Narrative
RWA (Real World Assets) directly translates to real-world assets. Its value lies in bridging traditional assets with the web3 world, enabling the digital representation of real assets, effectively utilizing or deploying real assets (such as real estate, art, etc.), and enhancing the liquidity of these assets. With the combination of RWA and blockchain technology, RWA can overcome geographical restrictions; regardless of geographical location, currency system, or other influencing factors, users can conveniently complete transactions or utilize assets through this combination. When RWA is mentioned, it often brings to mind real estate, stocks, etc. From the basic characteristics of RWA tokenization, stablecoins also fall under RWA track products. It seems that RWA is closer to us. This is another layer of narrative for RWA, namely 'inclusive finance', allowing investors who do not have enough capital to enter high-value markets to indirectly invest in high-value RWA tokenized products.
How will the future be?
Over the past year, the overall TVL of RWA has shown a trending increase. In this cycle, RWA, AI, MEME, and others are 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 this trend, and the combination of RWA and DeFi tracks may attract more and more investors' attention. In fact, high-value assets like real estate and commodities face settlement difficulties in transactions, and different countries have varying laws and regulations, which likely hinders the development of projects related to such high-value assets due to implementation and regulatory constraints. Therefore, for projects in the RWA track to achieve better development, there must be significant progress in PayFi or cross-border settlement regulation and RWA asset verification before that, rather than relying on local third parties for clearing or verification. Additionally, the RWA projects related to stablecoins are relatively stable; the mainstream market is likely still dominated by the US dollar, with the euro following. However, in the future, these projects may exhibit national/regional differentiation, meaning 'investors from a specific country/region essentially all choose a certain type of stablecoin.' In such cases, stablecoins that obtain local regulatory licenses can capture the market first. The last trend is that the anchor value of stablecoins may increasingly be linked to bonds, securities, stocks, or funds, with more products and projects emerging in the future. The reason for this is that, as mentioned earlier, the settlement and regulatory aspects have better advantages compared to assets like real estate. However, in the near future, only projects involving institutions with significant influence in traditional finance (like BlackRock) may yield considerable economic benefits. After that, projects that involve influential organizations in the web3 space may emerge with more community cultural characteristics.
Project
Here is an overview of recently funded 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. Currently, the total financing amount has reached $8.7 million.
Currently offers four products:
1. U.S. Treasury Bond Vaults: Fixed term; fixed rate USDC yield, backed by U.S. Treasury bonds;
2. USDC Vault: Current; variable yield USDC, backed by short-term U.S. Treasury bonds, money market funds, and other cash equivalents;
3. EURC Vault: Current; variable yield EURC, backed by euros, 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.
Utilize Vault tokens as metrics in accounting and other operations.
USUAL - Government Bonds
Currently raised a total of $8.5 million, it's a Binance 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 U.S. Treasury bond tokens.
USD0 ++: An enhanced Treasury bond, locking the principal as collateral through USD0, using USUAL as an incentive.
USUAL is its governance token.
Token economics: Total 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 has raised a total of $46.3 million, co-founded by a Chinese individual. Overall, it is a PayFi lending project. The latest round of financing includes $10 million in equity investment and $28 million in Huma platform physical asset investment. Distributed Global led the investment, with participation from Hashkey Capital, Folius Ventures, Stellar Development Foundation, and others. On April 17, 2024, it merged with Arf, focusing on tokenizing real-world assets related to PayFi.
Using Huma Points to track contributors to the protocol. Currently providing cross-border payment financing and digital asset-backed credit cards. 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 Receivables Pool (helping entities like DAOs manage expenses through payroll cards); Jia Pioneer Fund Pool (providing decentralized financing for small businesses, rewarding borrowers who repay with ownership—i.e., 'small business credit') and other funding pools to facilitate cross-border payment financing.
