Fabrica Trust

Fabrica's trust model was developed based on a variety of inputs and theory, and honed over seven years of practice and experience. Fabrica's trust model has been used in the transfer of millions of dollars worth of real estate, involving hundreds of properties across close to a dozen states.

Trusts involve two positions, a beneficiary and a trustee. In the Fabrica trust, the trustee has very limited duties, including the duty to sign documents on instruction by the beneficiary when required. The beneficiary (defined as the person or entity that owns the token) has full control and ownership of the property, and is entitled to any rights of ownership that are legally bestowed on the owners of the property.

The Fabrica trust is a bespoke entity, what we call a "nominal trust." The purpose of the trust is to allow the token holder to own and to manage ownership of the specified property using blockchain. It is purposely lightweight, and always defaults to the token holder receiving as much right to the property as possible.

Fabrica's trust model is like a signpost at the county records. Wherever ownership of the NFT goes, beneficial ownership follows, while ownership on record stays within the trust.

This trust model, while somewhat exotic, allows for as close of a connection as possible between the NFT and the property. In this model the nominal trust is not treated as an independent entity from the beneficial owner for tax or legal purposes, and does not involve a third party trustee with decision making rights (unless a beneficiary chose to nominate one). It is as close to a decentralized real estate model as has been conceivable up to this point.

We feel confident in our trust model, and believe it should be the primitive for owning and representing property onchain. Despite this, the Fabrica trust has never been brought before a court of law, and property owners should be aware that they are using their property in a way that is not contemplated by the vast majority of real estate professionals and service providers. We're blazing a new model of ownership, and there will be hurdles to overcome along the way.

In 2024, the Fabrica Trust was released as Open Source, and you can review changes and participate in improving directly on GitHub: https://github.com/fabrica-land/fabrica-connectors