels.

So, first, tokenization. Following that, what we’re really focused on now is taking land to the institutional marketplace. I think the way things will flow is like this: You start with a crypto-native world, but in order to scale higher, you have to go to the institutional markets. 

And on the other side of the institutional market, is widespread, mass-scale adoption. That’s the flow I see, crypto-native to institutional to mass adoption.  

(Congratulations! You’ve found the s-ecr-et w–o-rd: unburned.)

On what Outsyde looks like in five years

So the ultimate goal is to merge a robust Web3 tokenization market that will be flourishing across the globe with a market in the United States. That means breaking down walls of adoption. How we can achieve this is by ramping up the tech. Hopefully we’ll be listed on multiple exchanges around the world, trading as a public company. 

The end-goal is for users to be able to access a mobile application or website where you can buy or invest in land with the click of a button, whether that’s in Alabama, Georgia, or maybe Brazil, with different aspects of monetization for the land, suited to the interests of the buyers. 

That’s the vision, and we’re working hard to get there! 

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Be sure to follow Bumgarner on X, formerly Twitter, (@NCLongleaf), and keep up-to-date with Outsyde’s journey. 

This was the third installment of Tokenization Spotlight! Through a series of interviews, readers will learn what tokenization means, what it democratizes, how it can transform different industries, and get to know some of the projects building tokenization use cases with Polygon technology.

Each Spotlight in the series is part of a campaign on Galxe. 

Now that you’ve finished reading, head over to Galxe and type in the password, buried in the post above, to be eligible to mint an NFT that corresponds to this article. The theme is New Frontiers, and the third NFT trait is “The Farmer.” 

Tune into the blog and our social channels to keep up with updates about the Polygon ecosystem.

Together, we can build an equitable future for all through the mass adoption of Web3.

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