What is RWA?
There’s a new food for thought in the blockchain market. It’s called real-world tokens (RWA). RWA refers to the recording of ownership of physical assets such as gold, real estate, and artwork on the blockchain. RWAs are similar in concept to security tokens (STOs), which are linked to real-world assets using blockchain technology. However, compared to STOs, RWAs are more decentralized in that they are not securities, but rather are backed by decentralized finance (DeFi). RWAs are characterized by the ability to transfer assets with minimal gas fees and a transparent process that increases trader trust and accountability.
Will RWA expand the blockchain market?
RWA’s tokenization is the recording of ownership of tangible assets such as stocks and bonds on the blockchain. It’s a system that eliminates traditional intermediaries. It offers the convenience of being able to buy and sell assets around the clock. As such, RWA is expected to overcome the limitation of distance from reality that the current blockchain market faces.
According to global business advisory firm Boston Consulting Group, the RWA market reached $310 billion last year and is expected to surge to $16 trillion by 2030.
– Advances in blockchain and smart contract technology are also playing an important role in supporting the RWA market. As the maturity and stability of the technology improves, the RWA market is expected to gain more traction.
– Participation from financial institutions and enterprises will also increase. Traditional financial institutions and enterprises are more interested in participating in the RWA market and tokenizing real-world assets. Their participation is likely to fuel the growth of the market.
Projects for RWA
- MakerDAO: MakerDAO is one of the leading projects in the DeFi (decentralized finance) ecosystem, which is used to tokenize RWA and issue a stablecoin, DAI. The project is based on smart contracts for deposits and loans, and is developing RWA by tokenizing real estate assets.
- Centrifuge: Centrifuge is developing a protocol for tokenizing assets for enterprises and SMEs. They run a platform called Tinlake, and are working with financial providers to connect real-world assets to the blockchain.
- Harbor: Harbor is a company that provides services to tokenize real estate and other real-world assets, with a focus on RWA tokenization. Harbor is used to tokenize assets while adhering to various regulatory and compliance requirements.
- Securitize: Securitize provides a platform that helps companies to tokenize their assets and issue digital securities. They are used to tokenize various real-world assets and make them tradable digital assets.
- Polymath: Polymath is developing a platform used to issue tokenized assets in a regulated and compliant manner.
- Klayton: Klaytn has chosen RWA as a tool for decentralization beyond the role of a foundation. The first RWA to be launched on the Klaytn blockchain is “Gold”. Creder, which recently announced the issuance of Gold Pegged Coin (GPC), has joined as a GC. Creder is a joint venture established by ITCEN Group, which has Korea Gold Exchange and Korea Gold Exchange Digital Asset as affiliates, and blockchain technology company BPMG. “We have shared concerns about the tokenization of assets in the past,” said Mr. Seo, “and it is only this year that we have begun discussing full-scale cooperation.”
K33 Research “LINK is the best option for RWA”
“The safest choice for RWA meta is LINK,” K33 Research analyzed in its latest report.
K33 analyst David Zimmerman said:
“If you want to be exposed to the RWA narrative and not get ripped off, LINK is the safest choice.”
Zimmerman analyzed that Chainlink has established a good environment for RWA implementation due to the fact that it has Oracle systems and various partnerships. It has also become the core infrastructure that connects the blockchain to the outside world.
In particular, they predicted that an RWA-themed cryptocurrency bubble may occur before RWA has a direct impact on the real world. This suggests that the RWA narrative is complete and that RWA is highly valued.
What are the challenges of RWA?
According to Binance Research, there are challenges that need to be addressed before RWA can be tokenized. The tokenization of RWA requires discussions between the platform and relevant parties, which must then be structured and finalized. Tokens are minted on-chain and distributed to investors, and a secondary market may be opened after the token is traded.
Regulations in each country can also play a big role. The RWA market is subject to regulation by various countries and regulatory authorities. More efforts are needed to comply with the regulatory requirements of each country and cooperate with regulators. These regulatory efforts are expected to impact the growth and stability of the market.
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