When we talk about Real World Assets (RWA) tokenization, we trace it down to Fiat-backed Stablecoins, with Tether leading the way. The presence of these Fiat-backed Stablecoins not only helped to stabilize the crypto market but also opened the door for diverse varieties of Real World Assets. Today, we have seen other real-world assets such as commodity-backed tokens and Tokenized Treasury products.

What are Real World Assets?

Real World Assets refer to the tokenization of physical assets; an approach that replicates physical assets on-chain. Projects that offer this use case stand as the intermediary between the issuers and consumers ( Investors/users ). Some institutions also offer RWA directly.

RWA adoption is increasing, especially because most of them have regulatory backups. The report gathered has shown that USD-backed Stablecoin accounts for 99% of stablecoins, Tokenized Treasury products have grown 782% in 2023, and commodity-backed Tokens have seen a massive $1.1B in market capitalization. The real estate sector is another RWA sector that is gaining a lot of traction.

If you look back to the early days of Blockchain and Cryptocurrency, and the attacks that were given on them, you will agree with me that there has been a massive improvement.

Why is RWA Relevant in the Blockchain Sector?

Firstly, it provides fractional ownership, allowing individuals to invest in assets they may not have been able to access otherwise. For example, XAUT which is tokenized Gold. Many individuals may not easily access physical Gold. With tokenization, interested individuals can access it wherever they are. They also need not worry about the Security of the asset against theft, as they are intangible. They only need to keep their logins/private keys safe. No one knows they have such an asset.

Secondly, it increases liquidity as it will be available to a wider audience. Enabling assets to be traded on blockchain platforms, potentially reduces the time and cost associated with traditional asset transactions.

Additionally, it enhances transparency and security through blockchain's immutable ledger system, thereby building trust among investors. Overall, Real World Asset tokenization has the potential to revolutionize traditional asset markets by making them more accessible, efficient, and transparent...