Over the past five years, the cryptocurrency industry has undergone a continuous evolution, introducing a batch of new themes and gimmicks. In contrast, the theme of "tokenized" "real world assets (RWA)" may become one of the strongest narratives in the cryptocurrency industry in the future.
What is RWA
Real World Assets (RWA) are a class of crypto tokens that represent tangible assets that exist in the world. These use cases range from real estate, commodities, art, and even US Treasuries and machinery.
Although, the real-world assets in the traditional financial industry are huge. However, with the exception of fiat-backed stablecoins such as USDT and USDC, these assets have hardly been utilized in the DeFi space. RWA allows these assets to find a place in the decentralized finance (DeFi) ecosystem, increasing the usability of these typically inaccessible financial instruments and opening up new areas of application.
RWA continues to grow in the cryptocurrency space, with a TVL of over $6 billion in April 2024 as shown in the chart below.
Tokenized RWA — USD
The top three USD stablecoins account for 95% of the market, including Tether (USDT) at $96.1 billion, USDC (USDC) at $26.8 billion, and Dai (DAI) at $4.9 billion. USDT continues to dominate with a market share of 71.4%.
Tokenized RWA — US Treasury Bonds
U.S. Treasuries have surged in popularity during the bear market, with their market value increasing 782% in 2023, from $104 million to $917 million. They were up 1.5% in January, with a market value of $931 million.
Many well-known investment institutions have already laid out RWA projects. Studying their RWA investment portfolios will give you the opportunity to earn dozens of times the return. Our team has selected the following good early RWA projects through research and analysis.
Listed RWA projects:
Ondo Finance（$ONDO）
Ondo Finance is committed to improving the security, efficiency, and accessibility of financial services through institutional-grade on-chain products. It is incubating protocols that can support tokenized real-world assets and traditional cryptocurrencies, and is the first company to tokenize U.S. Treasury exposure.
Goldfinc
Goldfinch is a decentralized unsecured crypto lending credit platform. Unlocking the missing piece of crypto lending for the majority of the world's population.
Polymesh
Polymesh is an institutional-grade permissioned blockchain built specifically for regulated assets, launched by Polymath. It simplifies outdated processes and opens the door to new financial instruments by solving challenges in governance, identity, compliance, confidentiality, and settlement.
Hifi Finance
Hifi is a lending protocol that allows anyone to borrow their cryptocurrencies. Hifi uses bond-like instruments that represent on-chain obligations that are settled at a specific future date. Buying and selling tokenized debt enables fixed-rate borrowing and lending.
Polytrade
A large amount of capital is subject to restrictions and limitations when investing, either due to regulatory or LP-related reasons. Polytrade is able to leverage distributed pools to deploy capital with greater flexibility, thereby reaching out and providing products and services where competitors or other participants are still not present.
RWA projects under construction (stay tuned):
IYK
IYK creates a decentralized platform for all kinds of creators to conduct digital physics experiments by transferring physical objects in NFT format to web3 space. $16.8 million in financing.
Midas
An asset tokenization platform that provides 1:1 access to institutional-grade assets on the blockchain through ultra-liquid BlackRock German bonds, specifically mTBILL securities. $8.75 million in seed funding.
Parcl
is a spot and perpetual exchange designed to trade a composite index of real estate in all cities in the world. The project raised a total of $11.6 million in funding.
Dinar
is a platform for purchasing equity tokens backed by U.S. securities with stablecoins. The project raised $10 million in two rounds of funding.
In short, RWAs inject new vitality into the asset landscape by connecting tradition and technology. Their integration into the blockchain and DeFi sectors is a milestone in promoting inclusion, innovation, and broader investment opportunities.
Previous selections:
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Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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