RWA Landscape 2024
Trump’s campaign in crypto revolved around Defi and RWA; part of Liberty Finance, yes that goes for Defi, but in the case of RWA speeches like this 👇🏻go unnoticed
The main issue is whether he will keep his word on it. I think he will.
Moreso, RWA advances DeFi by creating more yield opportunities through the tokenization of new asset classes.
That said, let’s delve into RWA—Real World Assets—and examine its current state in 2024.
In this article, RWA will be broken down, and projects building within each RWA sector will be categorized
Real World Assets(RWA) is the tokenization of tangible physical assets e.g., gold, real estate, bonds, into on-chain tokens that can be traded on the blockchain. The concept of Real World Assets revolves around deploying a recognized asset on-chain by issuing a token backed by the asset in a process called tokenization and allowing people to trade it. These tokens represent ownership of the assets and allow easy trading in digital form. This process, called tokenization, increases market efficiency and enables smaller investors to access traditionally high-value assets.
Tokenization is the process of transforming real-world assets like gold, real estate into digital token on the blockchain. It opens more opportunities in contrast to traditional finance and improves market efficiency. RWA tokens carry the benefits associated with the assets, e.g., dividends, and are backed by real value. Hence, they are a great choice for investors and institutions.
Benefits of Tokenization
Tokenization offers the opportunity of dividing assets into smaller units, making high valued assets available to small investors.
Tokenization embeds legal compliance into the asset, automating regulatory processes and reducing risks.
Tokenization improves the settlement of transactions, hastening the process of trading assets and reducing counterparty risks.
Tokens are available to trade 24/7 reducing settlement times and intermediaries are eradicated.
Smart contracts make it easy for both parties to view data related to the tokenized asset, enhancing trust and transparency.
WHY RWA ?
DeFi yields reduced significantly in 2022 and 2023 due to tragedies like the bankruptcy of FTX, Luna, etc. These issues had a bad effect on DeFi and a solution was needed. As DeFi yields dropped due to significant industry events, RWAs emerged as a solution by bringing stable, real-world value into the DeFi space, offering secure and diversified yield opportunities for investors. Real World Assets were invented amidst the search for a solution, and it attracted the market, increasing the DeFi TVL once more.
The web3 space is evolving rapidly, and many people are trying to build the best innovative solutions to solve real-world challenges. There are several projects waiting to launch, and many are already in the limelight. These protocols range from land tokenization to stablecoins, fixed income like bonds and bills, and so on. It’s a different ball game.
The tokenization of different financial assets is the next step after Bitcoin ETFs, according to the CEO of BlackRock. Adoption of Real-world assets ensure huge economic benefits and facilitate seamless asset trading and maintenance of record. With this transparency, traceability and monitoring helps to establish a stable economic ecosystem.
Using stable assets like USDT for trades, traders have access to lending and borrowing, investing in bonds and improving the economy as a whole. The Boston Consulting Group (BCG) estimated that the market value of tokenizable assets by 2030 is $16 trillion, depicting that the ecosystem still have room for growth.
Market Comparison Analysis
According to Coingecko data, as of November 2024, the RWA sector has a market cap of $11,813,911,303 with a 24hr trading volume of $2,167,006,972. In contrast, the DePIN sector has a market cap of $31,698,935,687 and the AI sector has a market cap of $34,492,874,135. This market comparison highlights the RWA sector as a young and lucrative industry in the cryptocurrency ecosystem.
According to DeFillama data, the TVL (Total Value Locked) of RWA projects have increased significantly over the past few months. Data from Dune Analytics also shows that the number of transactions on RWA projects is increasing continuously.
Likewise, the data from Dune Analytics shows an increase in the number of RWA token holders increasing progressively.
The RWA category has huge growth potential despite low market valuations in contrast to the AI and DePIN sector. Traditional asset markets valued in more than billions of dollars offer great tokenization opportunities.
Thus, it’s expected that the market will increase substantially as more traditional assets are tokenized. While the RWA sector is still young, its rapid growth signals strong future potential compared to other sectors such as AI or DePIN. This research article will highlight all the RWA categories and projects building on each of them.
