RWA: The Rise of Real World Assets

1. Concept and Development of RWA

RWA stands for Real World Assets, referring to the representation and trading of real-world assets in a digital and tokenized manner within the blockchain or Web3 ecosystem. These assets include real estate, commodities, bonds, stocks, artworks, precious metals, intellectual property, and more. The core idea of RWA is to leverage blockchain technology to bring traditional financial assets into the decentralized finance ( DeFi ) ecosystem, enabling more efficient, transparent, and secure asset management and trading.

The significance of RWA lies in enabling the liquidity of hard-to-move assets from the real world through blockchain technology, allowing participation in lending, staking, trading, and other operations within the DeFi ecosystem. This way of connecting real assets with the blockchain world is becoming an important development direction in the Web3 ecosystem.

The uniqueness of RWA lies in the fact that it requires both on-chain technological support from smart contracts and legal protection of the underlying assets in the real world. The tokenization process involves not only issuing tokens on the blockchain but also includes the purchase and custody of the underlying assets, establishing a legal framework for the relationship between tokens and assets, and other complex processes.

The development of RWA can be divided into three stages:

1. Early Exploration Phase ( 2017-2019: Conceptual emergence, some projects began to explore security tokenization, commodity tokenization, etc.

2. Initial Development Stage ) 2020-2022: More projects have introduced RWA, such as Centrifuge, MakerDAO, etc. Traditional financial institutions have also started to pay attention and make arrangements.

3. Rapid Expansion Phase ( From 2023 to present ): Large asset management companies are attempting to tokenize parts of their asset portfolios, and regulators have also begun to intervene and establish relevant frameworks.

2. Main Application Areas of RWA

RWA has shown application potential in multiple fields:

( real estate industry

Real estate tokenization can enhance asset liquidity and reduce individual investment risks. Representative projects include:

• Tangible: Tokenization of physical assets
• Landshare: Small investors participate in the real estate market
• PropChain: Global Real Estate Investment Platform
• RealT, RealtyX: Tokenization of fractional ownership in U.S. real estate

![RWA: A Look Back at Past Lives and Present, How Real Assets Rise?])https://img-cdn.gateio.im/webp-social/moments-297aef3c7e6b6b2834c847c099710ae3.webp###

( Fiat to Stablecoin

Stablecoins like USDT and USDC bring the value of fiat currencies into the blockchain, providing low volatility assets for the crypto market. However, they also face risks related to regulation, collateral, and liquidity.

![RWA: A Review of Past Lives and Present, How Real Assets Rise?])https://img-cdn.gateio.im/webp-social/moments-70754d7f939756056e230f2cd150a48f.webp###

( Lending Market

RWA has expanded the range of pledgeable assets, providing enterprises with more financing channels, and allowing ordinary investors to invest in enterprises to obtain returns.

![RWA: A Review of Past Lives and Present, How Real Assets Rise?])https://img-cdn.gateio.im/webp-social/moments-60252c447a35ae31e476434278e793b1.webp###

( bonds and securities

Need to align with real regulations. Representative projects:

• Maple Finance: On-chain creation and management of loan pools
• Securitize: Tokenized securities issuance and management services
• Ondo Finance: Tokenized Short-Term Treasury Fund

![RWA: A Review of Past Lives and the Present, How Real Assets Rise?])https://img-cdn.gateio.im/webp-social/moments-e2bbf309bcfa5a5d0809c3eb9f6c7e6f.webp###

3. RWA Market Size

The RWA market exploded in May 2023. As of now:

• RWA-related TVL reached $6.3 billion, a year-on-year increase of 6000%.
• 62,487 asset holders, 99 asset issuers
• The total value of stablecoins is 169 billion USD.
• The total market value is expected to reach 16 trillion dollars by 2030.

4. Major Projects of the RWA Ecosystem

( Centrifuge

On-chain tokenization platform for real assets, integrating DeFi lending protocols with real borrowers to achieve asset circulation.

• Financing 30.8 million USD
• A total of 1514 asset tokenizations have been completed, with total financing of 636M USD
• Core Architecture: Centrifuge Chain, Tinlake Protocol, On-chain NAV Calculation, Layered Investment Structure

![RWA: A Review of Past and Present, How Real Assets Rise?])https://img-cdn.gateio.im/webp-social/moments-e60f1c2c3a04c82bf561c0e8e7d3a58a.webp###

( ONDO Finance

Institutional-level financial agreements, focusing on the tokenization of U.S. Treasury bonds.

• Financing 34 million USD
• TVL 538.97m USD, RWA track ranks third
• Main Products: USDY) Dollar Yield Token ###, OUSG( Short-term US Treasury )

( BlackRock BUIDL

BlackRock and Securitize launch the first tokenized fund on Ethereum.

• Invest in cash equivalents, such as short-term U.S. Treasury bonds
• TVL stabilized at 502.41m USD, RWA TVL ranked fourth
• Better regulatory compliance

![RWA: A Review of Past Lives and Present, How Real Assets Rise?])https://img-cdn.gateio.im/webp-social/moments-444ff4b79e09be86d21635c1859ee1da.webp###

5. Conclusion

RWA aims to achieve interoperability between real-world assets and on-chain assets, blurring the boundaries between DeFi and traditional finance. It mainly involves sectors such as securities, real estate, credit lending, and stablecoins. Compared to other sectors, RWA faces stricter regulatory requirements. Although the prospects are broad, caution is still required to address potential risks when investing.