Real World Assets (RWA) are real-world assets digitized on the blockchain platform, creating a bridge between traditional financial markets and cryptocurrency. This is a trend attracting significant attention from large financial institutions and has potential for sustainable growth in the future.
RWA includes tangible or intangible assets such as real estate, treasury bonds, copyrights, etc., that are Tokenized to increase liquidity and access for small investors in the Web3 market. Focusing on real value and practical applications, RWA opens up new opportunities for DeFi development.
- RWA is an important trend helping connect real assets with the cryptocurrency market, with participation from many large organizations.
- The RWA segment currently accounts for less than 1% of the crypto market capitalization but has enormous growth potential, especially in Tokenized Treasuries and Private Credit.
- Choosing RWA projects with real products and practical applications is essential for effective investment, with $ONDO being a typical example.
The Formation of RWA and Its Applications
RWA is defined as real, tangible or intangible assets, digitized in Token form on blockchain to increase liquidity and expand the investment market. By 2020, this term became prominent when used to distinguish from purely digital cryptocurrencies.
This is a field with participation from major financial players like Goldman Sachs, JP Morgan, BlackRock, helping to introduce financial products such as digital bonds, real estate Tokenization, expanding capital flow from traditional finance to Web3.
"Tokenizing real assets not only increases liquidity but also opens a new era in financial transactions, connecting traditional markets with blockchain technology."
Michael Novogratz, CEO Galaxy Digital, 2023
From the altcoin investment fund collapses in 2022 like 3AC, FTX, the RWA trend is seen as a solution to minimize systemic risks by linking to real assets. Smart contracts play a crucial role in guaranteeing and managing RWA Tokens on the blockchain.
Market Share and Future Potential of RWA in the Web3 World
Currently, the market capitalization of RWA projects in the crypto market is around 8 billion USD, accounting for less than 1% of the total market capitalization of 2,410 billion USD. However, the Tokenized Treasury bond segment has grown over 780% in 2023, led by Franklin Templeton.
Many large banks and investment funds like BlackRock, Santander Bank are participating in this field, affirming the strong development potential of RWAs in the context of global asset values reaching hundreds of trillions of USD.
Private Credit is the largest segment with 9 billion USD, increasing 9 times since 2022, accounting for 70% of the total RWA market share on Web3, mostly concentrated in the Figure project with blockchain technology applications in real estate mortgage lending.
"Tokenization helps transform traditional assets into flexible financial products, increasing transparency and capital access for small investors."
Joe Lubin, Co-founder of Ethereum, 2023
The Tokenized Treasuries segment is growing due to reduced transaction costs, increased liquidity, and expanded access to small investors. $ONDO is a leading project with yields up to 505%, attracting significant interest.
An In-Depth Perspective on RWA
RWA is a promising field in crypto due to its high practical application potential and focus on traditional value investors. Although developing slowly, this segment shows stable and sustainable growth, avoiding price "bubbles" like purely speculative projects.
Choosing the right RWA project with real products and clear economic applications is a decisive factor for success. Tokens without practical products will find it difficult to compete with leading projects with solid foundations.
Investing in RWA projects must be based on products with real value, growing through actual usage needs and real income.
Allinstation, Cryptocurrency Market Research Expert, 2024
Summary
RWA marks a step forward in integrating real assets into the cryptocurrency market, attracting attention from major investors and traditional institutions. With Tokenized products of real value like $ONDO, this is a field with potential for sustainable growth but requires investors to understand and carefully select projects for investment decisions.
Frequently Asked Questions
What is RWA and why is it important?
RWA is a real asset Tokenized on blockchain, helping connect traditional financial markets with cryptocurrency, increasing liquidity and expanding investment opportunities.
What is the potential development of RWA in the future?
Currently small in market cap, but RWAs are attracting many large institutions and growing rapidly in Treasury bond and private credit Tokenization, promising large development space.
Which RWA projects are prominent now?
$ONDO is a typical example with yields up to 505%, focusing on Tokenized Treasury bond products, attracting many investors.
What should be considered when investing in RWA?
Priority should be given to projects with real, transparent products and clear applications to ensure sustainable price appreciation, avoiding risks from purely speculative Tokens.
How does RWA affect the cryptocurrency market?
RWA expands the ability to connect with real assets, helping attract large capital from traditional markets, creating more stable and sustainable development for the cryptocurrency market.