RWA CATEGORIES
CATEGORY - Treasuries
Projects that tokenize government bonds like U.S. Treasury bonds, notes, and bills, enabling crypto traders to invest in stable and yield-bearing assets.
Midas aims to lead internet native investing by eliminating traditional barriers that have restricted access and making it available to everyone. It deals with institutional grade assets safeguarded from bankruptcy and provides full transparency via independent reports.
OpenEden offers 24/7, on-chain access to tokenized US Treasury securities for Web3 CFOs, DAO treasury managers, and buy-side institutional investors seeking low-risk, highly liquid crypto cash management solutions.
Ondo Finance tokenizes US treasuries and is a decentralized investment bank focused on connecting different stakeholders in the DeFi ecosystem. The protocol is building the next generation of financial infrastructure to improve market efficiency, transparency, and accessibility.
CATEGORY - Yield-bearing assets
Projects that tokenize financial products such as loans, real estate, and bonds for higher and reduced-risk yields.
MetaStreet is a yield infrastructure protocol. It structures sources of high yield into a tradable asset. It also features an Automatic Tranche Maker (ATM) for permissionless lending.
Liquid Credit token represents lender positions.
It solves issues around lending protocols by eliminating dependence on centralized price oracles with dynamic interest rates and permissionless pool creation.
Lendr is the first RWA protocol integrating liquid staking and protocol revenue sharing. It aims t create the highest ROI RWA tokens with global access for an asset class. Likewise, enables returns on popular asset classes like gold, U.S. real estate, etc.
Isle Finance connects the real world supply chain to the blockchain. It’s for globally accessible supply chain finance, bringing it onchain and expanding capital access while increasing the supply chain resilience.
Cogito Finance provides institutional-grade investment products by bringing fixed-income assets and equities onchain. By offering three investment products in the form of smart contract vaults — GFUND, TFUND, and XFUND — its bringing traditional financial assets onchain.
HiYield enable access to traditional capital markets for web3 natives. It offers flexible onchain and offchain infrastructure to meet your needs.
The KUMA Protocol is a decentralized protocol issuing interest-bearing tokens backed by regulated NFTs, themselves backed by Real World Assets (RWA).
MANSA is a DeFi platform dedicated to providing liquidity solutions to cross-border payment companies. It ffers short-term financing to ensure payment providers have adequate funding to facilitate cross-border settlements for individuals and businesses, particularly in Africa and other emerging markets.
Nest staking is a native yield, powered by tokenised RWAs and crypto native assets - Built on plumenetwork.
Tprotocols is a decentralized RWA lending protocol which facilitates the liquidity and mass adoption of RWA tokens in DeFi ecosystems. RWA institutions can borrow USDC against their RWA tokens in separated pools with tailored risk parameters, interest rate model and liquidation method.
CATEGORY - Blockchain
These projects provide the infrastructure suited to host RWA projects, including dApps and tokenization.
Plume is the first fully integrated and modular chain focused on RWAfi. They’ve built the first modular and composable RWA-focused EVM-compatible chain designed to simplify onboarding for all types of assets and streamline capital onboarding through native infrastructure and RWAfi-specific features unified chain-wide. For the first time, they are enabling a composable, comprehensive ecosystem of DeFi built around RWAfis with an integrated end-to-end tokenization engine and a network of financial infrastructure partners for builders to plug and play. They have over 180+ projects building on their private devnet today, with everything from private credit to equities, collectibles, and more.
Polymesh is an institutional-grade permissioned blockchain built specifically for regulated assets. Its specificity gives the chain (and the applications built on top) an advantage over general-purpose blockchains.
Assetchain is a blockchain platform under Xend Finance that focuses on the tokenization and on-chain management of Real-World Assets (RWA) in the On-Chain Asset Environment (OAE). OAE is designed to enhance transparency, compliance, and traceability to assets like real estate, commodities, and other financial assets.
Realio network is an interoperable Layer-1 multi-chain ecosystem focused on the issuance and management of digitally native Real-World Assets (RWAs). Purpose-built and designed for a new open-source, permissionless financial world.
