SkyTrade: Pioneering the World's First Air Rights Marketplace on Solana

In a groundbreaking development for both the real estate and blockchain industries, SkyTrade is making waves with its innovative approach to monetizing airspace. Led by CEO and co-founder Jonathan Dockrell, SkyTrade is building the world's first marketplace for air rights, leveraging the power of Solana's blockchain technology. This revolutionary platform aims to unlock a previously opaque and illiquid asset class estimated to be worth a staggering $30 trillion.

What Are Air Rights?

Air rights refer to the legal property interest in the space above a piece of land or property. In many jurisdictions, particularly those following common law traditions like the United States, United Kingdom, Canada, and Australia, property owners possess rights to the airspace above their land up to a certain height. For instance, in the US, this extends up to 500 feet above the highest point of the property.

The Untapped Potential of Air Rights

The concept of air rights as a valuable asset class is not entirely new, especially in densely populated urban areas. However, what sets SkyTrade apart is its vision to create a liquid, transparent marketplace for these rights using blockchain technology. This approach has the potential to revolutionize both the real estate industry and emerging sectors like drone delivery.

Jonathan Dockrell explains the genesis of SkyTrade:

"I started digging a little bit. And people kept telling me, oh, you know, it's regulation. Regulation is the problem. And then digging a little bit further, I realized, yeah, regulation is a factor, sure. But there's this element of legality involving low-altitude airspace that really appears to be one of the big blockers."

The Drone Delivery Conundrum

One of the primary use cases for a robust air rights marketplace is facilitating the growth of the drone delivery industry. Despite technological advancements, widespread adoption of drone delivery services has been slower than many anticipated. SkyTrade identifies two major factors hindering this progress:

1. Regulatory approval for commercial drone operations
2. Legal access to necessary airspace

While regulatory bodies like the FAA in the United States are becoming more receptive to commercial drone operations, the issue of airspace access remains a significant hurdle. SkyTrade's platform aims to address this by creating a mechanism for drone operators to obtain legal permission to fly through privately owned airspace.

Real Estate Applications of Air Rights

While drone delivery is an exciting prospect, SkyTrade's vision extends far beyond this single use case. The platform is also targeting traditional real estate applications of air rights, which have been actively traded in some markets for years.

Dockrell highlights some key use cases:

1. Purchasing air rights above existing buildings for development
2. Transferring air rights between properties in certain jurisdictions
3. Monetizing air rights over properties that cannot be developed further

A prime example of the value of air rights in real estate comes from New York City:

"St. Patrick's in Manhattan, they had air rights above it. They were never going to develop. Their church looks too good, but they need the money, right? So, you know, congregations are dwindling. They need the money, repair the roof. So they sold the air rights. So they sold the air rights for about 164 million."

The SkyTrade Solution

SkyTrade's platform aims to streamline the process of buying, selling, and renting air rights using blockchain technology. Here's how it works:

1. Property owners can register their air rights on the platform
2. SkyTrade verifies ownership through database checks
3. Air rights are tokenized using compressed NFTs on the Solana blockchain
4. An auction house allows for trading of these tokenized air rights

The use of Solana's blockchain provides several advantages:

• Immutability of records
• Lower transaction costs
• Increased transparency
• Improved liquidity for air rights as an asset class

Why Solana?

SkyTrade's choice of Solana as its blockchain platform is significant. Solana's high-speed, low-cost transactions make it ideal for handling the potentially large volume of air rights transactions. Additionally, Solana's growing ecosystem and developer support have been crucial for SkyTrade's development.

Dockrell explains:

"Solana have been incredibly helpful with us. So they've been really helpful early days getting us on the Solana network. So we've been really happy there."

The SkyTrade Radar App: A DePIN Approach

In addition to its marketplace, SkyTrade is developing a mobile application called SkyTrade Radar. This app takes a decentralized physical infrastructure network (DePIN) approach to track drone activity. Users are incentivized to gather data on drone movements, which is then cross-referenced with air rights data.

This innovative approach serves multiple purposes:

1. It provides real-time data on drone activity
2. It helps ensure compliance with air rights agreements
3. It creates a network effect, encouraging more users to participate in the SkyTrade ecosystem

Market Size and Potential

The potential market size for air rights is staggering. SkyTrade estimates the global market could be worth up to $30 trillion. While this figure might seem ambitious, it's based on careful analysis of existing air rights transactions and potential future use cases.

In New York City alone, air rights in certain areas are trading for up to $400 per square foot, equivalent to 15-18% of the value of the land or building below. Even in less prime locations, air rights can still command significant value, ranging from $10 to $50 per square foot.

