We quantify Non Fungible Token (NFT) rarity and investigate how it impacts market behaviour by analysing a dataset of 3.7M transactions collected between January 2018 and June 2022, involving 1.4M NFTs distributed across 410 collections. First, we consider the rarity of an NFT based on the set of human-readable attributes it possesses and show that most collections present heterogeneous rarity patterns, with few rare NFTs and a large number of more common ones. Then, we analyze market performance and show that, on average, rarer NFTs: (i) sell for higher prices, (ii) are traded less frequently, (iii) guarantee higher returns on investment (ROIs), and (iv) are less risky, i.e., less prone to yield negative returns. We anticipate that these findings will be of interest to researchers as well as NFT creators, collectors, and traders.
We develop a model of property taxation and characterize equilibria under three alternative taxation regimes often used in the public finance literature: decentralized taxation, centralized taxation, and “rent seeking” regimes. We show that decentralized taxation results in inefficiently high tax rates, whereas centralized taxation yields a common optimal tax rate, and tax rates in the rent-seeking regime can be either inefficiently high or low. We quantify the effects of switching from the observed tax system to the three regimes for Japan and Germany. The decentralized or rent-seeking regime best describes the Japanese tax system, whereas the centralized regime does so for Germany. We also quantify the welfare effects of regime changes.
The rapid rise of cryptocurrency prices led to concerns (e.g. the Financial Stability Board) that this wealth accumulation could detrimentally spill over into other parts of the economy, but evidence is limited. We exploit the tendency for metaverses to issue their own cryptocurrencies along with non-fungible tokens (NFTs) representing virtual real estate ownership (LAND) to provide evidence of the wealth effect. Cryptocurrency prices and their corresponding real estate prices are highly correlated (more than 0.96), and cryptocurrency prices Granger cause LAND prices. This metaverse bubble reminisces the 1920s American real estate bubble that preceded the 1929 stock market crash.
Kanis Saengchote, Tālis J. Putniņš, Krislert Samphantharak
Decentralized Finance (DeFi) is built on a fundamentally different paradigm: rather than having to trust individuals and institutions, participants in DeFi potentially only have to trust computer code that is enforced by a decentralized network of computers. We examine a natural experiment that exogenously stress tests this alternative paradigm by revealing the identities of individuals associated with a DeFi protocol, including a convicted criminal. We find that, in practice, DeFi does not (yet) fully remove the need for trust in individuals. Our findings suggest that that because smart contracts are incomplete, they are subject to run risk (Allen and Gale, 2004) and personal character and trust of individuals are still relevant in this alternative financial system.
This article provides an overview of the non-fungible tokens (NFTs) as an investment class. The first part focuses on the NFT infrastructure including the NFT primary and secondary markets, different types of NFT exchanges, NFT aggregators, NFT borrowing and landing, NFT staking, and finally NFT fundraising. The second part investigates the leading blue-chip NFT collections and their performance in the short- and long-term, both during the bull and bear markets. Analyzing close to two million NFT transactions, we find that profile picture (PFP) NFTs dominate the NFT market and yield exceptionally high returns both on the raw and market-adjusted basis. For example, NFTs from the collection Bored Ape Yacht Club (BAYC) deliver a buy-and-hold return of close to 2,000%. Furthermore, NFTs from other categories (art, gaming, metaverse) do not perform as well as PFPs, however, they outperform the cryptocurrency market by roughly 100%.
This study aims to evaluate and analyze the implementation effect by central government of the housing rental market in different cities in the context of rent and purchase in parallel. Game theory and panel data empirical analysis were used to study the subsidy transmission mechanism of the development of the housing rental market under the perspective of financial decentralization. The central finance played an indirect role in the development of the local housing rental market, and the local government’s support for the local housing rental market was an intermediary variable. To promote the rapid and healthy development of the domestic housing rental market, the central government needs to make top-level design and give certain local policies and financial support. At the same time, local governments must actively implement relevant policies of the central government and support corresponding local support policies.
The main focus of this paper is to analyze the effect of local public finance on spatial land use through economic models and empirical evidence from Israel. The theoretic models extends the Alonso-Mill-Muth model by incorporating local public finance. The first finding is that steady population growth provides a channel for land capitalization through the mechanism of long term land property right. This implies a possible conflict of interest if ownership of land leasing revenue and the ad valorem property tax are not consistent. The empirical section examines one of the implications derived from the models highlighting a possible inconsistency between central and local governments due to land ownership centralization. This causes local tax revenue inequality among Israeli municipalities. Statistical evidence shows that cities with a larger share business land use can generate more tax without assistance from the central government, and are therefore more fiscal independent. Fiscal status has a significant effect on the planning time of residential construction. Municipalities with higher local tax revenues have shorter planning time(higher probability of acceptance) conditional on the plan’s size and other features.
In this paper I argue that the 2008 housing market crash was the culmination of a decades-long legislative process enabled by the federal government. I analyze the effects of these policies on Monroe County, Pennsylvania, which became and continues to be the site of one the worst foreclosure crises nationally. Federal policies that promoted decentralization, deindustrialization, and deregulation created the conditions in Monroe County that allowed real estate developers, banks, and brokers to take advantage of an urban crisis that was only 1.5 hours away in New York City—without traffic. I describe the process through the story of real estate developer Gene Percudani. Enabled by the federal government, Percudani lured black and Hispanic residents from New York City who were looking for affordable single family homes, safe neighborhoods, and good schools. Not only did these migrants not escape the urban crisis but continued to be victims of it—far away from home.