CATEGORY - Stablecoin
Projects backed by real-world assets like fiat currencies and treasuries outside the crypto space. These projects offer greater yield and stability.
Ledgity Yield is a stablecoin yield project backed by RWA that provides scalable and institutional grades treasury management solution for stablecoins holders. Also, bridges the gap between DeFi and TradFi by offering real yield based on real assets.
Anzen finance is a decentralized platform providing access to USDz, which is a digital token backed by a diversified portfolio of private credit assets.
Recently part of the winners of Ethena’s RWA reserved allocation funds, Mountain Protocol is a yield-bearing stablecoin platform. It possesses features like permissionless composability, regulatory compliance, enterprise-grade setup and a seamless user experience. The platform allows users to collate digital asset wallet addresses and send the details to fund their accounts. All funds are converted automatically to USDM.
Perper is a stablecoin that is pegged 1:1 to the Euro, ensuring that each Perper token is fully backed by an equivalent amount of Euros held in reserve. This provides users with a secure and stable digital currency that is easy to transact.
Usual Money is a secure and decentralized fiat stablecoin that aggregates tokenized RWAs from projects like Ondo, Mountain Protocol, transforming them into a permissionless, on-chain, and composable stablecoin. It redistributes power and ownership to users and third parties, similar to cases where the stablecoin issuer would own the company and its associated revenues.
CATEGORY - Real Estate
RWA real estate projects tokenize physical properties like houses and land, making it easier for investors to trade. These projects bridge the gap between the real-world estate market and the digital space.
Parcl is a perpetual exchange built for real estate trading. It supports cross-margin trading on different real estate markets. The design is influenced by Synthetix perps, and the features of the platform include scalable liquidity provision, flexible governance, risk management, isolated pools and solvency.
Landshare is a tokenized real estate ecosystem where properties are managed on the behalf of the owners. It unlocks seamless RWA involvement by owners having a share of real-world property by holding Landshare RWA tokens.
Propbase is a decentralized property transaction marketplace for investing properties located in attractive and lucrative areas around the world. It’s built on Aptos chain with low fees, security, and scalability.
Real T tokenizes real state for fractional ownership and is a hybrid of realty, real estate property and token. It provides a platform for trading property shares on-chain and aims to democratize access to real estate investment opportunities.
Estate protocol is a tokenized real estate marketplace which is bridging the gap between physical estate and the numerous possibilities of the digital world.
Laprop is a platform for buying and investing in real estate. It’s committed to democratizing access to the real estate market by facilitating financial inclusion for those who have historically lacked access to real estate ownership due to financial resource limitations or reluctance to take on significant risks.
RealtyX is an evolving and learning platform where the community come together to share and learn about DAOs, and real-world assets structures and scenarios under different regimes.
Rentrium is bringing institutional quality real estate assets on-chain for international investors. Its first offering is centered around the parking garage as an asset class. Fundamentally, Rentrium aims to make it easy for investors around the world to get exposure to quality US real estate in a decentralized way.
CATEGORY - RWA Lending and borrowing
Projects that tokenize physical assets to create digital tokens that can be used as collateral for loans. They offer access to liquidity for holders and a novel class of yield-bearing rewards.
Clearpool is an RWA protocol built to solve the issue of over-collateralization of institutional borrowers in DeFi face. It’s a credit market that gives borrowers direct access to a decentralized network of lenders. Clearpool provides yields to the lenders and utilizes single borrower liquidity pools & tokenized credit.
Hifi Finance is a protocol that brings fixed-rate and fixed-term lending to Ethereum based chains. It allows borrowing against tokenized assets from real estate to stocks.
Maple is an institutional capital market founded in 2019 by a team of ex-bankers and credit investment experts. The protocol provides infrastructure for credit professionals to manage on-chain lending businesses and connect institutional lenders and borrowers. It’s transforming the capital markets by providing high-quality lending opportunities for financial institutions, liquidity providers, and companies.