Challenges and Opportunities

Creating a new market for a previously illiquid asset class is not without its challenges. SkyTrade faces several hurdles:

1. Educating property owners about the value of their air rights
2. Navigating complex regulatory landscapes across different jurisdictions
3. Creating a liquid marketplace with sufficient buyers and sellers
4. Balancing the interests of property owners, developers, and drone operators

However, these challenges also present significant opportunities. By solving these problems, SkyTrade has the potential to unlock billions of dollars in untapped value and facilitate the growth of new industries like drone delivery.

The Future of Urban Development

SkyTrade's platform could have far-reaching implications for urban development. By creating a more efficient market for air rights, it could:

1. Encourage more efficient use of urban airspace
2. Provide new revenue streams for property owners
3. Facilitate the development of innovative transportation solutions like drone delivery and air taxis
4. Help balance urban density with preservation of historic buildings

Investor Interest and Funding

SkyTrade's innovative approach has not gone unnoticed by investors. The company recently completed a pre-seed funding round led by Modular Capital and Portal Ventures. This early validation from respected investors in the blockchain space underscores the potential of SkyTrade's vision.

The Road Ahead for SkyTrade

As SkyTrade moves forward, several key milestones are on the horizon:

1. Launch of the SkyTrade auction house for air rights trading
2. Continued development of the SkyTrade Radar app
3. Expansion of partnerships with real estate companies and drone operators
4. Potential development of a native token to further incentivize participation in the ecosystem

Implications for the Drone Delivery Industry

The development of a liquid air rights marketplace could be a game-changer for the drone delivery industry. By providing a clear mechanism for obtaining permission to fly through private airspace, SkyTrade could help remove one of the major obstacles to widespread adoption of drone delivery services.

Dockrell notes:

"If you think about it, that every airspace or every piece of low-altitude airspace is owned by someone or some entity. So it seemed to me kind of... as you mentioned, my background in marketplace, it seemed to me like this was kind of built for a marketplace."

The Role of Regulation

While SkyTrade's platform can help address the issue of airspace access, regulatory approval remains a crucial factor in the growth of the drone industry. However, there are positive signs on this front. Dockrell mentions:

"There was a change of the administrator in the FAA last year, I think was last year. And he previously was CEO of Supernal, which is a Hyundai's flying car company. So he's pretty, you know, future facing."

This change in leadership at the FAA has led to an increase in licenses for Beyond Visual Line of Sight (BVLOS) drone operations, a crucial step towards scalable drone delivery services.

Public Acceptance and Incentives

One of the key challenges for widespread adoption of drone delivery and other low-altitude airspace uses is public acceptance. SkyTrade's approach of providing financial incentives to property owners could play a crucial role in gaining this acceptance.

Dockrell explains:

"Our view the best way they're going to be happy with it is if you give them a little bit of something back, right? Or at least you give them control over their airspace so that they can say, yes, I want to know fly zone, or yes, happy to have the drones in Monday to Friday. No problem as long as I get some sort of fee for it."

The Intersection of Real Estate and Technology

SkyTrade's platform represents a fascinating intersection of traditional real estate practices and cutting-edge blockchain technology. By tokenizing air rights, SkyTrade is not only creating a new asset class but also demonstrating the potential for blockchain to revolutionize long-established industries.

Potential Impact on Property Values

The creation of a liquid market for air rights could have significant implications for property values, especially in urban areas. Properties with valuable air rights could see their overall value increase, while the ability to monetize airspace could provide new revenue streams for property owners.

The Role of Smart Contracts

While not explicitly discussed in the interview, the use of smart contracts on the Solana blockchain is likely to play a crucial role in SkyTrade's platform. Smart contracts could automate many aspects of air rights transactions, including:

1. Verification of ownership
2. Transfer of rights
3. Distribution of rental fees for airspace use
4. Enforcement of usage restrictions or conditions

Scalability and Global Expansion

While SkyTrade is initially focusing on markets like the United States and United Kingdom where air rights are well-established legal concepts, the potential for global expansion is significant. As more countries recognize the value of airspace and establish clear legal frameworks, SkyTrade's platform could be adapted to serve these new markets.

The Future of Flying Cars and Air Taxis

Although SkyTrade's immediate focus is on drone delivery and traditional real estate applications, the platform could play a crucial role in the future development of flying cars and air taxis. By establishing a framework for managing low-altitude airspace, SkyTrade is laying the groundwork for these future transportation technologies.

