Real-world assets (RWAs) are crypto tokens that represent physical assets in the real world. These assets can include bonds, real estate, commodities, and machinery. RWAs bring these assets into the Decentralized Finance (DeFi) space, making them more accessible and opening up new opportunities.
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Understanding RWAs
RWAs represent valuable assets that everyone recognizes. Their value and ownership are accepted worldwide, making them suitable for transactions, investments, and other financial activities.
Bringing recognized assets onto the blockchain using RWAs is a significant innovation that is a central narrative in the 2024-2025 crypto season.
Tokenization allows these assets to exist as tokens on a blockchain, making it easy to buy, sell, or trade them online. This blend of traditional assets with digital technology aims to improve liquidity, accessibility, and transparency for buyers and asset owners.
Why RWA tokens are important
Traditional assets represent a significant portion of global financial value, and investing in them often requires a lot of money upfront. While available in various amounts, bonds usually need substantial investment, keeping many people out of the market. Restrictions based on country laws can further limit access to these assets, often leaving only wealthy individuals able to invest.
Real estate and commodities are difficult to convert quickly into cash. Selling these assets can take time and be complicated and frustrating for those who need liquidity quickly.
Crypto RWA tokens make it easier for people to invest by allowing fractional ownership. This means you can buy tokens representing parts of assets, like real estate or bonds. This access opens doors for many who might have found these markets too expensive.
Blockchain technology removes geographic and regulatory barriers. It allows people worldwide to invest in assets that may have been out of reach due to regional restrictions.
Finally, tokenization allows more people to invest in an inclusive asset ownership landscape. RWAs connect traditional finance with new digital opportunities, creating a fairer market for everyone.
Top 10 RWA coins by market cap
Real World Asset (RWA) tokens bridge the gap between traditional finance and blockchain technology by tokenizing physical assets. Below is a list of the top 10 RWA tokens by market capitalization:
Chainlink (LINK)
Chainlink is a decentralized oracle network that plays a pivotal role in the tokenization of real-world assets (RWAs). By securely bridging off-chain data to on-chain environments, Chainlink enables the representation of physical and traditional financial assets—such as currencies, commodities, equities, and bonds—as digital tokens on blockchain platforms.
This integration facilitates a more transparent, efficient, and accessible global financial system. Chainlink's infrastructure ensures that tokenized RWAs are enriched with real-world information, securely transferred across chains, and continuously updated, thereby maintaining their value and legitimacy in the on-chain ecosystem.
Mantra (OM)
MANTRA is a security-focused RWA Layer 1 blockchain designed for institutions and developers. It ensures compliance with real-world regulations. Built with the Cosmos SDK and secured by a sovereign PoS validator set, Mantra has built-in modules, SDKs, and APIs for managing regulatory-compliant RWAs.
Ondo Finance (ONDO)
Ondo Finance is a decentralized investment bank serving various stakeholders in the DeFi ecosystem, including DAOs, institutional investors, and retail customers. Ondo pioneers liquidity-as-a-service with partnerships with 10+ DAOs and commitments from stablecoin issuers (FEI, FRAX, UST, RAI), facilitating token trading on decentralized exchanges.
Algorand (ALGO)
Algorand is a blockchain platform designed to facilitate the tokenization of real-world assets (RWAs). Its Algorand Standard Assets (ASA) framework enables the creation and management of digital tokens representing various assets, including real estate, commodities, and intellectual property. Algorand's pure proof-of-stake consensus algorithm guarantees secure and efficient transaction processing, making it a solid foundation for RWA tokenization.
XDC Network (XDC)
XDC Network is an enterprise-grade Layer 1 blockchain designed to bridge the gap between traditional finance and decentralized technologies. It focuses on the tokenization of real-world assets (RWAs), enabling seamless integration of tangible assets like real estate, commodities, and financial instruments into the blockchain ecosystem.
The XDC Network offers fast transaction times, minimal fees, and interoperability with existing financial systems. Its environmentally friendly design and robust infrastructure make it a preferred choice for institutions aiming to tokenize assets efficiently and securely.
Quant (QNT)
London-based Quant Network is transforming blockchain technology with its Overledger operating system. This platform is the first interoperable blockchain OS, enabling the development of decentralized, multi-chain applications at scale. Overledger connects various networks to blockchains, ensuring users are not restricted to a single vendor or technology. It aims to fulfill the original vision of the Internet by creating a secure, open network for people, machines, and data.
Maker (MKR)
MakerDAO is an Ethereum-based protocol that enables collateral-backed loans without intermediaries. It has become a key player in the DeFi space, utilizing smart contracts to manage borrowing and lending. The protocol features two currencies, DAI and MKR, to help regulate loan values.
