Real World Assets: The Next Big Crypto Narrative

As the web 3 ecosystem evolves, and more institutions become involved with the myriad of blockchain networks, one narrative that stands out is Real World Assets.

Real World Assets (RWA) is the concept of tokenizing anything tangible, or intangible, and placing it within the blockchain. This narrative encompasses anything from stocks and bonds, to car titles and deeds to property. Anything can be considered a Real World Asset depending on what the token itself would be representing, if we were to put it simply.

Real estate, for example, will be transformed and bring a new way to sell homes and apartment complexes.

Corporations such as Nike and Amazon could potentially sell NFTs that can be traded 1 to 1 for custom products that have yet to reach the market (if it hasn't been done already).

Presale NFTs for games, vehicles and industrial equipment can act in a similar manner. All representative on the blockchain!

Here are a few aspects of what RWAs would provide for the benefit of blockchain enthusiasts.

Liquidity: Tokenization can increase the liquidity of assets that are traditionally illiquid, by allowing fractional ownership and easier transferability.

Accessibility: By fractionalizing ownership, a wider range of investors can access expensive assets like real estate or fine art.

Transparency and Security: Blockchain technology offers a transparent, immutable ledger of transactions, which can enhance the security and trust in the transactions of tokenized assets.

The security of the blockchain would give users the safety net they would need when it comes to tokenizing their possessions and assets on a given blockchain network. And there are already a few different networks that have RWA focused incentives.

These established networks include, but are not limited to:

1. MakerDAO:

   • Focus: One of the first DeFi projects to explore RWA, MakerDAO has expanded its collateral base to include RWAs like real estate and trade finance assets.

   • Mechanism: Uses RWAs as part of its multi-collateral Dai (a stablecoin) system to maintain price stability and reduce reliance solely on crypto assets.

2. Centrifuge:

   • Focus: Centrifuge allows for the tokenization of real-world assets and uses them as collateral to access financing.

   • Mechanism: Connects borrowers and investors directly on its platform, enabling the financing of real-world assets through DeFi.

3. Tinlake:

   • Part of Centrifuge: Tinlake is an application built on the Centrifuge chain that enables users to finance their assets through asset-backed pools.

4. RealT:

   • Focus: Specializes in tokenizing real estate, particularly rental properties.

   • Mechanism: Investors can purchase tokens representing fractions of properties and earn rental income proportionally.

Some honorable mentions that have also garnered the attention of institutional investors would include:

Figure Technologies

• Sector: Financial Services, Real Estate

• Focus: Figure uses blockchain to provide home equity lines of credit, mortgage, and other financial services. Their Provenance blockchain platform is designed to make financial transactions faster and more efficient.

• Interest: The combination of blockchain technology with traditional financial services has made Figure an attractive prospect for banks and other financial institutions looking to innovate their processes.

Archax

• Sector: Digital Securities Exchange

• Focus: Archax is a London-based digital securities exchange that catifies to institutional investors. It is designed to trade tokenized securities and other assets.

• Interest: Its positioning as a bridge between the crypto world and traditional financial markets, along with its regulatory compliance, has garnered significant institutional attention.

This is not a complete list, as there are plenty of other platforms out there such as LCX, Swarm and MERJ that support RWAs, but aren't heavily focused on this narrative (since they offer more services).

If Black Rock claims that the future of the world's markets will be tokenized, it's best to adhere to such words.

Alas, the main takeaway from this post is to show that as RWA continues to gain traction, it will serve as yet another catalyst for the coming bull run. Being able to trade anything product related in the form of tokens on the blockchain can serve as not just a means of trading, but also as a new means of performing sales and business in the times to come. The implications of such use case are broad and encompassing many sectors, and will be taken into account as time progresses.