#RWA: Narratives driving mass adoption. The chosen trend for the next bull.
Currently, the TVL of RWA stands at $5.8b, accounting for 6.8% of the total DeFi TVL, which is currently at $35.6b (according to DefiLlama).
A Very Educative thread.
What is Real World Asset(RWA)?
RWAs refer to tangible and intangible assets in the physical world (e.g., real estate, bonds, commodities, etc.).
The tokenization of RWAs brings these off-chain assets onto the blockchain, thereby opening new possibilities and potential use cases.
Tokenized RWAs can be stored and tracked on-chain, thereby increasing efficiency and transparency while reducing the potential for human error.
The tokenization process includes:
⇥ Minting & Distribution
⇥ Secondary Trading
The number of RWA token holders on Ethereum has reached 44.7k and continues to increase over time.
◆ Blockchains: intainft, provenancefdn, realio_network, PolymeshNetwork, MANTRA_Chain, etc.
◆ Securitization / Tokenization: centrifuge, Securitize, INX_Group, curio_invest, and more.
◆ Regulatory: QuadrataNetwork, TokenySolutions, #Verite, SpruceID and others.
◆ Climate: regen_network, KlimaDAO, weareflowcarbon, ToucanProtocol, FriggEco, etc.
◆ Real Estate: mattereum, RealTPlatform, Robinlandio, EktaChain, Parcl, PropyInc, blocksquare_io, and more.
◆ Private Fixed Income: maplefinance, TrueFiDAO, ClearpoolFin, _Fortunafi and others.
◆ Public Fixed Income / Public Equities: #Swarm, OndoFinance, BackedFi, Vested_finance, #Bondblox and others.
◆ Emerging Market: goldfinch_fi, Credix_finance, bru_finance, etc.
◆ Trade Finance: defactor_, Polytrade_fin, consol_freight, etc.
Some recent updates
Tokenized RWA Platform #Untangled Goes Live, Gets $13.5m Funding to Bring Private Credit On-Chain.
Avalanche Invests $50M in RWA
binance Listed UniLend_Finance to onboard Trillions worth of Tokenised RWAs to DeFi.
Bullish? Yes. Absolutely! Why?
The RWA and DeFi markets have great potential for industry development.Investment opportunities lie in platforms enabling RWA tokenization and supporting its circulation.
Another niche is providing Web3 access to RWA for portfolio diversification.
Thorough evaluations and liquidity are crucial.Delays in asset transfer present risks, but solutions create growth opportunities.Incorporating RWA into Blockchain is an inevitable necessity.
It not only brings numerous benefits to the financial market but also fosters the development of the traditional market.
Benefits of Real-World Assets on Blockchain
The use of RWAs on blockchain has several advantages. It enables increased liquidity for real-world assets by making them more easily tradable. In turn, this can reduce the cost of capital for companies retail investors to gain asset
Challenges of Real-World Assets on Blockchain. And yet it struggles with:
• High transaction costs.
• Inaccessibility for many.
• Lack of liquidity.
Many notable firms have expressed their support for tokenizing this industry to solve these problems.
Despite the excitement around the use of RWAs in DeFi, there are several challenges that need to be addressed. Firstly, integrating these assets onto blockchain networks requires the development of specialized infrastructure, including data oracles and legal frameworks.
Real-world assets represent a significant opportunity for blockchain-based technologies to unlock new use cases and enable more efficient trading and investment.
While there are still some challenges standing in the way of the broader adoption of RWAs in DeFi, it is clear that this is an area of research and development that will continue to play a pivotal role in the future of finance.