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.
- 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.
- Real estate platform Propy tokenizes properties as NFTs proxying LLC ownership.
- Dedicated RWA chains, clearer regulations.
- Growth potential if high interest rates continue.