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Blogs > Analysis > Revolutionizing DeFi: How RWA Crypto is Transforming Real-World Asset Integration >

Revolutionizing DeFi: How RWA Crypto is Transforming Real-World Asset Integration

Author: Kenny Date: 2024-03-31 04:21:48

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Despite the continuous scrutiny over RWA (Real-World Assets) as traditional narratives adapt to new market cycles, there has been an unwavering influx of institutions embracing RWA crypto from the onset of this year, adding foundational support to this sector. The rising trend in RWA crypto tokens has undeniably cast a spotlight on the crypto market, which has otherwise been experiencing a dull phase.

PhemexPulse is a social trading platform within the Phemex ecosystem, launched in early March 2024, designed to connect and reward the cryptocurrency community for engagement and participation. Many groups are discussing the trends facing the RWA market and potential opportunities to profit from this narrative.

Since the year kicked off, leading entities including Binance, Goldman Sachs, Hamilton Lane, and Siemens, alongside a strategic focus on certain U.S. Treasury protocols on-chain, have spotlighted RWA crypto. A pivotal reason for the surge in on-chain bonds is the bear market's inability to fulfill the profit expectations of crypto enthusiasts with DeFi's low yields. With the Federal Reserve's interest rate hikes, on-chain U.S. Treasuries have emerged as a lucrative opportunity for crypto investors. Subsequent to regulatory pressures by the U.S. SEC and moves by TradFi institutions like BlackRock's bid for a Bitcoin spot ETF, the RWA crypto sector is poised for another growth spurt within a regulatory-friendly environment. Recent noteworthy developments in the RWA crypto domain include:

  • Compound's founder launching "Superstate," aimed at tokenizing U.S. Treasuries on Ethereum.
  • MakerDAO's acquisition of $700 million in U.S. Treasuries and an increase in the short-term U.S. Treasury investment ceiling to $1.28 billion.
  • A significant entry by the national team: Bank of China International, through UBS, issued $200 million in digital notes for the Hong Kong market. This pioneering product, tokenized on the Ethereum blockchain, complies with both Hong Kong and Swiss laws.

The shift in the Hong Kong Securities and Futures Commission (SFC)'s stance towards RWA crypto assets is notable. In a discussion with Eliptic, Elizabeth Wong, the FinTech Group leader, mentioned that the SFC is set to update its policy, treating Securities Token or RWA crypto as non-complex products, potentially opening them to retail investors, with regulation based on the underlying assets.

Sun Yuchen has also been actively participating in the RWA crypto scene. On July 4, the TRON ecosystem unveiled the RWA stable pledge product stUSDT, enabling users to stake USDT for RWA rewards.

After initial preparations at the year's start and enduring support from traditional DeFi protocols and national teams, the secondary market for RWA crypto responded positively, with significant price surges in tokens like MRK and COMP. Moreover, the crypto community's earlier skepticism towards RWA crypto appears to be diminishing. A common sentiment is the missed opportunity similar to the initial skepticism towards DeFi in 2020, which later proved to be a wave of innovation. Despite RWA's broad definition, its development landscape remains somewhat ambiguous. We revisit the RWA section on the crypto data platform RootData to examine the advancements of leading projects and the promising aspects of early-stage projects in the RWA crypto sphere.

CoinMarketCap data shows that the total market capitalization of RWA crypto concept tokens now surpasses $2 billion. While established DeFi projects maintain their standing, many RWA crypto initiatives are still in nascent stages. This review organizes the foremost projects across various sub-sectors, providing insights into their progress or forthcoming plans in RWA crypto strategies during this period of sustained interest. Notably, the market value of the top 10 RWA crypto concept tokens has soared over the past month, with Compound registering the most significant increase of over 100%.