Goldfinch is a decentralized, globally accessible credit protocol, with a mission to bring the world’s credit activity on-chain while expanding access to capital and fostering financial inclusion.
CATEGORY - Private credit
Private credit projects provide loans to businesses and individuals. They tokenize private debts or use real-world assets as collateral so lenders in the DeFi ecosystem can invest in private loans.
Helix leverages data & AI to connect on-chain investors to sustainable yields from real-world private borrowers. Acting as an intermediary between onchain lenders and offchain borrowers, Helix provide SME unscalable access to global capital.
Credbull is the first fully integrated and transparent DeFi Credit Platform for SME Real World Assets.
TProtocol enables leading asset managers to safely and compliantly tokenize their strategies and access a rapidly growing and underserved global market for institutional grade yield products.
CATEGORY - RWA Tokenization
Aims to bring tangible assets like private equity and commodities on-chain for improved liquidity and fractional ownership.
Centrifuge is a RWA platform where investors gain access to different assets, scaling transparency and gaining better insights into their portfolio. Asset managers tokenize their assets and streamline access to investors & service providers, unlocking multiple streams of income.
With Centrifuge, individuals/businesses seeking finance tokenize their assets, creating unique NFTs that represent ownerships. The NFTs are used as collateral for loans obtained from the Centrifuge platform.
Opulous democratizes music financing while strengthening the artist-fan connection to create an equitable and supportive music economy.
Nexera connects real and digital economies to infrastructure designed to integrate RWA in the space. It features an omnichian technology that aids digitization of RWAs and gives access to trillions in liquid, transferable tokenized assets.
FortunaFi is bringing real world assets onchain to enable higher yields. It delivers all-in-one liquidity solutions for stablecoin issuers, protocol treasuries and traditional entities.
Swarm market seeks to bridge traditional finance and blockchain technology by enabling users to tokenize and exchange real-world assets, including real estate, commodities, and private equity, on its decentralized marketplace.
RWA is focused on transforming the financial landscape by providing a comprehensive platform for the tokenization of real-world assets. It enables businesses to unlock liquidity, expand market reach, and drive value creation through our advanced multi-asset platform, offering tokenization-as-a-service, a launchpad, and a marketplace.
Blocksquare powers thousands of marketplaces worldwide, connecting investors to real estate opportunities in their region. With this, entrepreneurs can digitize real estate assets at a fraction of the cost.
CATEGORY - Carbon credits
Carbon credit projects are focused on reducing global carbon emissions with blockchain technology and provide rewards for businesses and individuals that offset their emissions.
Helios provide global renewable energy solutions for everyone and enables web3 investment in impactful solar projects for suers to earn stable yields uncorrelated with crypto markets and avert tons of CO2 emissions every year.
Carbify is a blockchain project transforming the carbon markets. The project is planting millions of trees in the Amazon rainforest and each of these trees are NFTrees- representing a real agroforestry system onchain.
Klimadao is an open climate finance protocol that facilitates public goods and common-pool resources to drive environmental markets.
CATEGORY - Commodities
Projects that convert physical commodities like gold, oil, wine, and other raw materials into tokens. These enable access to these assets on-chain to build liquidity and expand investment reach.
LandX is a decentralized protocol, closing the gap between farmland owners and crypto investors through blockchain-based perpetual commodity vaults.
Tiamonds are NFTs to represent ownership of individual and real-world diamonds. Tiamonds NFTs are based on the Ethereum Blockchain and backed one on one by an individual diamond.
CATEGORY - Assets Tokenization
Projects that focuses on bringing real-world assets onchain by creating digital representation that represent ownership of these assets.
INX Group focuses on the investment, trading, and tokenization of crypto and security tokens. It’s the home of the first SEC-registered exchange token ($INX).
TokenFi is an all-in-one tokenization platform for creating tokens and tokenizing Real World Assets (RWA) in a few clicks and a no-code process.
CATEGORY - RWA Marketplace
Decentralized platforms that allow the tokenization, trading, and investment of real-world assets.
