Real World Assets (RWA) - A $10 trillion dollar Crypto Narrative

Kierin | Onchain_Edge 

I'm thrilled to dive into this newsletter's fascinating Real-World Assets (RWA) narrative. As we witness this sector rapidly expanding, it's crucial to understand its potential and the promising projects shaping its future.

From Niche to Mainstream: The Growth of RWAs in DeFi

Rewind to 2020: DeFi's Total Value Locked (TVL) was just $0.5 billion.

Fast forward to the 2021 bull run peak, and we saw an explosive growth to $177 billion — a 354x increase!

The evolving RWA landscape in web3 might be set for a similar trajectory.

Today, the RWA Crypto TVL is at $5.5bn.

However, I expect the RWA TVL to grow by at least 350x to $2T by 2030. Roland Berger expects a 1’250x growth by 2030.

Bridging Tangible Assets with Crypto

Imagine transforming tangible assets like your favorite painting or the building down the street into digital tokens.

This concept is not just a vision; it's becoming a reality, connecting physical assets to Web3.

The Staggering Market Potential of RWAs

The scale of the real-world assets market is mind-boggling. Just look at these valuations:

• Real Estate: $337 trillion

• Digital Bonds: $314 trillion

• Investment Funds: $155 trillion

• Public Equity: $123 trillion

Case Studies of RWA Protocols

stUSDT: Bridging TradFi and Crypto With $2.28 billion in RWA TVL, stUSDT is pioneering RWA tokenization on the TRON network, offering up to 4.7% APY on USDT staking. It excels in providing high liquidity for tokenized RWAs, emphasizing simplicity, security, and transparency. The platform focuses on high-grade short-term government bonds, enhancing RWA investment opportunities on TRON and Ethereum networks.

Ondo Finance: Investing in the Future Ondo Finance is crafting a new financial infrastructure on the blockchain, offering high-yield products like USDY, OUSG, and OMMF with an approximate 4.5% APY. It invests in top-tier exchange-traded funds backed by regulated service providers and robust security measures. This approach marries the stability of traditional finance with blockchain — innovation.

MakerDAO: Leading with Innovation, MakerDAO, the creator of the DAI stablecoin, has firmly established itself in the DeFi space. It's governed by MKR token holders who manage the smart contracts of the Maker Protocol. MakerDAO's focus on RWAs has paid off, generating substantial fee revenue and investing in a diversified asset portfolio to secure its future. Its recent financial performance and strategic investments highlight its potential to outperform in the market.

From a technical analysis perspective, the MKR/ETH ratio indicates strong potential, particularly for investments aiming to outperform ETH.

RWA APYs and Market Trends

Maple Finance's lending pools are a prime example of the varied APYs in this space:

• Cash Management: 4.75% APY

• Secured Digital Asset Lending: 8.39% APY

• Real-World Assets Lending: 6.00% APY

• Receivables Financing: 14.01% APY

Dive Deeper into RWA Projects

For those eager to explore more, check out CoinGecko's RWA category and delve into Ardizor's Twitter thread for a brief overview of some good RWA low-cap projects.

Tokenized RWAs is the Future

As we witness the merger of RWAs and cryptocurrency, we're clearly on the cusp of a financial revolution. The potential for growth and innovation is enormous, and I can't wait to see what the future holds.

Cheers,

Kierin | Onchain_Edge