{"id":15606,"date":"2025-04-01T12:54:00","date_gmt":"2025-04-01T12:54:00","guid":{"rendered":"https:\/\/hederav2stg.wpenginepowered.com\/blog\/how-can-we-model-a-building-in-web3\/"},"modified":"2025-12-08T18:08:03","modified_gmt":"2025-12-08T18:08:03","slug":"how-can-we-model-a-building-in-web3","status":"publish","type":"post","link":"https:\/\/hedera.com\/blog\/how-can-we-model-a-building-in-web3\/","title":{"rendered":"How Can We Model a Building in Web3?"},"content":{"rendered":"
\n

REITs in Web3<\/em><\/h4>\n

Part 1: How Would We Build a REIT Today Using Web3 Technologies?<\/a>
Part 2: How Is Tokenization Changing The Way We Invest?<\/a>
Part 3: How Can We Model a Building in Web3?<\/a><\/strong>
Part 4: How Can We Model a Building in Web3? (Continued)<\/a>
Part 5: Reimagining REIT Cashflows: Managing Revenue and Expenses in Web3<\/a>
Part 6: Governance & Jurisdiction in Tokenized Real Estate<\/a><\/em>
Part 7: <\/em>Slices: Building The Web3 Real Estate Index Fund<\/a><\/em><\/p>\n

REITs in Web3: Part 3<\/h4>\n

In our first post<\/strong><\/a> in this series, we explored how Web3 technologies could be used to build a modern REIT with tokenized real estate assets. In our second post<\/strong><\/a>, we discussed tokenization in general and how both non-fungible tokens (NFTs) and fungible tokens can each play a role in real estate.<\/p>\n

Today, let\u2019s focus on a single question:<\/p>\n

How do we actually model an individual building on-chain?<\/em><\/strong><\/p>\n

In our implementation, a building would – at a high level – be represented by a custom contract that would be the \u2018owner\u2019 of connected, supporting contracts that enable the functionalities of the building itself and its stakeholders.<\/p>\n

Each building would be a set of contracts that would allow it to independently manage itself in a decentralized fashion. We decided that a NFT should be used to specify all the metadata about the building, so that standard NFT tools could use that data in a common way. Therefore, each building could be thought of as a NFT in a NFT collection. A Building NFT in such a collection will have its assigned metadata, but a building will also have at least one assigned vault, a treasury, building tokens representing shares for this building, and a related governance contract to make the entire solution work.<\/p>\n

So while many of the fundamentals are already familiar from the first and second posts in this series, here we introduce the nitty-gritty of \u201cbuilding deployment.\u201d We\u2019ll discuss three key pieces:<\/p>\n

    \n
  1. \n

    Representing the physical building on chain<\/strong><\/p>\n<\/li>\n

  2. \n

    Representing real-world property data<\/strong> – For example: a pinned JSON file in IPFS (via Pinata<\/a>, Filecoin, or other decentralized storage solutions) and the on-chain references to that data.<\/p>\n<\/li>\n

  3. \n

    Deploying the building<\/strong> – Using a \u201cbuilding factory\u201d contract that automatically creates the building\u2019s metadata NFT (and other parts to be discussed in later articles).<\/p>\n<\/li>\n<\/ol>\n

    \n

    We\u2019ll walk through code snippets drawn from the Hedera Accelerator DeFi EIP repository<\/a> to show how these ideas come to life, especially ERC721Metadata.sol<\/a> & everything in the buildings contract <\/a>subdirectory.<\/p>\n

    \n

    This codebase is still in progress and therefore unaudited, but the logic of how to deploy a building is there and ready to be examined. As we move on in this series, this repository will grow and be polished on a rolling basis, and we will also introduce the frontend in the coming weeks.<\/p>\n

    1.<\/strong> Modeling the Building NFT (ERC-721)<\/strong><\/h4>\n

    <\/h4>\n

    A Physical Asset, Off-Chain<\/strong><\/h4>\n

    At the core of this entire process is a physical property: the actual building sitting at some address in the real world. This building has a certain location and size in square feet, has been built in a certain year, and can be in a residential or urban area.<\/p>\n

    All these attributes matter tremendously in real estate investments, but the challenge is making them discoverable and provable in the context of the blockchain. That\u2019s where the NFT comes in.<\/p>\n

    Each property is represented by a NFT.<\/strong> We issue one NFT per building, so each NFT is truly unique, just like the real-world building it represents.<\/p>\n

    This NFT is more than a collectible image, and serves multiple purposes:<\/p>\n