Some Top RWA Crypto Coins:

On-Chain U.S. Treasuries

  • MakerDAO (MKR): As a trailblazer in the DeFi sector, MakerDAO has effectively harnessed its DAI stablecoin to become a stalwart in the RWA crypto market. Early recognition of the value RWAs could bring to DeFi led MakerDAO to pioneer their use as collateral, encompassing tokenized real estate and invoices, thereby facilitating DAI issuance. This initiative evolved into incorporating U.S. Treasuries as collateral, a significant leap towards creating more stable and dependable financial products within the RWA crypto framework. In a strategic move to solidify its standing in the RWA crypto domain, MakerDAO launched a collaboration with Coinbase Custody, earmarking up to $500 million in USDC stablecoins. This collaboration further amplified its investment in U.S. Treasuries, pushing its portfolio beyond the $1.2 billion mark. Such strategic diversification into Treasuries and investment-grade bonds significantly boosted MakerDAO's RWA crypto revenue, showcasing a notable uplift in profits and the DAI deposit rate within the RWA crypto ecosystem.
  • Compound (COMP): Compound's foray into the RWA crypto realm was marked by the announcement of Superstate, an ambitious new venture dedicated to investing in government-backed securities, including U.S. Treasuries, within the RWA crypto space. This move, highlighted by a seed funding round for Superstate, underscores Compound's commitment to exploring the stable and secure investment avenues RWA crypto offers, albeit still at a nascent stage of development and application within the RWA crypto sector.
  • Aave (AAVE): In the footsteps of MakerDAO, Aave ventured into the RWA crypto market by launching its RWA crypto market, enabling the use of real-world assets as collateral for borrowing. Through a partnership with Centrifuge, Aave established a platform that allows users to gain returns on real-world collateral, positioning asset originators to secure funding within the RWA crypto landscape. With the introduction of its native stablecoin, GHO, Aave is broadening its horizons, offering users a plethora of diverse and secure investment opportunities in the burgeoning field of RWA crypto.
  • Ondo Finance (ONDO): Rooted in both traditional finance and DeFi, Ondo Finance has rapidly carved a niche for itself by introducing tokenized funds, permitting stablecoin holders to invest in bonds and U.S. Treasuries within the RWA crypto framework. By offering a suite of investment funds classified as RWAs, Ondo Finance has played a pivotal role in bridging access to conventional financial instruments with the DeFi space, underscoring its innovative approach to RWA crypto. Furthermore, through its decentralized lending platform, Flux Finance, Ondo Finance has seamlessly integrated RWAs into its ecosystem, offering users novel avenues to invest and reap returns in the RWA crypto domain.

