What Does it Mean to Tokenize Real-World Assets?
In this piece, let's understand how RWA tokenization works đ
The core idea of RWA tokenization is basically to create a virtual investment vehicle on the #blockchain linked to tangible things like real estate, precious metals, art and collectables.
The advantages of keeping the ownership of the real-world items on the chain are đđ»
đ It lowers costs by removing middlemen.
đ It allows fast, efficient 24/7 trading of items.
đ It lowers the barrier to entry and creates more liquidity.
In the case of fiat currency, stablecoins are the most obvious form of RWA tokenization.
Tokens such as #Tether or #USDC are tokenized dollars.
There are various RWA protocols that are capable of tokenising RWAs from a wide variety of asset classes.
There are various challenges in the process of implementing RWAs, which include legal and regulatory compliance, valuation and auditing, custody and security, governance and trust, as well as interoperability and scalability concerns.
