Executive Summary: Real-World Assets (RWA): Bridging the Gap Between DeFi and TradFi
In this article, I explain what real-world assets (RWA) are and how they bridge traditional and decentralized finance by tokenizing real-world assets and bringing them on-chain. I analyze the current RWA market and key protocols and examine future trends and growth potential.
Summary: Real-world assets (RWA) bridge traditional and decentralized finance by tokenizing real assets to bring them on-chain, providing capital access and utilizing DeFi efficiencies.
What are RWAs:
- Off-chain assets like real estate tokenized into digital tokens.
- Bring real assets on-chain for use in DeFi protocols.
How RWAs work:
- Formalize off-chain, bridge on-chain, connect supply and demand.
- Convert asset info to tokens, use oracles, integrate into DeFi protocols.
RWA market:
- Small but active, fixed income largest sector.
- Loans backed by real collateral or unsecured.
Key RWA protocols:
- Goldfinch: Emerging market business loans with crypto collateral.
- Centrifuge: Tokenized structured credit and pooled assets.
- Maple: Uncollateralized lending with professional credit checks.
Case study:
- Real estate platform Propy tokenizes properties as NFTs proxying LLC ownership.
Future trends:
- Dedicated RWA chains, clearer regulations.
- Growth potential if high interest rates continue.
Full article:
Real-World Assets (RWA): Bridging the Gap Between DeFi and TradFi | CoinMarketCap
Real-world assets (RWA) are the missing link between DeFi and TradFi. Learn how DeFi is bringing RWA on-chain, blending the best of both worlds!
CoinMarketCap