RWA: The Rise of Real Assets in the Blockchain World

1. Concept and Development of RWA

RWA stands for Real World Assets, referring to real-world assets that are represented and traded in a digital and tokenized manner within the blockchain ecosystem, including real estate, commodities, bonds, stocks, and artworks. The core of RWA is to use blockchain technology to bring traditional financial assets into the DeFi ecosystem, achieving more efficient, transparent, and secure asset management and trading.

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

The uniqueness of RWA lies in its role as a bridge between crypto-native assets and traditional assets. Crypto-native assets operate on the chain through smart contracts, adhering to the principle of "code is law"; while traditional assets are protected by the laws of the real world. RWA needs to meet both the technological support of smart contracts and the legal protection of the underlying assets in reality.

The development of RWA can be roughly divided into three stages:

• 2017-2019: Early exploration stage, pioneering projects such as Polymath and Harbor emerged.
• 2020-2022: Initial development phase, projects like Centrifuge and MakerDAO introduced RWA
• From 2023 to present: Rapid expansion phase, traditional financial institutions and governments begin to intervene.

2. Main Application Areas of RWA

RWA shows application potential in multiple fields:

Real estate: Improve property liquidity and reduce personal investment risk. Representative projects include Tangible, Landshare, etc.

Fiat-backed stablecoins: such as USDT, USDC, etc., provide low-volatility assets by being pegged to fiat currency.

Lending Market: Expand the range of collateralizable assets to provide more options for small and micro enterprises and individual investors.

Bonds and Securities: Projects such as Maple Finance, Securitize, etc., are dedicated to achieving on-chain issuance and trading of bond securities.

3. RWA Market Size

The RWA market experienced a boom in May 2023, with a current TVL of $6.3 billion, a year-on-year increase of 6000%. According to data from RWA.xyz, there are as many as 62,487 holders of RWA-related assets, with 99 asset issuers and a total value of stablecoins at $169 billion.

Institutions like Binance predict that the total market value of RWA could reach $16 trillion by 2030. As an emerging sector, RWA is strongly changing the DeFi market, but its development is closely related to regulations in various countries.

4. Representative Projects of RWA Ecosystem

Centrifuge

Centrifuge is a platform for tokenizing real-world assets on the blockchain, providing a decentralized asset financing protocol. Its core architecture includes Centrifuge Chain, Tinlake protocol, on-chain NAV calculation, and a tiered investment structure.

The project has received multiple rounds of financing, but recent core data such as TVL has seen a decline.

ONDO Finance

ONDO Finance is committed to providing institutional-level financial products, with main products including USDY and OUSG. USDY is a US dollar yield token, and OUSG is a short-term US government bond token.

The project financing situation is good, with a TVL of 538.97m USD, ranking third in the RWA sector.

BlackRock BUIDL

The ETF launched by BlackRock and Securitize invests in short-term US Treasury bonds and other cash equivalents. The project has a relatively complete compliance aspect, is highly recognized in the market, and its TVL remains stable at 502.41m USD.

5. Summary

The fundamental purpose of RWA is to achieve the interoperability between real-world assets and on-chain assets, blurring the boundaries between DeFi and traditional finance. The main sectors include securities, real estate, credit lending, stablecoins, and more.

Compared to other sectors, RWA is subject to stricter regulations and has high compliance requirements. Although the prospects are broad, caution is still needed when investing in related projects, and attention should be paid to risks.