Asset tokenization of the real world has emerged as one of the primary narratives of 2024. What's new in this segment for March?
In March, the segment of tokenized Real World Assets (RWA) demonstrated impressive dynamics. Over the past month, the sector's capitalization surged by nearly 30%, surpassing the $9 billion mark.
BlackRock
On March 21, the world's largest asset manager, BlackRock, announced the launch of #BlackRock USD Institutional Digital Liquidity (BUIDL). This marks the company's first fund of tokenized assets, fully backed by US treasury bonds, repurchase agreements (REPO), and fiat.
During the first week, BUIDL attracted over $240 million. One of the investors was the crypto startup Ondo Finance, the issuer of the US treasury stablecoin OUSG.
Significant Milestone
Following the news from BlackRock, the sector of tokenized government securities reached a new milestone. According to Dune, their blockchain volume is currently estimated at $1.08 billion. Currently, 17 funds are involved in tokenizing US treasury bonds.
The most popular network for tokenization is Ethereum (ETH), with over $700 million attributed to it. Following Ethereum are Stellar (XLM) and Polygon (MATIC), with market shares of $358 million and $13 million, respectively.
DWF Labs Bets on RWA
Market maker DWF Labs invested over $10 million in the crypto project TokenFi. The latter is an extension of the Floki ecosystem and is involved in #RWA tokenization. Importantly, the startup utilizes artificial intelligence (AI) technologies for tokenization.
Libere - New Tokenization Protocol on Polygon
On March 19, a new Web3 protocol for tokenized assets called Libre was launched on Polygon. It was developed by WebN Group and Laser Digital, managing alternative investments.
Libre operates on the basis of Polygon Chain (CDK) smart contracts. The platform supports RWA tokenization, collateral lending, and automated settlements for separately managed accounts (SMA). The platform provides institutional investors with access to tokenized real-world assets in compliance with all regulatory requirements.
The project is not limited to the Polygon network. Libre is also working on integrating with other first (L1) and second (L2) layer networks through the Libre Gateway.
Mantra Project Secures $11 Million Funding
The startup #Mantra (OM), which aims to create an "adapted-to-RWA tokenization network" based on the Cosmos blockchain, raised $11 million in investments. The majority of the funding came from Shorooq Partners fund. Other participants in the round included Three Point Capital, Forte Securities, Virtuzone, Hex Trust, and GameFi Ventures.
The project targets Middle Eastern countries and develops tools for issuing and trading RWA tokens. Currently, Mantra is in the final stages of obtaining a license from the regulator in Dubai.
USDA - Stablecoin for DeFi Yield and Tokenization
Decentralized (DeFi) protocol Angle introduced the new stablecoin USDA. The asset is fully backed by US treasury bills and tokenized treasuries. Token holders can earn passive income of at least 5% annually.
#USDA is currently in beta testing. According to the project team, broader implementation is planned for April. The stablecoin will not be available to investors residing in the United States.
RWA Projects Also Face Hacks
And lastly, on a less positive note, the protocol Curio, involved in real-world asset liquidity, fell victim to a hack at the end of March. As a result of the breach, the platform lost over $16 million in cryptocurrency.
The attacker exploited a vulnerability in one of Curio's smart contracts, which operated based on MakerDAO. Thus, the hacker managed to unlawfully mine about one billion Curio Governance Tokens (CGT), which were subsequently successfully withdrawn.
The project team announced that it would compensate all affected users. To achieve this, developers have devised a special program. #Curio will gradually reimburse funds to clients, approximately over the course of four weeks. However, returning the largest sums may take up to a year, platform representatives noted.
Top 10 Best Real World Assets (RWA) Coins in 2024
Ondo Finance (ONDO) is a decentralized platform that facilitates the tokenization of various assets, including real estate, goods, and digital collectibles. The project aims to democratize access to investment opportunities by enabling fractional ownership of assets, thereby increasing liquidity in the RWA market.
Chainlink (LINK) is a decentralized oracle network that aggregates information from multiple sources and connects smart contracts with real-world data. The project plays a key role in asset tokenization by allowing smart contracts to securely interact with external data such as price feeds, weather data, and market statistics. The native token LINK is required to pay for oracle services and is used to enhance data processing accuracy and support contract stability on the network.
Synthetix (SNX) is a decentralized protocol that enables the issuance of synthetic assets, including RWA, goods, and cryptocurrencies, for trading on the blockchain. The project utilizes oracles to track underlying assets in real-time. Synthetix's innovative approach to tokenization increases liquidity and accessibility in the RWA market, opening up new investment opportunities for users worldwide.
MakerDAO (MKR) is a decentralized autonomous organization (DAO) that governs the Maker protocol. Through its collateralized debt positions (CDPs) and governance mechanisms, MakerDAO enables the tokenization of real assets and the issuance of stablecoins backed by DAI. With its decentralized governance model and extensive infrastructure, MakerDAO offers a reliable platform for tokenization and trading on the blockchain.
Ribbon Finance (RBN) provides the ability to create options for various assets, including RWA. By offering solutions for liquidity and risk management, the platform facilitates tokenization and trading, providing a seamless experience for investors looking to hedge positions or speculate on the value of tokenized assets.
Pendle Finance (PENDLE) introduces new investment opportunities for market participants by allowing the tokenization of future cash flows on DeFi platforms and trading them. The native token PENDLE is used for project governance: holders lock it on the Pendle Finance website and receive vePENDLE in return, which can be used to vote for the addition of new assets for tokenization and their pools on the platform.
Oraichain (ORAI) is a decentralized oracle platform that provides secure and reliable data feeds to smart contracts across various networks. Bridging the gap between blockchain and real-world data sources, it facilitates the tokenization of real assets and ensures the accuracy and integrity of RWA tokens. Orai enhances transparency and trust in the RWA market, enabling investors to make informed decisions and minimize risks.
Centrifuge (CFG) is a protocol for decentralized finance that revolutionizes the tokenization of real-world assets. Centrifuge converts these assets into non-fungible tokens (NFTs), unlocking their value and enabling seamless integration into the broader DeFi ecosystem. The platform's native token CFG is used to pay transaction fees, participate in project governance, and ensure network security.
Creditcoin (CTC) is a decentralized credit protocol that allows the tokenization of credit assets, including loans, bonds, and debt instruments, for trading. The native token CTC is used for paying fees and as a reward for mining.
Chromia (CHR) is a blockchain platform that enables the tokenization of real assets and the creation of decentralized applications (DApps), opening up new possibilities for investors and asset owners. The CHR token is used to facilitate the deployment and payment of DApp fees on the network, as well as for staking and rewarding users.
Summary
Tokenized Assets: Tokens that represent the value of underlying assets, with predictions of the tokenized asset market reaching $10 trillion by the end of the decade.
RWA Market Dynamics: The Real World Assets (RWA) market showed impressive growth in March, with a 30% increase in capitalization, surpassing $9 billion.
BlackRock’s BUIDL: BlackRock launched its first tokenized asset fund, BUIDL, backed by US Treasury bonds, REPO agreements, and fiat, attracting over $240 million in its first week.
Tokenization Networks: Ethereum is the most popular network for tokenization, followed by Stellar and Polygon, with respective market shares of over $700 million, $358 million, and $13 million.
Security Incident: The Curio protocol suffered a hack, resulting in a loss of over $16 million in cryptocurrency due to a vulnerability in a smart contract based on MakerDAO.