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StayBit, a Blockchain project founded in California, started beta testing technology aimed at combating fraud and reducing transaction costs for short-term property rentals. As a smart contract on the Ethereum network, StayBit provides a safe and reliable payment solution.
Often called “vacation rentals”, the short-term rental market consists of mostly individual owners, small property management companies and real estate brokers who offer their properties to travelers. This market is often considered as an alternative to the hotel industry, but unlike hotel industry, the VR market is hugely fragmented. You can find expensive mansions with breathtaking views as well as single rooms in Skid Row, and all are offered via multiple VR listing platforms. Unfortunately, the vacation rental market does not have any unified rating system, unlike hotels who have common star ratings. Travelers may also not be sure if the reserved property will be the same as advertised, or if it exists at all. The way their hosts will treat them may also be a surprise.
Currently, the only viable options for guests to find good deals without the risk of losing all their money to online scam artists are expensive middleman platforms like Airbnb. Such platforms are aware of the lack of quality alternatives and are shifting away from subscriptions to the pay-per-transaction model, making it more expensive for end users. It is evident that the VR market has a huge problem of trust, which limits its competitive edge over the hotel industry.
The answer to this problem may be found within blockchain technology. Blockchains are the backbone of the most well-known cryptocurrencies and are known for their ability to automate trust. If we know that cryptocurrencies are protocols of value transfer, then why can’t we create higher level protocol to regulate the host-guest relationship? The adoption of this protocol would eliminate costly middlemen and allow both parties to make direct transactions.
Short-term rental protocol can be implemented with the help of smart contracts – open source computer programs that are executed in a distributed way. Once a smart contract deploys to the network, its source code is inalterable because of immutability of the blockchain. Thus, both parties can execute this open source program and be 100% sure that it matches the original listing and is verified on the network. Essentially ultimate trust!
StayBit claims that they have found such a solution. The smart contracts developed by StayBit have implemented cancellation policies employed by other well-known platforms, such as Airbnb and VRBO. When a guest makes a reservation through the StayBit system, their funds will remain in escrow until it’s closed by either party. The smart contract’s code manages escrow for both parties and will make decisions depending on the contract’s agreement, current date, and cancellation terms initially agreed upon. This system even allows guests to control the release of funds to a host on move-in day! Staybit provides a streamlined system that is hands-off in terms of modifying or altering escrow, funds, or contract terms. Essentially, it’s an automated, peer-to-peer middleman without the absurdly high expense of one. The estimated cost per transaction is only the equivalent of $2-$5.
StayBit also released a distributed application (DApp) with a familiar web-based UI to the users of their system. However, DApps cannot be viewed in a regular web browser without the installation of a MetaMask extension or any other Web3 browser such as Coinbase Wallet (Toshi), Cipher or Trust. This StayBit DApp can be launched from the Staybit.io website and is also listed in the State Of The Dapps directory.
Many property owners or managers are reluctant to take any cryptocurrency as a rent payment because of the enormous volatility of these assets. With recent introductions of stable coins like TrueUSD, Tether, MakerDAO, or Gemini Dollar, there are now viable solutions to this challenge. StayBit’s system uses TrueUSD and DAI (Maker DAO) stablecoins as the payment method for rentals.
Various surveys indicate that 30-40% of the Millennials already own cryptocurrencies yet there are few places to spend it due to the industry’s infancy. It is better to start preparing now for the future demand, and StayBit.io is ready to help!