Real World Assets (RWA) are tokens that can represent real assets and be traded on the blockchain. They facilitate efficient circulation of assets and create new asset categories.
Market Overview:
RWA Data Review for the Week:
Market Data Review:
BTC: Liquidation Intensity Index from 2024/01/01 to present.
ETH: Liquidation Intensity Index from 2024/01/01 to present.
Market Hotspots and Financing for RWAs:
Securitize secures $47 million financing led by Blackrock and other traditional financial giants.
Instant delivery of national debt RWA products, available for 24/7/365 subscription and redemption.
National debt RWA players collectively participate in asset allocation bidding on Arbitrum.
Stellar network supports financial giant WisdomTree’s application.
Mastercard, Citibank, and JPMorgan test ledger for settlement of bank funds.
Agricultural tokenization platform AgriDex secures $5 million financing.
Real estate tokenization platform Homium secures $10 million financing.
In essence, RWA brings all real-world assets to the blockchain to facilitate efficient circulation and create new asset categories. The Bank for International Settlements (BIS) explicitly states that “all assets will be tokenized in the future, and Finternet based on blockchain will be the future of the financial system” (while we recognize the future of tokenization, we do not endorse BIS’s path).
The narrative of RWA has transcended the definition given by the crypto market, and it should be much more and beyond.
To understand RWA, one needs to integrate the knowledge and operational practices of both traditional finance and crypto finance, and respect, learn, and deeply understand the market. The market is the real teacher, not the opinions of so-called experts who don’t understand it.
The total value of tokenized RWA categories reached $1.28 billion, an increase of 0.63% compared to the previous month.
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Top four category market shares:
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Global USD liquidity continues to decline without showing an upward trend.
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Market Hotspots and Financing for RWAs:
On May 1st, Securitize, which recently helped Blackrock tokenize the US Treasury bond fund BUIDL, announced the successful completion of a $47 million financing round led by Blackrock. The strategic investment also includes participation from Hamilton Lane, ParaFi Capital, Tradeweb Markets, Aptos, Circle, and Paxos.
Securitize will use the proceeds from this round of financing to accelerate product development, expand its global footprint, and further strengthen its partnerships in the financial services ecosystem.
This investment highlights Securitize’s pioneering efforts in using blockchain technology to digitize the capital market. The funding will drive Securitize’s continued innovation and expansion, further solidifying its position as a leader in the digital asset securities ecosystem.
Carlos Domingo, Co-founder and CEO of Securitize, said, “We are thrilled to have the support of such outstanding investors as we continue to drive the digitalization of capital markets through tokenization. Overall, the future of finance, especially tokenization, is full of hope.”
“At Blackrock, we believe tokenization has the potential to drive a significant transformation of the capital market infrastructure. Our investment in Securitize is another step in the development of our digital asset strategy,” said Joseph Chalom. “We are excited to lead this round of investment along with other participants and help foster innovation to meet the future needs of our clients.”
Hamilton Lane CEO commented, “Hamilton Lane has a long history with Securitize, dating back to our collaboration in 2022, which allowed us to use our advanced credit opportunity funds (SCOPE) and our equity opportunity fund V. We are committed to enabling broader access to private markets for investors, including through token-based technologies. Securitize remains a leader in the field, and we are excited about this investment and look forward to future collaboration.”
Ben Forman, Founder and Managing Partner of ParaFi, said, “Securitize has built cutting-edge infrastructure that allows traditional assets to move onto the blockchain in a fast and modern way, enabling greater transparency, instant settlement, reduced counterparty risk, and increased programmability. At ParaFi, we have made extensive investments in digital assets and tokenization infrastructure, and we’re excited to work with Carlos and the Securitize team to realize this future vision.”
Just weeks after the collaboration between BlackRock and Securitize to launch the tokenized US Treasury bond fund $BUIDL, which integrated with Circle’s $USDC for instant minting and redemption of $BUIDL, opening up a beautiful new world for RWA to enter DeFi.
On May 3rd, Ondo Finance announced the launch of instant subscription and redemption for its $OUSG product, greatly improving capital efficiency compared to the previous T+N subscription/redemption. On March 27th, $OUSG purchased $95 million of $BUIDL, becoming its largest holder, accounting for approximately 23% of the total supply. This announcement is notable but not surprising.
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Unlike the significant advantages brought by the combination of $OUSG and $BUIDL, Mountain Protocol’s $USDM still relies on the liquidity mechanism built within the protocol for $USDC’s subscription/redemption liquidity. This liquidity mechanism is more limited, and once the liquidity of $USDC within the protocol is exhausted, it reverts to the previous T+2 working day process.
We can see that the future of national debt RWA products will fully implement 24/7/365 instant subscription and redemption, which truly embodies the unique value proposition of tokenized assets, allowing investors to participate in instant liquidity even on Saturday nights.
In the public solicitation that ended this Sunday, almost all national debt RWA players submitted the Stablecoin Treasury Enhancement Program (STEP) to Arbitrum. This program aims to distribute $35 million worth of ARB (approximately $37 million) from the DAO treasury to RWA products.
The players who submitted proposals include well-known RWA protocols such as Centrifuge, Ondo, Matrixdock, LibreCapital, Mountain Protocol, OpenEden, Frax, Backed, Ethena, Dinari, Superstate, Midas, and DigiFT.
