Source: Pintu

Over the past few weeks, real-world assets have been on the lips of every crypto expert. Now you might be wondering what they are. Sit tight as this article will satisfy your curiosity.

Real-world assets are digital assets representing tangible assets with intrinsic value, including commodities, natural resources, collectibles, and real estate. Real-world assets have intrinsic physical qualities that add to their value, unlike financial assets like stocks or bonds, which are based on contractual claims or ownership shares in businesses.

Real-world assets are digital assets representing physical real-world or off-chain assets after they’ve been tokenized. These assets are tokenized, hence stored on-chain but have underlying assets that they represent in the real world. Examples of real-world assets are real estate, precious metals (like gold, silver, platinum), valuable artworks, etc. These physical assets, after tokenization, act as synthetic assets and are used as a source of liquidity in DeFi activities.

The RWA market is currently valued at $7 billion, according to Coingecko.

Real-world assets can be broadly categorized into various types:

1. Real Estate: This covers land and development projects in addition to residential, business, and industrial assets. Real estate can be tokenized on the blockchain.

2. Commodities: Raw materials or basic agricultural goods are exchanged on commodity markets as commodities. Gold, silver, oil, natural gas, wheat, corn, and industrial metals (copper, aluminum) are a few examples of commodities. These commodities can be tokenized and traded as derivatives.

3. Collectibles: Tangible objects that are prized for their uniqueness, historical relevance, or visual appeal are known as collectibles. Art, antiques, rare coins, exquisite wine, vintage automobiles, and other priceless goods fall under this category. While the value of collectibles may be arbitrary and subject to market fluctuations, they can provide diversification advantages and the possibility of increase over time. Collectibles have been known to be tokenized and traded on the blockchain.

Real-World Asset Protocols

Synthetix: this is a protocol that specializes in issuing synthetic assets and real-world assets. With the aid of oracles, Synthetix tracks the real-time prices of the underlying assets.
Ondo Finance: This is a popular decentralized platform that enables tokenization and trading of real-world assets.
Centrifuge: Centrifuge is a protocol that allows for the tokenization of real-world assets while integrating decentralized finance.