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This article is the second part of our content that explains How Security Tokens Bring Fair Distribution of Value.
This triptych has benefits for both parties. As you can see, for RealT, these savings allow you to redeploy this budget in its growth and in the development of your expectations.
For token holders using Request.Network, it allows you to reserve your RealTokens compared to an investor wishing to pay by credit card as he has to write down his credit card number. Thanks to the RealT ecosystem, our investors can learn and get a step-by-step foothold in decentralized finance and the finance of the future.
Fees: the problem of traditional banks
Today, when you pay by credit card, you have several different fees that can occur in the transaction. If you are in a traditional bank and you live in a country where your national currency is different from the $, it is not uncommon to have 3 different fees:
- A fixed fee
- A variable fee
- A spread
Many traditional banks will charge you a fee between $0.50 and $2.00 if you make a transaction with a currency other than your national currency. These banks will also charge you a percentage of the transaction amount. On average this fee is between 1% and 3%. For the purchase of a RealToken, you will have to pay a fee ranging from $1.00 to $3.50. These fees directly impact the profitability of your investment.
In the last few years, “neobanks” have appeared on the market. Most of them have eliminated the first two fees but the spread is still present and it is an invisible cost for the investor. The spread is the difference between the buy or sell price and the actual order placement, typically between 0.8% and 2%.
Example: You decide to buy a RealToken 14409 Linnhurst for $50.16 with your neobank.
We can see that you paid 47.92€ to buy this RealToken. At the same time, it is interesting to see at what rate the USD/EUR pair is exchanged. These 2 websites tell us that currently $1.00 is exchanged for 0.94630€.
At the market rate, the RealToken should not have cost 47.92€ but 47.47€. The spread on this transaction is therefore 0.94%. Depending on the currency and the bank this spread varies on average between 0.8% and 2%.
Exchange rate EUR / USD
Web3 bank: Innovation on the way
At the same time we looked at the exchange rate between the wXDAI and the jEUR. As a reminder, the wXDAI is a stablecoin following the dollar rate and the jEUR is a synthetic stablecoin following the euro rate.
As you can see, on Jarvis, the USD/EUR rate is very close to the 2 websites above:
If you had purchased your RealToken with wXDAI, you would have paid 47.24€. You would have paid slightly less than the amount indicated on the websites because the price of wXDAI would not have been exactly $1.00.
In addition, the Jarvis protocol takes a 0.2% fee on the exchange, which is much more competitive than the 0.94% spread fee calculated earlier. On the screenshot the fee is mentioned in the Protocol Fee section for an amount of 0.10032 wXDAI. In this example, there is a difference of 0.68€, or 1.4%, between paying by credit card and paying by blockchain.
For you, the opposite reasoning may make more sense:
- With your neobank you paid 47.92€ to buy a $50.16 RealToken.
- With 47.92€ and thanks to Jarvis, you could have bought a RealToken for $50.67.
Now, you probably have 2 questions:
- How do I get xDai on the Gnosis blockchain?
- How do I pay for my order with xDai?
Well…
Mt Pelerin provides a fiat on- and off-ramp
With Mt Pelerin, you can transfer euros and receive jEUR or xDai or other jFiat directly on the blockchain of your choice. You can also send jEUR or other jFIAT directly from the blockchain to your bank account.
In addition to this article, you can watch our youtube tutorial that guides you step by step:
https://rebrandly.realt.co/tutorial-request.
The first step will be to download the Mt Pelerin application by clicking here. Then you can buy xDai or jEUR by bank transfer or credit card. By bank transfer you can buy up to $500 without fees. For jEUR and other jFiat*, you can buy up to $100k per year without any fees for the moment.
*Mt Pelerin and Jarvis offer other synthetic currencies, and we will be doing more tutorials for some of these currencies soon.
Our tip: if this is your first transaction on the Bridge wallet app, we recommend that you make an initial transfer of less than $500 to buy xDai to avoid paying fees. We recommend that you always keep at least 0.1 xDai to pay the transaction fees on the Gnosis blockchain. With 0.1 xDai you can make dozens of transactions.
In our video tutorial we already had some xDai. We exchanged euros for jEUR because currently there are no fees up to $100,000 per year. This cap will be more than enough for 99% of the investors.
A small aside
Wire transfer funds may take a few days to move between your bank account and the bridge wallet.
We are aware that announcing the sale of our properties only 24 hours in advance can be short notice for some of you. We will try to announce the properties earlier in the future so that you have more time to analyze the offer and to organize yourselves.
On your side, you can, for example, make a transfer from your bank to the bridge wallet at the beginning of the month with the budget you want to invest with RealT. You can also directly set up a recurring transfer between your bank and the bridge wallet application. With the launch of the RMM, you can deposit your xDai in 2 clicks and earn interest. Today the US bond rate and the deposit rate on RMM are both close to 3%!
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RMM deposit rate
US 10-year bond rate in early June
Every week, with 2 clicks, you can withdraw a part of the xDai deposited on the RMM to buy RealTokens. During this week, you will have received interest on your deposit.
Let’s go back to our case study.
- You have exchanged your euros for jEUR.
- Directly on the Mt Pelerin application you can swap your jEUR for wXDAI, then swap these wXDAI for xDai in 2 clicks. Watch our video tutorial if you want to see the different steps.
- You can now go to realt.co and buy your RealTokens. At the checkout stage, you will need to select “Pay on Gnosis Chain” and select xDai.
A few minutes later, you will receive an email to pay your order through our partner, Request.Network.
Our video tutorial shows you step by step how to install the Bridge wallet application developed by Mt Pelerin, how to deposit your first €, how to exchange them for xDai and how to pay your first bill with Request, all within 3 minutes.
Conclusion: With us, be part of this revolution
In this article, we have just seen how blockchain, tokenization and DEFI allow better redistribution value to stakeholders by cutting out many unnecessary intermediaries. Paradoxically, 50% of our customers still pay by credit card. This behavior has a significant cost for RealT and for you!
For RealT, it is an average of 3.5%/4% in fees, which represents 35% to 40% of our gross margin.
For you, depending on your bank, you pay between 0.94% and 8% in fees, which strongly impacts the profitability of your investment.
On the other hand, with Request Network RealT pays only 0.1% in fees. On your side, you pay only 0.2% in fees (exchange of jEUR into wXDAI) and a few thousandths of a dollar in transaction fees, which is much more efficient than the spread.
For all these reasons, RealT has taken the decision to implement a 2% fee on credit cards in order to share the cost for RealT and encourage you to use our DEFI partners.
By using these solutions, you are early adopters and you are the closest to innovation. It is therefore possible that at times RealT or one of its partners may experience some technical problems. We ask you to be patient. Together, we are creating the finance of the future. And don’t forget: at the bottom right of our website, you have an orange bubble where Philippe, Hyacinthe, Raphaël and Alex are available to answer your questions!
