Narrative
RWA (Real World Assets) refers to assets from the real world. Its value lies in bridging traditional assets and the web3 world to realize the digital representation of real assets, effectively utilizing or deploying real assets (such as real estate, artworks, etc.) and enhancing asset liquidity. With the combination of RWA and blockchain technology, RWA can transcend geographical limitations, allowing users to conveniently complete transactions or other asset utilizations regardless of geographical location, monetary systems, or other influencing factors. When mentioning RWA, people often think of real estate, stocks, etc., and from the fundamental characteristics of RWA tokenization, stablecoins also belong to RWA sector products. It seems RWA is getting closer to us. This is also another layer of RWA's narrative, namely 'inclusiveness,' which allows investors without sufficient capital to enter high-value markets to indirectly invest in 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, and MEME are among the more popular sectors. RWA has consistently been one of the more focused sectors.
Image Source: https://defillama.com/protocols/RWA
In the future, RWA is likely to continue the trend, and the combination of RWA and DeFi may attract more and more investors' attention. In fact, similar high-value assets such as real estate and commodities face settlement difficulties in transactions, and the relevant laws and regulations in different countries vary, which greatly hinders the development of projects related to these high-value assets due to issues of implementation and regulation. Therefore, if projects in the RWA sector want to achieve better development, there must be significant progress in PayFi or cross-border settlement regulation and RWA asset verification, rather than relying on local third parties to assist with settlement or verification as is often the case now. Additionally, stablecoin-related RWA projects are relatively stable, with the mainstream market likely still dominated by the US dollar, followed by the euro and others. However, future projects may exhibit national/regional differentiation, where 'investors in a certain country/region predominantly choose a specific stablecoin.' In such cases, stablecoins that obtain local regulatory licenses may seize the market first. Lastly, another significant trend in the future may be that stablecoins will anchor to bonds, securities, stocks, or funds, leading to the emergence of more products and projects. The reason being that, as mentioned earlier, the settlement and regulatory aspects of these projects have advantages over real estate and other assets. However, in the early future, only projects involving institutions with a certain degree of 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 that carry more community cultural characteristics in RWA.
Project
Below is an overview of recent financing projects, intended solely 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, among others. The total amount raised is $8.7 million.
Currently offers four products:
1. US Treasury Bond Vaults: Fixed-term, fixed-rate USDC earnings, guaranteed by US Treasury bonds;
2. USDC Vault: Demand deposit; variable yield USDC. Guaranteed by short-term US Treasury bonds, money market funds, and other cash equivalents;
3. EURC Vault: Demand deposit; variable yield EURC, guaranteed by euros and short-term euro bonds, money market funds, and other cash equivalents;
4. Rate+ Vault: Fixed-term; guaranteed by investment-grade corporate bonds, commercial paper, emerging market bonds, etc.
Utilizing Vault tokens as indicators in accounting and other operations.
USUAL - Government Bonds
Currently raised a total of $8.5 million and is 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 US Treasury bond tokens.
USD0 ++: An enhanced Treasury bond that locks the principal as collateral using USD0 and uses 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 raised a total of $46.3 million, with a co-founder being 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 entity asset investment on the Huma platform. Distributed Global led the investment, with participation from Hashkey Capital, Folius Ventures, Stellar Development Foundation, and others. It will merge 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 offers cross-border payment financing and credit cards backed by digital assets. Achieved through several funding pools, such as Arf - Cross-Border Payment Financing Pool (based on USDC instant settlement, simplifying cross-border payments); Rain Accounts Receivable Pool (helps entities like DAOs manage expenditures through payroll cards); Jia Pioneer Fund Pool (provides decentralized financing for small businesses, rewarding borrowers who repay with ownership. This is 'Small Business Credit') and other funding pools to facilitate cross-border payment financing.