Dockrell shares his thoughts on the future of flying cars:

"I think if you do them town to town, maybe you connect them into the transportation systems. I think that would be good, but just into airports, I think it's gonna be a long way off."

Environmental Considerations

The efficient use of airspace facilitated by SkyTrade's platform could have positive environmental implications. By optimizing drone delivery routes and potentially reducing ground-based traffic, there could be a net reduction in carbon emissions. However, these potential benefits would need to be carefully studied and balanced against any negative impacts of increased aerial activity.

Data Privacy and Security

As with any platform dealing with property data and real-time location information, data privacy and security will be crucial considerations for SkyTrade. The use of blockchain technology provides some inherent security benefits, but the company will need to ensure robust protections for user data, especially as it relates to drone tracking and property ownership information.

Educational Challenges and Opportunities

One of the significant challenges faced by SkyTrade is educating property owners about the value of their air rights. This challenge also presents an opportunity for the company to position itself as a thought leader in this emerging field. Dockrell's "Where's My Flying Car?" substack newsletter, which has garnered over 16,000 subscribers, is an excellent example of this educational approach.

The Network Effect and Platform Growth

As with many marketplace platforms, SkyTrade's success will largely depend on achieving a network effect. The more property owners list their air rights, the more attractive the platform becomes for potential buyers and renters. Similarly, as more drone operators and real estate developers use the platform, it becomes more valuable for property owners to list their air rights.

Tokenomics and Incentive Structures

While SkyTrade doesn't currently have a native token, the potential for one in the future could provide interesting opportunities for incentivizing participation in the ecosystem. A well-designed token economy could encourage property owners to list their air rights, incentivize users to contribute data through the SkyTrade Radar app, and reward early adopters of the platform.

Regulatory Compliance and Legal Considerations

As SkyTrade expands, ensuring compliance with varying air rights regulations across different jurisdictions will be crucial. The company's focus on common law jurisdictions like the US and UK provides a solid starting point, but expansion into other legal systems will require careful navigation of local laws and regulations.

Partnerships and Ecosystem Development

To achieve its vision, SkyTrade will likely need to develop a robust ecosystem of partnerships. This could include:

1. Real estate companies and property managers
2. Drone delivery companies and operators
3. Urban planning and development firms
4. Government agencies and regulators
5. Other blockchain and technology companies

The Role of Artificial Intelligence

While not explicitly mentioned in the interview, the potential for artificial intelligence to play a role in SkyTrade's platform is significant. AI could be used to:

1. Optimize pricing for air rights based on location and demand
2. Predict future value of air rights in different areas
3. Automate compliance checks for drone flights
4. Analyze patterns in air rights usage to inform urban planning decisions

Implications for Urban Planning

The availability of a liquid market for air rights could have profound implications for urban planning. City planners and developers could use data from SkyTrade's platform to inform decisions about:

1. Zoning changes
2. Infrastructure development
3. Preservation of historic buildings
4. Planning for future transportation needs

The Potential for Decentralized Governance

As the SkyTrade ecosystem grows, there may be opportunities to implement decentralized governance mechanisms. This could allow stakeholders such as property owners, drone operators, and developers to have a say in the platform's development and policies.

Cross-Chain Interoperability

While SkyTrade is currently built on Solana, the potential for cross-chain interoperability could be explored in the future. This could allow for air rights tokens to be traded or used as collateral on other blockchain platforms, further increasing liquidity and use cases.

Conclusion: A New Frontier in Real Estate and Technology

SkyTrade's innovative approach to air rights represents a new frontier at the intersection of real estate, blockchain technology, and urban development. By creating a liquid marketplace for a previously underutilized asset class, SkyTrade has the potential to unlock billions of dollars in value and facilitate the growth of new industries like drone delivery.

As the platform continues to develop and expand, it will be fascinating to see how it shapes the future of our cities, our transportation systems, and our understanding of property rights in the three-dimensional space above our heads. With its use of Solana's blockchain technology, SkyTrade is not just creating a new market – it's pioneering a new way of thinking about the space above us and how we can use it more efficiently and equitably in the 21st century.