Your client may own non-fungible tokens (NFTs) and ask you for estate planning advice. Would you be caught off-guard and give your client the classic “deer in the headlights” look? Obviously, that would not be prudent. To make sure this doesn’t happen to you, this article uses a FAQ approach to provide you with the background and information you need so that you will understand NFTs and how to give your client sage advice on how to handle them during the client’s lifetime and upon death.
Cardano was launched in October 2017 and by May 2021 has been operational for 44 months. Comparison with its closest rival, Ethereum, reveals that their prices are highly correlated but the change in daily closing prices do not always move in unison. Cardano is also more volatile than Ethereum and In terms of growth Cardano is lagging behind. Cardano’s only saving grace is its transaction fees, which are considerably lower than Ethereum. However, care must be taken in understanding the structure of any data source. In this case three data sources are used and results vary depending on the precision of the price data, particularly Cardano which for a number of years did not trade above one dollar.
Nikolai Siniak, Tom Kauko, Sergey Shavrov, Ninoslav Marina
Abstract The real estate industry is currently undergoing a digital transformation that not only changes its nature in terms of the markets and work environments, but is also influencing its growth. What are the main trends and concerns related to this transformation? To what extent is the real estate industry already prepared for this? This paper reviews the situation in terms of the emergence of a phenomenon known as PropTech. PropTech is characterized by the massive implementation of emerging technology such as home matching tools, drones, virtual reality, building information modelling (BIM), data analytics tools, artificial intelligence (AI), Internet of Things (IoT) and blockchain, smart contracts, crowdfunding in the real estate sector, fintechs related to real estate, smart cities, regions, smart homes and shared economy. This survey of changes in the real estate industry due to PropTech covers four areas: (1) PropTech applications in the real estate industry; (2) implications of PropTech for real estate market transparency; (3) how PropTech could give a region or a company a competitive advantage; and (4) concerns on the wider implications of these changes on a labour market and education. In a plausible scenario, changing the real estate technologies could change system dynamics and improve real estate market transparency. Moreover, it can be asserted that, in a broader sense, PropTech is beneficial for territorial competition and territorial growth strategies. And lastly, under different institutional arrangements, PropTech can affect the changing structure of the real estate market, the demand for hi-tech, new skills as well as emerging policy challenges for the real estate industry.
In developed countries, urban growth has multiplied the demand for investment in basic infrastructure services such as water supply, waste removal, roads and mass transportation. At the same time, decentralization strategies have shifted the responsibility for much of these investments to the local governments. This decentralized investment requires the development of decentralized capital financing. No longer can a central government pay for local investment by raising national taxes or borrowings on international markets and using the funds simply to construct projects at the local level. The introduction of municipal bonds is one of the alternative source of funds to finance the escalating costs of financing local governments. This paper discusses the conditions underlying the development of municipal credit markets, which Malaysia can use to provide a vehicle to narrow the local government’s resource gap through debt funding.
The modern financial technology (“FinTech”) revolution has two features that distinguish it from previous eras of innovation: (1) Consumers have greater access to financial information and applications using smartphones on high-speed networks; and (2) businesses benefit from dramatically lower costs, improved performance, and enhanced options in data storage, computation, and application development. The once monolithic and proprietary financial services industry is being challenged under the zeitgeist of decentralization, disintermediation, and open protocols. Consequently, households in the United States are witnessing the emergence of new options for investment, credit, insurance, and payments. We illustrate how several influential FinTech trends may help address biases and constraints that hamper households in smoothing intertemporal consumption.
The real estate industry has been one of China’s pillar industries over the last two decades, but soaring housing prices and overheated investments have hindered the sustainable development of the economy. Land transfer fee is a critical determinant of housing prices under the current land reserve system in China and also the main revenue resource for local governments. The reliance of local governments on land-leasing fees as their dominant source of revenue is usually referred as “land finance”, which started from fiscal decentralization and tax sharing reform in 1990s and created a mismatch between revenue distribution and expenditure responsibility for local governments. Therefore, against the background of tax sharing reform, this study analyzes the hypothesis that the degree of fiscal decentralization and the land finance phenomenon are important factors causing China’s soaring housing prices. In addition, land finance is the intermediate variable linking tax reform and high housing prices. Using panel data covering 31 provinces and municipality cities in China from 2000 to 2009, the research finds that enlarged fiscal decentralization caused by the reform of the tax-sharing system is an indispensable institutional factor leading to the rapid rise of housing prices. This study presents a comprehensive influence mechanism of fiscal decentralization on housing price, contributing to the understanding of local governments’ behavior and provides recommendations for the future urban development.
Combining the location characteristics of provincial capitals and municipalities, from the perspective of fiscal financial decentralization system, the different expansion of local debt financing platform is studied to find out that the degree of financial fiscal decentralization is the main institutional incentives of local financing platform debt expansion difference, and Shanghai and Hangzhou have obvious location advantages. The advantages of these factors may include the development of the financial industry, the development of the Internet and other factors.
Darío Cestau, Burton Hollifield, Dan Li, Norman Schürhoff
The effective functioning of the municipal bond market is crucial for the provision of public services, as it is the largest capital market for state and municipal issuers. Prior research has documented tax, credit, liquidity, and segmentation effects in municipal bonds. Recent regulatory initiatives to improve transparency have made granular trade data available to researchers, rendering the municipal bond market a natural laboratory for the study of financial intermediation, asset pricing in decentralized markets, and local public finance. Trade-by-trade studies have found large trading costs, contemporaneous price dispersion, and other deviations from the law of one price. More research is required to understand optimal market design and the impact of post-crisis regulation, sustainability, and financial technology.