Surprisingly, traditional financial giants BlackRock & Securitize’s $BUIDL and Franklin Templeton’s $FOBXX also submitted applications. Their applications raise the question of how heavily regulated financial institutions can compliantly provide services to decentralized organizations with non-traditional funding sources.
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MakerDAO is the first DAO to successfully achieve financial diversification through RWA, which has inspired several other DAOs to explore RWA products.
Centrifuge is a leading player in the private lending field of RWA and has helped MakerDAO, AAVE, Gnosis DAO, and FRAX invest in RWA through its Centrifuge Prime product.
On May 1st, the Stellar blockchain network, which focuses on financial applications, supported WisdomTree’s retail financial application called WisdomTree Prime, which is available to users in 41 states covering 75% of the US population.
WisdomTree manages $100 billion in assets and launched the BTC ETF called BTCW in January of this year, coinciding with Blackrock.
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With the support of the Stellar network, users can trade 13 digital funds and tokenized gold products through WisdomTree Prime, a retail financial application that uses a wallet supporting Stellar. By combining savings, spending, and investment, the application brings tokenization closer to the center of consumers’ financial lives and allows them to benefit from the advantages of blockchain-native platforms, including 24/7 trading of certain assets.
After researching tokenization platforms, WisdomTree chose the Stellar network as its blockchain choice due to factors such as Stellar’s asset control, relatively low costs, and operational efficiency. Stellar is the place where the blockchain meets the real world, and WisdomTree’s choice of Stellar helps bring tokenization into the mainstream.
Stellar is also the applicable network for the largest tokenized US Treasury bond fund, Franklin OnChain U.S. Government Money Fund. According to RWA.xyz data, as of May 10th, the fund’s total value locked (TVL) reached $367 million, second only to Blackrock’s BUIDL fund with a TVL of $382 million.
On May 8th, ten global financial institutions announced a collaboration to pilot tokenized deposits, wholesale central bank digital currency, US Treasury bonds, and other assets.
Participants include Mastercard, Citigroup, JPMorgan, US Bancorp, Wells Fargo, Visa, Swift, TD Bank NA, and Zions Bancorp. These participants will conduct transactions on the Regulated Settlement Network (RSN), a shared ledger focused on optimizing interoperability and reducing cross-registration information. The shared ledger technology has the potential to greatly change the way the financial industry operates today.
Currently, commercial bank funds, wholesale central bank funds, and investment-grade securities are stored on separate registries. However, once these assets transition to tokens executed on a distributed ledger, they can be settled on the same registry.
Connecting large financial institutions through a shared ledger is not a new concept. Similar shared ledger initiatives have been proposed, such as BIS’s Unified Ledger, the Hong Kong Monetary Authority’s mBridge project, and the Monetary Authority of Singapore’s Global Layer 1.
So far, all shared ledgers have been implemented as private and permissioned blockchains. On Tuesday at the BIS Innovation Summit, Umar Farooq, CEO of JPMorgan Onyx, said that only private blockchains can meet the demands of large financial institutions.
“If you look at public blockchain ledgers, you will find that they are not suitable for large transactions today. If there is a $100 million transaction, once there is a problem, you cannot turn to validators or anyone else. Who should I sue? You need to find a place where people can conduct trusted transactions between financial institutions and take some responsibility in the system.”
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On May 9th, AgriDex, an agricultural tokenization platform based on Solana, raised $5 million in its seed round. This equity financing round values the company at $18 million. The round was led by Endeavor Ventures, with participation from African Crops, Oldenburg Vineyards, and former executives from Goldman Sachs and Citadel, Hank Oberoi.
AgriDex is a Solana-based platform that targets the global agricultural market and allows for the tokenization and trading of agricultural products. Each transaction on AgriDex is represented by the minting of non-fungible tokens (NFTs), which permanently record all product, pricing, payment, and other detailed information.
AgriDex aims to help investors, farmers, and governments save costs and increase profitability. Co-founder Duckworth stated, “AgriDex has the potential to save stakeholders billions of dollars annually, and we have just scratched the surface. AgriDex will start by tokenizing and listing commodities such as sugar, grains, and cocoa, and plans to support more commodities through new partnerships and investments in the future.”
Duckworth added, “AgriDex is expected to launch its platform and token $AGRI in Q3 of this year, which will incentivize and reward users based on trading volume, platform participation, and community involvement. AgriDex plans to airdrop tokens to its community in the coming months and intends to repurchase and burn 50% of the profits.”
AgriDex, headquartered in London, has nearly 20 employees and plans to expand the team as needed.
On April 16th, real estate equity mortgage lender and securitization platform Homium announced a $10 million financing round and launched its first home equity loan on Avalanche. This financing round was led by Sorenson Impact Group and Avalanche’s ecosystem fund Blizzard.
Homium’s loans are currently implemented in Colorado and plans to expand to other states. As an incentive for borrowers, homeowners commit to sharing in the appreciation of home prices. For investors, they receive a tokenized asset that tracks the price appreciation of the shared appreciation housing loan pool issued on Homium.
The purpose of this move is to help unlock trapped home equity and address housing affordability issues in various situations. Homium also offers investable assets to institutional investors through digitally supported securities backed by real estate equity.
Homium CEO stated, “Homium is building a valuable new asset class for institutional investors, providing them with a new, inflation-resistant source of returns for their core investment portfolios.”
Avalanche purchased $50 million worth of tokenized assets built on its Layer 1 in July of last year, including equities, credit, real estate, and commodities.
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