Real-World Assets (RWAs) in Crypto & DeFi

• RWAs facilitate a way to provide blockchain technology for financial profits.

• RWAs are tangible and have a physical world existence

• RWAs leverage rights to attain unique ownership of a physical asset.

Real-world assets (RWAs) are the physical entities that account for a combined value of over 300 trillion dollars. RWAs facilitate the generation of profits in decentralized finance (DeFi). These assets are directly connected with real-world value.

Understanding Real-World Assets in Crypto

RWA is an asset in the world of crypto that actually has a tangible existence in the real physical world. RWA can be split into two types, fungible and non-fungible. Fungible assets can be exchanged, which means that one unit can be exchanged for another.

Non-fungible assets have a certain uniqueness about them as they are not interchangeable. Each unit is discrete from another and is associated with a different physical asset. Non-fungible assets can’t be interchanged for one another. They represent ownership rights to a particular physical or digital asset, such as collectibles, artwork, or music.

RWA use in DeFi can be a means of generating lucrative yields, which can benefit the fiat as well as cryptocurrency. Yield sources that are sustainable are worth investing in, as they can be more stable by nature and have predictable returns. RWAs in Defi are also utilized in order to diversify portfolios.

Defi use cases in RWAs have the potential to open new opportunities for investments. RWA tokenization in DeFi leverages new and enticing ways for people to get accustomed to their physical assets, including community building along with gamification.

Real World Assets NFTs and Projects

RWA can be utilized as a collateral or debt instrument and is used for lending and borrowing purposes. Lending platforms facilitate users to borrow or lend crypto or fiat currencies at non-constant or fixed interest rates. Users are allowed to plow their tokenized real estate or collateral and borrow stablecoins.

Trading and investing can also be attained with the help of RWA. RWA can act as a tool on an exchange platform. It is also possible to invest in a tokenized index that stimulates the performance of a collection of RWAs effectively.

Unikura: Out of the multiple RWA projects in the DFI realm, the Unikura marketplace stands out. For Web3 specifically, it collaborates collectors worldwide with various collectibles from Japan, such as manga books. Unikura potentially drives NFTs power to create digital provenance for collectibles. It also secures storage and validates solutions. 

Centrifuge: Centrifuge is a protocol that empowers asset originators to attain liquidity from DeFi by monetizing or tokenizing their RWAs. Users can also get the leverage of a two-token system. Basically, users can directly invest in these tokens with the use of stablecoins such as Dai or USDC.

Conclusion

RWA tokenization of real-world physical assets has brought them on-chain and has driven more innovations within both the crypto space and traditional finance systems. However, RWA still faces challenges such as scalability, legal enforceability, and trust issues.