Polytrade is the global gateway to tokenized Real-World Assets ("RWAs"). Backed by & partnered with industry giants Mastercard, Polygon, Alpha Wave, and Matrix Partners, Polytrade’s marketplace brings together tokenized t-bills, credit, stocks, real estate, commodities as well as collectibles, art, IP, creator royalties, luxury goods from all chains to a single platform. Using its own RWA-focused ERC-6960 technology, Polytrade enables users to discover, trade, fractionalize, cross-chain bridge, leverage, trade and simply do more with RWAs.
DexAuction is a decentralized Auction Protocol created to power decentralized exchanges, NFT Marketplaces, traditional exchanges and to eventually redefine the way we trade assets.
BlockBar sells the highest quality wines and spirits authenticated via blockchain. It sells NFTs, or digital tokens, that correspond to physical bottles, barrels, and casks. When ready, owners exchange the digital version for their physical release.
Buk Protocol is a solution stack of modular components which can be used to mint, trade and perform DeFi transactions for all assets that expire also known as dynamic assets.
CATEGORY - AI GPUs
These projects leverage GPUs for high-performance computing and AI workloads. They make GPU resources tokenized and tradable as RWA.
Compute Labs is built to tokenize enterprise grade GPUs. It’s the foundation to enabling trading, staking, pricing compute labs and derivatives for the emerging asset class.
Mimo Capital AG is authorized to bring real-world assets, such as sovereign and corporate bonds, onchain allowing for more transparency as each token is linked to a specific set of underlying assets held in custody.
CATEGORY - IP
Involves the tokenization and management of IP assets such as trademarks, and copyrights, on blockchain platforms.
FANDORA is a fractional investment and tokenization platform for Content IP - wherein curated creators, can offer their projects to be ‘fractionally’ invested by eligible investors — and enjoy the returns from the said IP.
CATEGORY - Real world yield
Projects that aim to bring real-world assets, including small- and medium-sized enterprises, on-chain for deep liquidity and yield.
YieldBricks combines RWA yield and DeFi vaults to create borderless investing. It is a protocol for tokenizing RWA returns, bridging the gap between DeFi rewards and traditional investing. YieldBricks allows users to unlock the huge potential of RWA while enjoying the perks of DeFi. Focusing on retail investors worldwide, it aims to improve real estate investment and enhance efficiency.
Florence Finance is a bridge between crypto liquidity and real-world lending using standardized DeFi building blocks and the blockchain to address the Real World SME funding gap and bring yield on-chain.
CATEGORY - Perps
Focused on bringing perpetual contracts to physical assets like stocks, real estate, etc. These projects create perpetual contracts that offer exposure to RWAs and their price movement.
RWAX exchange provides an endless range of real-world asset indexes to decentralized finance for the first time - allowing crypto traders to hedge against volatility and earn passive income. Diversify into real-world assets from real estate and commodities to AI, cannabis and more emerging industries through community-voted indexes.
Sliver Koi is a high-performance equities perpetuals exchange designed to democratize access to global markets. The platform offer secure, fast way for professionals to trade in any global market they choose.
CATEGORY - DEX
RWA projects that are decentralized exchanges facilitating P2P trading of tokenized physical assets.
Solid Violet aggregates primary and secondary on-chain Real World Asset (RWA) markets, creating a unified experience with deep liquidity for issuers and investors. A bottom-up, decentralized-first, and user-centric solution for compliant utility and DeFi integration solves many of the unique challenges faced by RWAs.
CATEGORY - ORACLE
Projects that ensure tokenized assets like bonds, carbon credits, and commodities are correctly priced and that physical-world transactions can reflect on-chain.
Chainlink is the leading decentralized oracle ecosystem that allows smart contracts to connect seamlessly with real world data. It enables cross-chain functionality, and accelerates dApp development by providing reliable data.
CATEGORY - Insurance
These insurance projects involve using smart contracts to tokenize and manage real-world insurance assets, including insurance contracts and reinsurance.
Nexus Mutual is a decentralized insurance alternative that allows members to join and share risk. Members can purchase cover products that protect against different kinds of risk. The Nexus Mutual protocol is built on Ethereum and provides the infrastructure for members to buy cover, underwrite risk, assess claims, and build risk management businesses.
