Today, we’d like to chat about something that’s shaking up the blockchain world — Real World Assets, or RWA. What are they, why do we need them, how did they end up in the crypto spotlight, and how do you trade them seamlessly? Buckle up, and let’s dive in!
What’s the Deal with Real World Assets?
Real World Assets, or RWAs, are real, tangible things in the physical world, like real estate or commodities. But here’s the twist — in the crypto universe, we turn these things into digital tokens. It’s like turning your house or gold into something you can trade on the blockchain.
The estimated value of these tokenized real-world things is around $2 Billion. It’s a big deal because it means many people see the potential in using the blockchain to invest in everyday things like houses, bonds, and more.
Tokenizing Real Estate: A Simple Explanation
Let’s analyze RWAs with the example of real estate.
- Tokenization Process:
Imagine there’s a prime piece of real estate, such as a commercial property, that traditionally requires significant capital to purchase.
Instead of a single entity owning the entire property, it’s decided to tokenize the property. This involves breaking it down into smaller, tradable digital tokens on a blockchain.
2. Token Sale:
These digital tokens represent fractional ownership in the real estate asset. For simplicity, let’s say the property is divided into 1,000 tokens.
Investors can then participate in a token sale, where they purchase these digital tokens. Each token represents a percentage ownership of the real estate.
3. Smart Contracts:
Smart contracts, self-executing contracts with the terms of the agreement directly written into the code, are employed. These contracts automatically execute actions like distributing rental income or voting on property management decisions.
4. Earning Returns:
The property generates rental income from tenants. This income is then distributed proportionally to the token holders based on their ownership percentage.
Token holders effectively earn returns from the real estate investment without needing to own the entire property.
5. Liquidity and Trading:
Since these tokens are on a blockchain, they can be traded on decentralized exchanges and cross-chain aggregators like Rubic. This introduces liquidity, allowing investors to buy or sell their tokens at any time, providing flexibility.
6. Transparency and Security:
The blockchain ensures transparency in ownership and transactions. Every token transfer and income distribution is recorded on the blockchain, providing a secure and transparent record of ownership and activities.
In summary, the tokenization of real estate in this example allows investors to participate in a lucrative real estate venture with a lower barrier of entry. It also provides liquidity and transparency, offering a glimpse into how RWAs can revolutionize traditional investment avenues by leveraging the benefits of blockchain and decentralized finance.
Unlock Real World Assets with Rubic
With Rubic, you can seamlessly enter the world of RWA tokens from various networks including L2 chains. Check out the list of the most popular RWA tokens to discover exciting opportunities.
If you find something intriguing and decide to get into RWAs, it’s easy to swap your ETH, BTC, LTC, USDT, AVAX, and other coins from 30+ networks for the specific real-world asset you’re interested in. With Rubic, the process is smooth, allowing you to transition between different cryptocurrencies and RWAs effortlessly.
Please keep in mind that due to high gas fees on the Ethereum network right now, exchanging your assets for RWA might be expensive. To minimize the price impact on the Ethereum network, try swapping a larger amount of tokens at once. This approach helps mitigate potential fluctuations and ensures a smoother transaction process within the Ethereum ecosystem. Another option is to buy a desired RWA on another network. For example, you can find PENDLE, NXRA TRADE & other RWA tokens on multiple chains including Avalanche, Arbitrum, Optimism, BNB Chain, or Polygon. Rubic facilitates on-chain swaps with optimal rates by aggregating liquidity from over 200 DEXs. This aggregation ensures that you can execute your swaps with the best rates available, on Rubic.
Buying RWA in One Click with Rubic: Quick Guide
- Go to Rubic’s website.
- Choose the Source Chain and Token.
- Select the Target Chain and Desired RWA.
- Enter the Amount to Swap.
- Complete the Swap in One Click; Once you’ve filled in the details, simply click on the “Swap” button to initiate the transaction.
That’s it! Rubic streamlines the process, allowing you to buy Real World Assets in just one click.
Meet Some RWA Players
Bonds: RWA tokens can offer opportunities to earn yield through bond RWA tokens, which are backed by sovereign bonds like US Treasury bills and bonds. Tokenizing these bonds provides benefits such as increased transparency, liquidity, and fractional ownership, revolutionizing the bond market.
Real Estate: As we said before, tokenized real estate allows individuals to own fractions of properties and earn rental income. This democratizes real estate investing, making it accessible to a broader audience and leveraging blockchain advantages like transparency and fractional ownership.
Commodities: Tokenized fine art enables fractional ownership of paintings or sculptures, allowing individuals to earn income from their shares. This approach makes fine art investing more accessible, breaking down barriers for a wider range of investors.
Art and Collectibles: Platforms like Maecenas facilitate fractional ownership of artworks and collectables, transforming the way people invest in and appreciate art. This opens up new possibilities for art enthusiasts who may not have the means to acquire entire pieces.
Equipment and Machinery: Industrial equipment and machinery are now being explored for tokenization, enabling fractional ownership and usage rights. This innovation optimizes asset utilization and broadens investment opportunities in the industrial sector.
Let’s delve into a selection of Real World Assets Coins ranked by Market Capitalization.
All data being current as of December 25th, 2023:
Centrifuge (CFG) — Price $0.77
Centrifuge is a decentralized asset financing protocol. It connects DeFi with RWA while trying to lower the cost of capital for small and mid-size enterprises (SMEs) and provide investors with a stable source of income.
Polymesh (POLYX) — Price $0.197
Polymesh is an institutional-grade permissioned blockchain built specifically for regulated assets. It streamlines antiquated processes and opens the door to new financial instruments by solving challenges with public infrastructure around governance, identity, compliance, confidentiality, and settlement.
Creditcoin (CTC) — Price $0.47
Launched on 04/04/2019 by a team based in the US, Canada, South Korea, Nigeria, and Estonia, Creditcoin aims to address the lack of credit system among the unbanked in the emerging market.
CANTO (CANTO) — Price $0.25
Canto is an EVM-compatible Layer-1 blockchain with a core focus on making Decentralized Finance free to use. It forms part of the Cosmos (ATOM) ecosystem of interoperable chains and dApps.
Maple (MPL) — Price $15.02
Maple is a decentralized corporate credit market. Maple offers borrowers transparent and efficient financing completed entirely on-chain. For liquidity providers, Maple offers a sustainable yield source through lending to diversified pools of crypto’s premium institutions.
RWAs are the Future!
Real World Assets are shaking up how we see and use assets. As tech grows up and platforms like Rubic keep things smooth between blockchains, expect to see more of your favourite real-world things going digital. The future is exciting, crypto pals!