Land RWA as a Debt Only Instrument

Structured as a “crypto-native bond” secured by land. Fits neatly into today’s RWA DeFi protocols because it mirrors how invoice/debt pools already work.

Land RWA can be a debt-only instrument

• It’s faster, cleaner, and more aligned with current RWA DeFi infrastructure.

• Investors love it because they get fixed yield + land security.

• You can always add equity layers later, but debt is the best way to move fast and close the first $25M.

Land RWA as a Debt Instrument

Why Debt-Only Works Well

1. Simplicity for Investors

   • A debt token is basically a bond: “lend against land, earn fixed yield.”

   • Easier sell to DeFi pools, DAOs, and crypto VCs looking for yield, not management headaches.

2. Stronger Collateral Story

   • Land is perfect for senior debt: finite, durable, appreciating.

   • Investors like having a hard asset backstop with defined repayment terms.

3. Faster to Launch

   • Equity tokenization involves ownership, governance, and long-term structures.

   • Debt tokenization = a loan agreement + NAV collateral + repayment stream → much faster.

4. Regulatory Fit

   • Equity tokens almost always trip securities laws.

   • Debt tokens can be structured more like notes or revenue-backed obligations, which some platforms already handle.

5. Repeatability

   • Every new land parcel = new debt raise → easy to rinse and repeat.

   • You can scale a pipeline of loans without complicated cap tables.

Structure of Debt-Only Land RWA

• Issuer: Land LLC/Trust issues debt tokens to investors.

• Collateral: The land itself (NAV appraisals updated annually or quarterly).

• Terms:

  • Size: e.g. $25M note issuance.

  • Tenor: 2–5 years.

  • Yield: 6–15% (depending on risk appetite + land profile).

• Investor Protections:

  • 1st lien mortgage/charge on land.

  • Post Entitlement Loan-to-Value (LTV) ratio capped at 50–60%.

  • Liquidation waterfall spelled out in smart contract/operating agreement.

Investor Value Proposition

• Yield: High fixed yield (12–15%) for short duration

• Security: 100% asset-backed (direct claim to land title)

• Equity kicker: Optional upside participation (2–3%) sweetens the risk

• Timeframe: Short-term exposure with fast repayment/refi

Entitlement-driven appreciation can retroactively transform a 100% LTV bridge loan into a 50% implied LTV position.

• Investors accept 100% LTV because:

  • Short tenor (6–12 months, not 3 years)

  • Entitlement-driven appreciation gives you a valuation buffer that lenders understand.

  • Entitlement = value creation event. It reduces development risk and boosts liquidity (more potential buyers).

  • Extra protections (lien, direct title claim, GP guarantee)

  • With 50%-60% implied LTV, you can refinance into longer-term debt at lower rates.

  • Higher yield + upside kicker (2–3%)

  • Urgency driver: Early tranche discount for first movers — gets momentum.

• You secure the land immediately, then roll into a safer 60–70% LTV long-term structure once equity/debt tokens are fully placed.

Key Takeaways

• Immediate Value Creation: Passage of entitlements has effectively doubled land value from $25M → $50M.

• Risk Profile Shift: What began as a 100% LTV bridge is now a 50% LTV senior secured loan — comfortably within institutional lending standards.

• Collateral Strength: Debt holders are secured by a hard asset with a wide equity buffer, materially reducing downside exposure.

• Exit Optionality:

  • Refinancing into long-term debt at favorable terms

  • Potential for partial equity sale or recapitalization at higher valuation

  • Debt investors positioned for safe repayment regardless of path chosen

  Investor Value Proposition

  • Fixed high yield (12–15% annualized during bridge term)

  • Collateralized by land with 50% implied LTV post-entitlement

  • Short tenor (6–12 months) with clear repayment/refinance strategy

  • Downside protected by substantial equity cushion created through entitlement