RWA Real World Assets
Real-world assets, or RWAs, broadly refer to any asset (whether physical, digital, or data-driven) that derives its value from its existence outside of the blockchain. By tokenizing RWA, you are basically creating a digital twin that exists on a blockchain.
Stablecoins are the OG of real-world assets. Pegged to a fiat currency such as the US dollar or euro, stablecoins provide a stable and liquid alternative to fiat currency. Beyond traditional currency, it is possible to tokenize other financial assets, such as insurance, stocks, securities, treasuries, stocks and indices. The tangible assets that can be added to the chain are quite unlimited. Precious metals, commodities, agricultural products, real estate, works of art, and music licenses can benefit from tokenization.
WHAT ARE REAL WORLD ASSETS?
Tokenization can provide greater transparency, greater liquidity, and better access to real-world assets. Additionally, by dividing assets into fractions through a process known as fractionation, many people can own high-value portions of assets. This democratization fosters engagement, empowers smaller investors, and broadens the distribution of wealth, reshaping the landscape of asset ownership and investment dynamics.
Efficiency
Tokenization of real-world assets allows fractions of high-value assets to be efficiently traded 24/7 on digital exchanges, bypassing brokers and facilitating fast global transactions at scale. This streamlines processes such as cross-border settlements and automated income/profit redistribution.
Trust
A key benefit of tokenization is that it enables atomic settlement of real-world assets (traded against tokenized fiat money) without the need for a trusted third party to act as a clearing agent, as traditional clearinghouses and CSDs do today. Blockchain protocols facilitate who goes first in an exchange through intrinsic consensus mechanisms, increasing trust and efficiency in transactions.
Transparency
A public, immutable record on the blockchain provides full visibility into asset ownership and transaction activity. This establishes clear title and provenance while preventing fraud through open tracking of transfers, liens and other details.
Compliance
Smart contracts can automate regulatory requirements and KYC/AML compliance checks. Digital tokens can also simplify compliance with tax reporting obligations through integrated tools and public ledgers.
Costs
Eliminating middlemen reduces traditional transaction fees and documentation expenses. Continuous token management through blockchain consensus can reduce maintenance costs compared to physical assets and legacy record keeping.
Liquidity
Fractioning RWA assets facilitates greater liquidity. Tokens representing RWA can be easily traded at any time. This constant tradability forms a new secondary market for real-world investments that was not possible before.
Types of RWA
Stablecoin - Real Estate - Commodities - Metals Prices - Consumer Goods - Art - Intellectual Property - Books, Music, Films - Vehicles - Invoices - Securities - Pay stubs
Applications
Loans - Raise Funds - Investment - Administration -
