Which coins on the RWA track have potential? Is it hype or opportunity?

Recently, the popularity of RWA has gradually increased, and it has even been called the engine of the next bull market, which can create a market worth tens of trillions. But RWA is not a new concept. There was a wave of FOMO as early as 2020 and 2021, but the follow-up has been tepid. So, why will RWA attract people’s attention again this year? What are the popular events on the RWA circuit? What challenges does the future development of the RWA track face?
Institutional entry, a top-down pushThis year RWA was brought to the stage jointly by institutions such as Goldman Sachs, Citigroup, Binance, MakerDAO and the leading protocols on the chain. RWA will be the trump card to drive the blockchain industry into a scale of tens of trillions of dollars, because almost any asset that can be expressed in value can be tokenized, and it is optimistically expected that the scale of RWA will reach 40,000 by 2030. One hundred million U.S. dollars.
Traditional financial institutions hold a large number of real assets, such as stocks, bonds, real estate, etc. If these assets can be tokenized, the income and competitiveness of the institutions can be increased, and it can also provide them with more investment opportunities.
Deep in bear fear, the crypto industry desperately needs a new narrativePeople engaged in the crypto industry are quite united to a certain extent. Faced with the current dark bear situation in the crypto industry, everyone is working together to find a new narrative for getting out of the bear market. Bitcoin Ordinals, which has been very vocal in the first half of this year This effort to get out of the quagmire can be seen in the narratives of ecology, Bitcoin ETF and ZKP. RWA’s narrative of breaking through the barriers between TraFi (traditional finance) and DeFi (encrypted finance) is no worse than the previous narratives, bringing a lot of room for imagination to the encryption industry.
RWA track hot project inventoryAs of July 17, the total market value of RWA track tokens exceeded US$2.4 billion, which is almost 1/20 of the market value of more than 44 billion DeFi tokens. From this perspective, the imagination space of RWA track is still very huge.
Because the definition of RWA is extremely broad, the RWA track involves Layer 1, stable currency, lending, real estate, public bonds, carbon credit trading and other directions, involving more than 60 projects. The following will take stock of the top six hot projects in RWA track market value.
MakerDAO（MKR）MakerDAO is a decentralized mortgage lending platform established on Ethereum in 2014. It achieves over-collateralized lending by locking crypto assets such as ETH in smart contracts and minting the stablecoin DAI pegged to the US dollar. MakerDAO was one of the first projects to announce its entry into the RWA track. In 2020, it voted to approve mortgage lending based on RWA tokenization and expand the stablecoin DAI. Currently, MakerDAO is also expanding the layout of the RWA track, mainly in the direction of public bonds.
As of now, 48% of MakerDAO's total assets are RWA, and more than 50% of its income comes from RWA. MakerDAO is moving from a traditional DeFi protocol to a new direction focused on RWA.
Synthetix（SNX）Synthetix is ​​currently the leading project in the field of synthetic assets on the RWA track, aiming to provide on-chain exposure to real-world currencies, commodities, stocks and indices. Users can mint synthetic assets (Synths) by staking SNX, and Synths track the prices of various real-world assets.
Synthetix has gone through three rounds of financing, with investors including Coinbase, DWF Labs and other well-known institutions. Synthetix, as a representative project of synthetic assets, failed to lead RWA out of the siege in 2021. TVL dropped from US$2.9 billion in February 2021 to the current US$380 million. In March this year, Synthetix received a new $20 million in financing from DWF Labs, and announced that DWF Labs will provide liquidity and market makers for SNX, hoping that things will turn around.
Centrifuge（CFG）Centrifuge is an on-chain credit protocol designed to provide small and medium-sized business owners with a way to mortgage their assets on-chain and gain liquidity. Borrowers can finance their real-world assets without banks or other intermediaries, providing DeFi investors with a stable source of income that is agnostic to the cryptocurrency market.
The total assets of Centrifuge protocol financing are US$421 million. It is worth noting that Centrifuge is also the technology provider behind leading mortgage lending protocols such as MakerDAO and Aave.
Centrifuge has gone through three rounds of financing, with investors including Coinbase, IOSG, etc.
Reserve Rights（RSR）Founded in 2018, Reserve Protocol is a decentralized stablecoin protocol that allows users to mint USD-pegged stablecoins, known as RTokens, backed by any crypto asset. Currently, the protocol has launched three RTokens, eUSD (electronic U.S. dollar), ETHPLUS (diversified ETH pledge index), and hyUSD (high-yield savings dollar). Because its stablecoin is pegged to the U.S. dollar, it belongs to the stablecoin direction of the RWA track.
Reserve Rights did not disclose specific financing details, but its investor lineup is very luxurious, including Coinbase, OpenAI founder Sam Altman, PayPal co-founder Peter Thiel, etc. The project team is quite resourceful.
Polymesh（POLYX）
Market value is approximately US$97.6 million
Due to the limitations of supervision, complex off-chain asset management and other factors, it is difficult for native encryption to meet the transaction needs of RWA without public chains such as Ethereum. Therefore, vertical public chains specially designed to serve the RWA track came into being. Polymesh, founded in 2020, is an institutional-level permissioned blockchain specially built for RWA. It is also the project with the highest popularity and market value in the Layer 1 direction of the RWA track.
Will RWA once again stage the story of the boy who cried wolf?Because RWA is not a new concept, this round of RWA narratives is inevitably suspected of being a piece of cake. The current combined transaction volume of all categories of RWA is far less than the peak transaction volume in the previous round of 2021. Around October 2021, the combined weekly trading volume of all categories of RWA exceeded US$250 million, and then it has been shrinking. Until now, even if the popularity rises again, the weekly trading volume is less than US$50 million. It makes people ask, is this round of RWA going to be a crying wolf story again?
RWA is targeting a trillion-level incremental market. Although this pie is huge, the market may not be able to absorb it. In addition to the transaction data perspective, RWA track technology also faces many challenges.
Inescapable supervision
Technical infrastructure needs to be improved
Realistic asset valuation and authenticity issues
Uneven development of RWA track projects
potential default risk
excessive centralization
End of articleThe cryptocurrency industry has always been criticized for not bringing help and value to the real world. DeFi only forms a closed loop for funds on the chain, and NFT does not help brands in the real world form more value growth. RWA is strongly promoted by institutions because they see its help in the liquidity of real assets. The current bond market size is about 127 trillion U.S. dollars, and the total value of global real estate is about 362 trillion U.S. dollars. If these assets can be formed on the chain The value created by interaction will be huge.
Perhaps in the current environment, the next bull market will place more emphasis on compliance and practicality in the real world. However, it is worth noting that judging from past experience, every outbreak in the encryption industry is mostly caused by bottom-up. However, the participants and audiences of RWA are still mainly institutions and enterprises, and ordinary investors are still There is no proper entry point. RWA still needs more exploration and attempts.
Later, we will bring you analysis of leading projects on other tracks. If you are interested, please click follow. I will also compile some cutting-edge information inquiries and project reviews from time to time, and welcome like-minded people in the currency circle to explore together. If you have any questions, please comment or send a private message