Parcl.. Parcl is different from other Solana projects; it enables us to invest in REAL WORLD ASSETS, which is quite unique. Because of this, I had to take a careful approach in my investment at Parcl.
Unlike typical real estate investments, where you predict the price of a certain building or land, in Parcl, we can invest in entire cities. If you want to be successful, you need to judge not individual pieces of land but a whole city, which was quite welcoming for me. I have no experience predicting the price of a specific building, but with my insight into climate change and sea-level rise, I have identified one perfect position.
Brooklyn, full of buzzing energy and flourishing culture, is an amazing place I have visited twice before. It was about eight years ago when I was in junior high, but I can still remember a corner-side pizzeria with a friendly owner offering me a pepperoni pizza. However, bad news for them: I full-shorted Brooklyn.
Let’s start from here: 'Sixth Assessment Report — IPCC (Intergovernmental Panel on Climate Change)'
This report contains a brand new climate change theory that 195 governments(almost every country) approved. It was made by 234 scientists from 66 countries, representing every corner of the world. There are lots of things to look into, but in this post I will assess the impact of sea-level rise.
The above graph is from the IPCC’s sixth assessment report. While it may include some new and challenging terms (I'll explain for you degens), bear with me for a moment. The SSP (Shared Socioeconomic Pathways) scenarios are grounded in human activity. If we increase the production of greenhouse gases and continue to harm the environment, the SSP number will rise accordingly. Examining the graph, under the SSP 5-8.5 scenario, sea levels are projected to rise by almost 1 meter (39 inches).
Imagine what will happen if sea levels rise by 1 meter. Brooklyn is surrounded by water on three sides. Checking the topographic map reveals that no areas are particularly high. Sea-level rise will impact Brooklyn with full force. We might see people taking boat-rides instead of the metro, much like in Venice.
Furthermore, even before sea-level rise becomes a real problem, harsh climate change will directly impact Brooklyn with full-force tornadoes and devastating blizzards.
From our assessment, we could infer that Brooklyn’s real estate prices will decrease. Apartments and shops at ground level will be particularly vulnerable to devastation. Tall buildings might fare better initially, but they won’t stay that way in a long time.
Now, some of you might be wondering why I chose Brooklyn when sea level rise will impact all ocean-side cities (Miami, San Francisco, and many more). The answer lies within Parcl.
Funding fees are a crucial aspect in Parcl. Since we are adopting a super-long-term view in our investments, we need to keep funding fees on our side. If funding rate is positive, long position holders must pay short position holders every day.
At this moment, as I'm writing this post, Brooklyn's funding rate is almost 0.1185%. This means that if I hold a $10,000 short position, I will get $11 as a funding fee every day. Even if Brooklyn's real estate index goes up and I lose my position value, the funding fee will keep me safe from liquidation. Of course, if the funding rate goes negative we might lose money. But don’t worry, as from my research, the funding rate has stayed positive for the majority of the time.
To summarize:
1. Brooklyn’s real estate index will touch bottom due to sea-level rise and climate change.
2. Funding rate of Brooklyn in Parcl will supply me fees everyday (almost).
Hey , it will take several decades for your theory to work. Do you believe that solana and Parcl will stay for that long? Wouldn’t there be a new chain solution like Degen-lana or something?
Yes. Based on my experience in web3, Solana stands out as the best blockchain, offering amazing support for dApps. Parcl is a revolutinary service that will certainly be used by ordinary individuals looking to invest in real estate without the need for substantial capital. Remember, in Parcl, it doesn't matter how much you invest.
Thanks for reading.
(This is not a financial advice)