RWA: From Traceability to Ecology, How Do Real World Assets Rise?

1. Overview of RWA

RWA(Real World Assets) refers 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, etc. The core concept of RWA is to bring traditional financial assets into the decentralized finance(DeFi) ecosystem through blockchain technology, achieving more efficient, transparent, and secure asset management and trading.

The significance of RWA lies in enabling the liquidity of illiquid assets in the real world through blockchain technology, allowing participation in the DeFi ecosystem for lending, staking, trading, and other operations. This method of connecting real assets with the blockchain world 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 are realized through smart contracts, adhering to the principle of "code is law"; while traditional assets such as bonds, stocks, and real estate operate within the legal framework of the real world. The tokenization rules of RWA require both on-chain technical support and the protection of underlying assets by real-world laws.

2. Development History of RWA

The development of RWA can be divided into three stages:

Early exploration stage ( 2017-2019 ):

• In 2017, the concept of RWA began to take root, and some projects explored security tokenization.
• In 2018, pilot projects for real estate tokenization emerged.
• In 2019, the TAC Alliance was established to promote the standardization of RWA.

Initial development stage ( 2020-2022 ):

• In 2020, multiple DeFi projects introduced RWA as collateral.
• In 2021, MakerDAO integrated RWA as collateral.
• In 2022, traditional financial institutions began to lay out plans for RWA.

Rapid Expansion Phase (2023 to present ):

• Large asset management companies are attempting to manage part of their asset portfolio through tokenization.
• Regulatory authorities are beginning to intervene and establish a regulatory framework related to RWA.

3. Main Application Areas of RWA

RWA shows application potential in multiple fields, mainly including:

Real estate industry:

• Improve real estate liquidity, reduce individual investment risks
• Represents projects: Tangible, Landshare, PropChain, etc.

Fiat to stablecoin:

• Introduce fiat currency into the blockchain in the form of stablecoins
• Representing projects: USDT, USDC, etc.

Lending Market:

• Expand the range of pledgeable assets to provide more financing channels for enterprises.
• Represents projects: Maker, Aave, etc.

Bonds and Securities:

• Improve the efficiency of bond and security issuance and trading
• Representative projects: Maple Finance, Securitize, Ondo Finance, etc.

4. RWA Market Size

The RWA market experienced explosive growth in May 2023:

• The current RWA-related TVL has reached 6.3 billion USD, a year-on-year increase of 6000%.
• Over 60,000 RWA asset holders and nearly 100 asset issuers.
• The total value of stablecoins has reached $169 billion.
• Multiple institutions predict that the total market value of RWA could reach 16 trillion USD by 2030.

5. RWA Ecological Development

With the entry of traditional capital and Web3 giants, a number of strong projects have emerged in the RWA ecosystem:

Centrifuge:

• On-chain tokenization platform for real assets
• Total financing amount of 30.8 million USD, TVL nearly 500 million USD
• The core architecture includes Centrifuge Chain, Tinlake, etc.

Ondo Finance:

• Institutional-grade financial agreements focusing on stable asset tokenization
• Total financing amount of 34 million USD, TVL exceeds 500 million USD
• Main products include USDY, OUSG, etc.

BlackRock BUIDL:

• The first tokenized ETF fund on Ethereum
• Launched in collaboration with Securitize by BlackRock
• TVL remains stable at around 500 million USD

6. Summary

The RWA track is rapidly developing but still faces challenges such as regulation. When investing in related projects, one should remain cautious and pay attention to compliance and potential risks.