---
# System prepended metadata

title: 'Fractional finance :money_with_wings:'

---

# Fractional finance :money_with_wings: 
## Frabric Protocol

Frabric protocol enables individuals to invest in real estate assets without needing to have full ownership of the property. It democratizes the way real estate assets have been managed over years, removing entry barriers to investors with fewer capital amounts and empowering them with the opportunity of voting on important decisions, affecting real change in how their investments grow. 
## As-is process
The world of real estate hasn't materially changed in hundreds of years. To buy a house, or any kind of property, tipycally you must buy all of it.
![](https://i.imgur.com/Y8d3czN.png)


## To-be process with Frabric Protocol
![](https://i.imgur.com/fsugImY.png)


### Thread 

As previously mentioned, Frabric is a protocol that enables decentralized ownership of real-world assets, and it does this by creating Threads. A Thread is a self-contained revenue-generating Decentralized Autonomous Organizations (DAO), capable of legally owning a physical entity or asset.

Threads are one of the most important components of Frabric and each thread is composed by a different number of nodes with different shares and voting power over the asset. Together, these nodes integrate the DAO that owns the property. t can also be seen as a collection of contracts, that enable interactions between nodes with different kinds of roles. 

### ERC20 and Tokenization

ERC20 is the technical standard token of Etherium and NFT, which is the token with the function of representing ownership of unique items, like an asset. 

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Threads can communicate with the different types of nodes through a  communication layer divided into 2 parts:

### Asset Bridge

It enables the nodes to change the currencies between Fiat and $SC. When a new thread with a property is created, an asset bridge is required. In order to do that it is transported to a  corporate entity called Special Purpose Vehicle (SPV). Once inside the SPV, the property is secure, but the SPV by itself cannot interact with the blockchain. For that purpose, there is the Fabric Proxy which is an individual or organization whose sole responsibility is to listen to the votes of the nodes through the threaded bridge. Nodes can vote on different matters such as rent increases, legal contract renewals, or new service providers. For every decision, a voting round needs to be assessed to reach an agreement.

### Service Bridge: 

The purpose of the Service Bridge is to transport the value between entities within the Fabric network, which are entirely in $SC. These Service Bridges connect to other Threads, some of these being service providers. 

## Contracts
### Dao Contract
The DAO contract enables threads to create and vote over different types of proposals.
### Asset Contract
This contains information about the asset owned by a particular thread and contains functions to create proposals and to vote over them.

#### Asset constructor
The asset contract contains information about the platform address in which operations will be hels; the NFT to be used; the asset custodian (oracle) which is an agent that is legally linked to the entity, and the shares related to the asset.

```solidity=0.8.7
 constructor(
    address platform,
    address _oracle,
    uint256 nft,
    uint256 shares,
    string memory symbol
  ) AssetERC20(platform, nft, shares, symbol) {
    votes = shares;
    oracle = _oracle;
  }
```


In order to create a proposal, three conditions have to be 

1- The nodes have to actively have shares of the property, no matter the proportion of the shares; just having a share gives you voting power and the possibility of creating proposals.

2- Platform contract manages all assets and its own by fractional finance. Fractional Finance is capable of creating proposals in any asset contract

3-Every asset contract specifies a custodian, which is a property management entity that is the one with the legal custody over the property. The custodian is responsible for following the will of the voters.

Contracts:

-Proposal paper: no impact on the functional perspective of the contract. On real-life matters, that does not involve blockchain.

-Propose platform change: Allows owners to vote to leave the platform willingly. Under the condition of a unanimous vote.

-Propose oracle Change: To change the custodian to another approved custodian  

-Propose Dissolution: It is used in the event of nodes wanting to leave the platform and the asest ownership, in that case, the nodes can propose a dissolution and thus buy the corresponding shares of the other investors.



