Narrative
RWA (Real World Assets) directly translates to real-world assets. Its value lies in bridging traditional assets with the Web3 world to achieve the digital representation of real assets, enabling effective utilization or deployment of real assets (such as real estate, artworks, etc.), thereby enhancing asset liquidity. With the combination of RWA and blockchain technology, RWA can transcend geographical limitations; regardless of geographical location, currency systems, or other influencing factors, users can conveniently complete transactions or utilize assets through this combination. When RWA is mentioned, real estate, stocks, etc., often come to mind. From the basic characteristics of RWA tokenization, stablecoins also belong to the RWA product category. It seems that RWA is closer to us now. This is another layer of narrative for RWA, that of 'inclusiveness,' allowing investors without sufficient capital to enter high-value markets to indirectly invest in high-value RWA tokenized products.
What does the future hold?
Over the past year, the overall TVL of RWA has shown a fluctuating upward trend. In this cycle, RWA, AI, MEME, etc., are all relatively hot sectors. RWA has always been one of the more closely watched sectors.
Image source: https://defillama.com/protocols/RWA
Looking ahead, RWA is likely to continue its trend, and the combination of RWA and DeFi sectors may attract more and more investors. In fact, high-value assets such as real estate and commodities face settlement difficulties in transactions, and the relevant laws and regulations differ among countries, significantly limiting the development of projects related to these high-value assets due to implementation and regulatory constraints. Therefore, if projects in the RWA sector want to achieve better development, they must make significant progress in PayFi or cross-border settlement regulation and RWA asset certification before that, rather than relying on third parties for clearing or certification as is often the case now. Additionally, projects related to stablecoins in the RWA sector are relatively stable, and the mainstream market is likely still dollar-dominated, with the Euro and others following. However, there may be regional differentiation in the future, where 'investors in a particular country/region basically choose a certain type of stablecoin.' In such cases, stablecoins that obtain local regulatory licenses can seize the market first. The last trend likely to emerge is that stablecoins may anchor to bonds, securities, stocks, or funds, leading to more products and projects in the future. The reason for this is that, as mentioned earlier, the advantages in settlement and regulation are better than for assets like real estate. However, for such projects, in the early future, only those involving institutions with significant influence in traditional finance (like BlackRock) may generate considerable economic benefits. After that, projects involving institutions/organizations with significant influence in the Web3 space may emerge with RWA projects characterized by community culture.
Projects
Here is an overview of recent financing projects, presented from an objective perspective for discussion.
OpenTrade
OpenTrade was established at the end of 2022 and is headquartered in London, UK. Its investors include a16z CSX, Circle, Draper Dragon, CMCC Global, Ryze Labs, Polygon, and Kronos Ventures. The total amount raised so far is $8.7 million.
Currently, four products are offered:
1. U.S. Treasury Bills Vaults: Fixed term; fixed yield USDC, backed by U.S. Treasury bills;
2. USDC Vault: On-demand; variable yield USDC, backed by short-term U.S. Treasury bills, money market funds, and other cash equivalents;
3. EURC Vault: On-demand; variable yield EURC, backed by Euros and short-term Euro bonds, money market funds, and other cash equivalents;
4. Rate + Vault: Fixed term; backed by investment-grade corporate bonds, commercial papers, emerging market bonds, etc.
Using Vault tokens as indicators in accounting and other operations.
USUAL - Government Bonds
To date, it has raised a total of $8.5 million and is part of Binance's Launchpool project.
Overall, it revolves around three types of tokens:
USD0: This is a permissionless and fully compliant stablecoin supported 1:1 by real-world assets (RWA), aggregating various U.S. Treasury bill tokens.
USD0 ++: An enhanced Treasury bill, where the principal is locked as collateral through USD0, using USUAL as an incentive.
USUAL is its governance token.
Token economics: Total supply of 4 billion tokens, with an initial circulation ratio of 12.37%.
Source: https://docs.usual.money/usual-products/usual-governance-token/usual-tokenomics/distribution-model
Token distribution is as follows:
Huma Finance
Currently, a total of $46.3 million has been raised, with the co-founders being of Chinese descent. Overall, it is a PayFi lending project. The recent round of financing includes $10 million in equity investment and $28 million in Huma platform entity asset investment. Distributed Global led the round, with participation from Hashkey Capital, Folius Ventures, Stellar Development Foundation, and others. On April 17, 2024, it merged with Arf, focusing on tokenization of real-world assets related to PayFi.
Utilizing Huma Points to track contributors to the protocol. Currently offering cross-border payment financing and credit cards supported by digital assets. This is accomplished through various funding pools, such as Arf - cross-border payment financing pool (based on USDC for instant settlement, simplifying cross-border payments); Rain accounts receivable pool (helping entities like DAOs manage expenditures through payroll cards); Jia Pioneer Fund Pool (providing decentralized financing for small businesses, rewarding borrowers who repay with ownership. That is, 'small business credit') and other funding pools to facilitate cross-border payment financing.