Facts + Figures

• SkyTrade estimates the global air rights market could be worth up to $30 trillion.
• Air rights in certain areas of New York City are trading for up to $400 per square foot, equivalent to 15-18% of the value of the land or building below.
• In less prime locations, air rights can still command significant value, ranging from $10 to $50 per square foot.
• St. Patrick's Cathedral in Manhattan sold its air rights for approximately $164 million.
• SkyTrade's "Where's My Flying Car?" substack newsletter has over 16,000 subscribers.
• The company has nearly 8,000 air rights listings from real estate entities on its marketplace.
• SkyTrade's waitlist for early traders has over 9,000 sign-ups in the last couple of weeks.
• There are currently around 30 Walmart locations in the US offering drone delivery services.
• The air rights above zones one and two in central London are estimated to be worth about £52 billion.
• SkyTrade's team currently consists of about 11 people, including the co-founders.
• The company recently completed a pre-seed funding round led by Modular Capital and Portal Ventures.
• SkyTrade uses compressed NFTs on the Solana blockchain to tokenize air rights.
• The FAA has started issuing more licenses for Beyond Visual Line of Sight (BVLOS) drone operations.
• SkyTrade's platform could potentially generate passive income of $2,500 to $3,000 per year for properties near drone delivery hubs.
• The company's SkyTrade Radar app is available on the Google Play Store for Android devices.

Questions Answered

What are air rights?

Air rights refer to the legal property interest in the space above a piece of land or property. In many jurisdictions, particularly those following common law traditions like the United States, United Kingdom, Canada, and Australia, property owners possess rights to the airspace above their land up to a certain height. For instance, in the US, this extends up to 500 feet above the highest point of the property. These rights can be sold, leased, or transferred separately from the land itself, creating a potentially valuable asset class.

How does SkyTrade's platform work?

SkyTrade's platform allows property owners to register and tokenize their air rights using compressed NFTs on the Solana blockchain. The company verifies ownership through database checks before tokenization. Once tokenized, these air rights can be traded on SkyTrade's auction house. The platform also includes a mobile app called SkyTrade Radar, which uses a decentralized physical infrastructure network (DePIN) approach to track drone activity. This data is then cross-referenced with air rights information to ensure compliance and facilitate transactions.

What is the estimated value of the global air rights market?

SkyTrade estimates that the global air rights market could be worth up to $30 trillion. This figure is based on careful analysis of existing air rights transactions and potential future use cases. In prime locations like New York City, air rights can trade for up to $400 per square foot, equivalent to 15-18% of the value of the land or building below. Even in less prime locations, air rights can still command significant value, ranging from $10 to $50 per square foot. The potential for widespread drone delivery and other innovative uses of airspace could further increase this value in the future.

How could SkyTrade's platform impact the drone delivery industry?

SkyTrade's platform could significantly impact the drone delivery industry by addressing one of its major hurdles: legal access to necessary airspace. By creating a marketplace for air rights, drone operators could easily obtain permission to fly through privately owned airspace. This could streamline operations and potentially accelerate the adoption of drone delivery services. Additionally, by providing financial incentives to property owners, SkyTrade's approach could help gain public acceptance for increased drone activity in residential areas.

What are the potential applications of air rights beyond drone delivery?

While drone delivery is a significant use case, air rights have numerous other applications in real estate and urban development. These include:

1. Purchasing air rights above existing buildings for development
2. Transferring air rights between properties in certain jurisdictions
3. Monetizing air rights over properties that cannot be developed further
4. Protecting views by purchasing air rights to prevent development
5. Facilitating the development of innovative transportation solutions like air taxis
6. Optimizing urban density while preserving historic buildings

Air rights can also be purchased as an investment, with buyers speculating on future value increases.

How does SkyTrade use blockchain technology?

SkyTrade leverages the Solana blockchain to tokenize air rights using compressed NFTs. This approach provides several advantages:

1. Immutability of records, ensuring secure and tamper-proof ownership information
2. Lower transaction costs compared to traditional real estate transactions
3. Increased transparency in air rights ownership and transfers
4. Improved liquidity for air rights as an asset class
5. Potential for smart contracts to automate various aspects of air rights transactions

The use of blockchain technology also allows for the creation of a decentralized marketplace, reducing reliance on intermediaries and potentially lowering costs for buyers and sellers.

What challenges does SkyTrade face in creating this new market?

SkyTrade faces several significant challenges in creating a market for air rights:

1. Educating property owners about the value of their air rights and the potential for monetization
2. Navigating complex and varying regulatory landscapes across different jurisdictions
3. Creating a liquid marketplace with sufficient buyers and sellers to ensure efficient price discovery
4. Balancing the interests of property owners, developers, and drone operators
5. Ensuring data privacy and security, especially concerning property ownership and drone tracking information
6. Achieving a network effect to make the platform valuable for all stakeholders
7. Adapting to potential changes in air rights laws and regulations
8. Addressing potential environmental and noise concerns related to increased aerial activity

Overcoming these challenges will be crucial for SkyTrade's long-term success and the widespread adoption of its platform.