Written by: WOO
Narrative
RWA (Real World Assets) literally translates to real-world assets. Its value lies in bridging traditional assets and the Web 3 world to achieve digital representation of real assets, effectively utilizing or dispatching real assets (such as real estate, artworks, etc.) to enhance 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. Through this combination, users can conveniently complete transactions or other utilizations of assets. When RWA is mentioned, it often brings to mind real estate, stocks, etc., but from the basic characteristics of RWA tokenization, stablecoins also belong to the RWA product track. It seems that RWA is getting closer to us. This is another layer of narrative for RWA, i.e., 'inclusivity,' allowing investors without sufficient capital to enter high-value markets to indirectly invest in high-value markets through corresponding high-value RWA tokenized products.
What does the future hold?
In the past year, the overall TVL of RWA has shown a fluctuating upward trend. In this cycle, RWA, AI, MEME, etc., are all relatively popular tracks. RWA has always been one of the more focused tracks.
Image source: https://defillama.com/protocols/RWA
In the future, RWA is likely to continue its trend, and the combination of RWA and the DeFi track may attract more and more investors' attention. In fact, high-value assets such as real estate and commodities face settlement difficulties in transactions, and the relevant laws and regulations in different countries vary significantly. It is highly likely that projects related to these high-value assets will be constrained in their development due to implementation and regulatory aspects. Therefore, if projects of this kind in the RWA track want to achieve better development, there must be significant progress in PayFi or cross-border settlement regulation and RWA asset proof before that, rather than relying on third parties in various locations for clearing or proof as most currently do. Additionally, RWA projects related to stablecoins are relatively stable, and the mainstream market is likely still dominated by the US dollar, followed by the euro and others. However, in the future, a differentiation among countries/regions may emerge, meaning that 'investors from a certain country/region primarily choose a specific stablecoin.' In this case, stablecoins that obtain local regulatory licenses can seize the market first. The last trend, which should also be quite significant in the future, is that stablecoins may be pegged to bonds, securities, stocks, or funds, leading to more products and projects in the future. The reason lies in the aforementioned settlement and regulatory aspects being more advantageous than real estate and other assets. However, for these types of projects, in the early future, only those related projects involving institutions (like BlackRock) with a certain degree of influence in traditional finance may generate considerable economic benefits. After that, projects involving institutions/organizations with significant influence in the web 3 space may emerge with more community culture characteristics in RWA.
Project
Here is an overview of the recent financing projects, intended for discussion from an objective perspective.
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. Currently, the total financing has reached $8.7 million.
Currently offering four types of products:
US Treasury Bond Vaults: Fixed term; fixed rate USDC yield, guaranteed by US Treasury bonds;
USDC Vault: Demand deposit; variable yield USDC, guaranteed by short-term US Treasury bonds, money market funds, and other cash equivalents;
EURC Vault: Demand deposit; variable yield EURC, guaranteed by euros and short-term euro bonds, money market funds, and other cash equivalents;
Fee Rate + Vault: Fixed term; guaranteed by investment-grade corporate bonds, commercial paper, emerging market bonds, etc.
Using Vault tokens as indicators in calculations and other operations.
USUAL - Government Bonds
Currently raised a total of $8.5 million, it is Binance's Launchpool project.
Overall, it revolves around three types of tokens:
USD0: This is a permissionless and fully compliant stablecoin backed 1:1 by real-world assets (RWA), aggregating various US Treasury bond tokens.
USD0++: Enhanced Treasury bonds, locking in principal 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%.
Image source: https://docs.usual.money/usual-products/usual-governance-token/usual-tokenomics/distribution-model
Token distribution is as follows:
Huma Finance
Currently has raised a total of $46.3 million, with co-founders being Chinese. Overall, it is a PayFi lending project. The latest round of financing includes $10 million in equity investment and $28 million in Huma platform entity asset investment. Distributed Global led the investment, with participation from Hashkey Capital, Folius Ventures, Stellar Development Foundation, etc. Merging with Arf on April 17, 2024, focusing on the tokenization of real-world assets related to PayFi.
Using Huma Points to track contributors to the protocol. Currently providing 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 instant settlement, simplifying cross-border payments); Rain accounts receivable pool (helping DAOs and other entities manage expenses through payroll cards); Jia Pioneer Fund Pool (providing decentralized financing for small businesses, rewarding borrowers who repay with ownership).