CATEGORY - Network
Projects that facilitate the management, exchange, and tokenization of assets, enhancing liquidity for tokenized RWAs by connecting buyers to sellers and investors.
Hathor Network is a decentralized network that allows digital asset transactions and simplifies tokenization. Offers token issuance and management to allow individuals and companies to represent real world assets onchain.
CATEGORY - Global bonds
Aimed at making global bonds easier to trade on-chain and accessible globally.
Spiko Finance is a blockchain platform focusing on the tokenization of global bonds. It offers tokenized money market funds (MMFs) backed by U.S. Treasury bills and European government bonds.
Ethena is a derivative infrastructure built to transform Ethereum into a Global Internet bond using delta-neutral positions on staked ETH, creating the first yield-bearing stablecoin (USDe). The synthetic dollar (USDe) provides a scalable solution for money achieved via Bitcoin collateral and Ethereum. The peg stability is supported via delta hedging derivative positions, maintaining a stable value referenced to the spot and future crypto assets.
CATEGORY - Legal tech
Leverages blockchain to streamline legal processes and regulatory compliance for real-world assets. It also involves tokenizing legal documents for easy verification.
Mattereum is a UK-based legal tech company that specializes in bringing RWAs onchain via legally enforceable smart contracts. Focused on bridging traditional legal frameworks and blockchain tech to enhance the reliability of RWA transactions.
CATEGORY - Certification protocol
Projects that use blockchain to verify the authenticity of certificates and ownership of real-world assets to prevent fraud.
ORIGYN is a protocol for decentralized certificates of authenticity, functioning with its OGY governance token, built on ICP network.
CATEGORY -DeFi
Projects focused on integrating RWAs into the blockchain financial system in terms of yield, lending, borrowing, and investment.
Pendle is a permissionless yield-trading protocol where users can execute various yield-management strategies.
CATEGORY - Asset manager
Projects that manage RWAs efficiently and provide services like risk management and investment strategies for tokenized assets.
Anemoy is built on the Centrifuge protocol and supports the entire lifecycle of onchain asset management. It provides institutions with end-to-end services across compliance, asset management, and seamless integration and management of real-world assets.
Superstate is an asset management firm bringing traditional assets onchain, that benefit from the speed, and compliance advantages of tokenization.
CATEGORY - BROWSER
RWA projects that are browser-based, used to surf the net and backed by physical assets with rewards for users.
Moso is a crypto rewards site and browser extension that lets users earn the crypto of their choice when they shop from partnered merchants. The reward (%) of crypto is determined by the merchant partners.
CATEGORY - Equities
Integration of real-world equity, like stocks and shares, into blockchain-based platforms. Allows tokenized stock trading and equity-backed DeFi products.
Dinari is platform that aims to bridge traditional financial assets with blockchain by creating asset-backed tokens. Users gain exposure to tangible assets like equities (stocks), which are tokenized onchain.
CATEGORY - Collectibles
Tokenization of assets like art and rare items that can be verified, stored, and traded on-chain.
GainFi harnesses AI-enhanced computer vision and web3 rewards to offer a fitness platform where every move is analyzed for form and efficiency, rewarding users with digital assets and tokens for their physical activity.
CATEGORY - Private market
Investment opportunities, like venture capital and private equity, tokenized and accessible via blockchain
Jarsy is a blockchain-based marketplace for tokenized real-world assets, designed to globalize access to top-quality investments. It aims to democratize these opportunities for global investors, ensuring transparent and robust investments for all, thus promoting financial inclusion and empowerment.
Conclusion
Real World Assets (RWAs) is an essential advancement to DeFi, exposing new opportunities for financial inclusion and accessibility. By converting physical assets into on-chain tokens, RWAs are set to be the bridge that connects TradFi and to DeFi, offering investors compliant, transparent and liquid assets.
As the sector increases, it’s expected that RWAs will play a crucial role in the future of DeFi, with diversified investment options and reforming global asset management.
This is the deep dive👍🏻.