Pendle (PENDLE)
Pendle is a decentralized finance (DeFi) protocol that enables users to tokenize and trade future yields of various assets. In August 2023, Pendle expanded into real-world assets (RWA) by integrating MakerDAO's Boosted Dai Savings (sDAI) and Flux Finance's fUSDC stablecoin, both of which generate returns from traditional financial sectors. This move allows users to gain exposure to yields derived from real-world assets, bridging the gap between traditional finance and DeFi.
Reserve Rights (RSR)
Reserve Rights (RSR) is a dual-token platform aiming to provide a stable, decentralized currency in regions with high inflation. It utilizes the Reserve token (RSV) as a stablecoin and the Reserve Rights token (RSR) for governance and stability. RSR holders can vote on proposals and participate in maintaining the stability of RSV. The project focuses on financial inclusion, offering a reliable currency alternative. Reserve's approach aims to address economic challenges in developing countries.
Plume (PLUME)
Plume is a public Layer 1 blockchain optimized for the rapid adoption and integration of real-world assets (RWAs). It offers a composable, EVM-compatible environment for onboarding and managing diverse RWAs, enabling issuers to tokenize assets like real estate, commodities, and revenue streams. Plume's architecture includes components such as Arc, Smart Wallets, and Nexus, which work together to provide a streamlined and secure environment for managing assets, ensuring compliance, and facilitating data integration. Additionally, Plume has partnered with Google Cloud and AI firm CloudMile to enhance the onboarding process of RWAs using artificial intelligence and cloud technologies.
Which assets can be tokenized?
Real-world assets are quickly becoming a vital part of the crypto world. Here are some main uses for RWAs:
Bonds: RWA tokens let investors earn money from bond investments. Government bonds, such as US Treasury bills, back these tokens.
Real estate: Tokenized real estate allows people to invest in a portion of a property and earn rental income, making real estate investment more accessible to everyone.
Commodities: Tokenizing fine art allows people to own a fraction of a painting or sculpture and make money from it. This makes art investing easier for those who can't afford to buy an entire piece.
Equipment and machinery: Companies are considering tokenizing industrial equipment and machinery. This would allow for shared ownership and usage rights, helping to use these assets better.
How real-world assets are tokenized
Tokenization is turning real-world assets into digital tokens on the blockchain. Tokenizing a real-world asset involves several important steps:
Asset selection: The real-world asset is selected based on market sentiment, demand, or regulatory conditions.
Token standard and type: The token type—fungible (like currency) or non-fungible (like unique items)—and the token standard to use, such as ERC20, are chosen.
Blockchain selection: A public or private blockchain network can be used to issue the tokens.
Sync off-chain data: Most tokenized assets need reliable off-chain data from secure oracles. A service like a certified Proof of Reserve (PoR) verifies the assets backing the tokens, helping build trust with investors.
Token issuance: The smart contracts are deployed on the chosen network, and the tokens are minted and made available for use.
Benefits of tokenizing real-world assets
Tokenized assets offer improved liquidity, greater access, transparent on-chain management, and lower transactional friction than traditional assets.
For financial assets, tokenization streamlines distribution, trading, clearing, settlement, and safekeeping into one layer, reducing counterparty risk and enabling more efficient capital mobilization.
Challenges in tokenizing real-world assets
Tokenizing real-world assets (RWAs) offers benefits but also poses challenges. Regulatory differences across jurisdictions present significant concerns, requiring adherence to local laws.
Additionally, the security of digital assets is vital due to the risks of fraud and hacking, making robust custody solutions and security measures essential.
FAQ: RWA in Web3
What are real world assets (RWA)?
Real World Assets (RWAs) are physical or financial assets, like real estate, commodities, and bonds, that are tokenized on the blockchain. This allows for greater liquidity, fractional ownership, and global accessibility.
What is the top crypto real world asset RWA project?
Chainlink (LINK) is one of the leading RWA projects, providing secure oracle services to connect real-world data with blockchains. Other major RWA projects include Ondo Finance, MakerDAO, and Synthetix.
What is RWA in Web3?
RWA in Web3 refers to the tokenization of real-world assets on blockchain networks, enabling decentralized ownership, trading, and management. This bridges traditional finance with decentralized finance (DeFi).
What are real world assets in crypto real estate?
Real-world assets in crypto real estate are properties that have been tokenized on the blockchain, allowing for fractional ownership and on-chain transactions. Projects like Propy and RealT facilitate real estate investment through blockchain technology.
Which coin is RWA?
Several coins are classified as RWA tokens, including Chainlink (LINK), Maker (MKR), Ondo (ONDO), and Centrifuge (CFG), which focus on tokenizing and integrating real-world assets into DeFi.
Which crypto is backed by BlackRock?
BlackRock backs BUIDL, a tokenized money market fund launched on Ethereum in partnership with Securitize. It offers a stable yield through U.S. Treasury bonds.
What is Ondo Crypto?
Ondo Finance (ONDO) is a blockchain-based platform that tokenizes real-world financial assets like U.S. Treasury bonds and corporate debt, offering regulated on-chain investment opportunities.
