Blackrock, one of the largest investment firms, has announced its entry into the Real World Asset (RWA) tokenization space. This move is expected to attract other institutions and potentially become the next big trend in the traditional finance (Tradfi) industry to enter the cryptocurrency market. In fact, RWA has the potential to reach a total market value of $10 trillion by 2030, according to predictions by @21co__. Currently, the total market value of RWA is less than $5 billion, indicating significant room for growth.
The concept of RWA involves tokenizing real-world assets and putting them on the blockchain. This allows for secure storage of asset certificates and reduces transaction restrictions, enabling assets to be traded 24/7 globally. The potential for tokenizing various assets is immense, with the global real estate market alone valued at $280 trillion, not to mention stocks, commercial bills, and other financial products.
Blackrock’s recent launch of the Bitcoin ETF (Exchange-Traded Fund) was seen as a significant indicator of Tradfi’s entry into the crypto market. Now, with the introduction of the world’s first tokenized fund, BUIDL, other institutions are likely to follow suit, further driving the growth of the RWA narrative.
Here are six RWA projects worth paying attention to:
1. MakerDAO: This well-established DeFi (Decentralized Finance) project has gradually transitioned from crypto-backed lending to an RWA protocol. Approximately 20% of the reserve assets for the DAI stablecoin are composed of RWA. MakerDAO also derives some of its revenue from RWA.
2. Ondo Finance: As the leading player in the RWA market, this tokenized securities protocol invests in US Treasury bonds and commercial bills. The USDY token yields 5.1% and has a TVL (Total Value Locked) of $104 million. The OUSG token, which invests in short-term US government bonds, yields 4.96% with a TVL of $94 million. The OMMF token, which invests in US money market funds, has a yield rate of 4.73%.
3. Xend Finance: This RWA platform, backed by Hashkey, Binance, and Google for Startups, integrates on-chain and off-chain financial assets. It provides services such as yield aggregation and multi-chain wallets on the blockchain, as well as asset tokenization off-chain.
4. Realio Network: This Web3 ecosystem focuses on the issuance and management of RWA assets. It consists of multiple interconnected Layer 1 networks.
5. LandX: This project tokenizes agricultural yields, ensuring the proper production of crops. It allows farmers to earn stable income while giving crypto funds access to commodity returns. While commodity returns may not lead to sudden wealth, they have historically been effective in combating inflation.
These are some of the RWA projects that I believe are worth keeping an eye on. The potential for growth in the RWA space is immense, and with the entry of institutions like Blackrock, the future looks promising for tokenization of real-world assets.