Lending

  • Centrifuge (CFG): Centrifuge emerges as an early adopter and a pivotal platform in the DeFi sector, focusing on RWA crypto. It supports top protocols like MakerDAO and Aave in their RWA crypto initiatives, boasting 17 RWA crypto asset pools. Centrifuge's role in the RWA crypto ecosystem was underscored by its collaboration on a $220 million RWA crypto vault with MakerDAO, elevating its Total Value Locked (TVL) significantly. The introduction of Centrifuge Prime marks a strategic expansion in the RWA crypto space, aiming to streamline the adoption of RWA crypto within DeFi. This suite of RWA crypto services tackles the complexities of compliance, tokenization, and credit assessment, catering to a wide array of RWA crypto assets. Despite its strides in RWA crypto, Centrifuge has faced challenges, including bad debt within its RWA crypto lending pools, reflecting the nuanced risks of RWA crypto investments.
  • Goldfinch (GFI): Entering the DeFi arena with a focus on RWA crypto, Goldfinch, founded by Coinbase alumni, quickly secured a notable position through substantial funding aimed at RWA crypto projects. Goldfinch's unique RWA crypto lending model provides USDC credit lines, reminiscent of traditional banking but within the RWA crypto framework. Its governance structure, supported by GFI token stakeholders, ensures a decentralized audit system for its RWA crypto loans. With no bad debt incidents reported, Goldfinch's RWA crypto model showcases its robustness and potential for high yields within the RWA crypto sector. The introduction of redeemable RWA crypto loans and strategic RWA crypto transactions with partners like Fazz Financial emphasizes Goldfinch's innovative approach in the RWA crypto space.
  • Maple (MPL): Maple's venture into the DeFi landscape introduced a unique model of uncollateralized loans, transitioning to focus more on RWA crypto to mitigate inherent risks. This pivot towards RWA crypto, including the launch of a U.S. Treasury pool, reflects Maple's strategic alignment with RWA crypto objectives to enhance security and sustainability in lending practices. Maple's development of new RWA crypto loan products aims to address liquidity and risk, signaling a commitment to improving the RWA crypto lending ecosystem.
  • TrueFi (TRU): Specializing in uncollateralized lending, TrueFi distinguishes itself with an innovative on-chain credit scoring system geared towards the RWA crypto market. Facilitating over $1.7 billion in RWA crypto loans, TrueFi's model attracts a diverse range of borrowers within the RWA crypto sphere, bolstered by substantial funding from significant RWA crypto investors. TrueFi's success demonstrates the potential of integrating traditional financial mechanisms with RWA crypto, highlighting the evolving nature of DeFi lending.
  • Synthetix (SNX): As a trailblazer in synthetic assets, Synthetix extends the capabilities of the DeFi ecosystem to encompass a variety of assets, including those within the RWA crypto domain. Its recent advancements, backed by a $20 million investment, aim to broaden Synthetix's reach in the RWA crypto market. The enhancements in version 3 promise greater accessibility and utility for RWA crypto, paving the way for increased adoption of synthetic RWA crypto assets.
  • Polymesh (POLYX): Polymesh positions itself as an institutional-grade blockchain tailored for regulated assets, aligning closely with the RWA crypto market's needs. Its collaboration with Binance as a node operator not only validates Polymesh's approach to RWA crypto but also underscores the growing interest and potential for security tokens within the RWA crypto and broader financial markets.
  • Propy (PRO): Propy leverages blockchain technology to innovate the real estate market, aligning with RWA crypto trends by enabling property transactions in cryptocurrency and NFTs. The integration of AI aims to streamline RWA crypto transactions in real estate, highlighting Propy's commitment to enhancing efficiency in the RWA crypto real estate sector. Propy's significant token surge following its RWA crypto and AI announcement reflects the market's enthusiasm for innovative RWA crypto applications.
  • TrueFi (TRU): Specializing in uncollateralized lending, TrueFi distinguishes itself with an innovative on-chain credit scoring system geared towards the RWA crypto market. Facilitating over $1.7 billion in RWA crypto loans, TrueFi's model attracts a diverse range of borrowers within the RWA crypto sphere, bolstered by substantial funding from significant RWA crypto investors. TrueFi's success demonstrates the potential of integrating traditional financial mechanisms with RWA crypto, highlighting the evolving nature of DeFi lending.

Synthetic Assets

  • Synthetix (SNX): As a trailblazer in synthetic assets, Synthetix extends the capabilities of the DeFi ecosystem to encompass a variety of assets, including those within the RWA crypto domain. Its recent advancements, backed by a $20 million investment, aim to broaden Synthetix's reach in the RWA crypto market. The enhancements in version 3 promise greater accessibility and utility for RWA crypto, paving the way for increased adoption of synthetic RWA crypto assets.

Securities Token-Specific Layer 1

  • Polymesh (POLYX): Polymesh positions itself as an institutional-grade blockchain tailored for regulated assets, aligning closely with the RWA crypto market's needs. Its collaboration with Binance as a node operator not only validates Polymesh's approach to RWA crypto but also underscores the growing interest and potential for security tokens within the RWA crypto and broader financial markets.

On-Chain Real Estate Investment Platform

  • Propy (PRO): Propy leverages blockchain technology to innovate the real estate market, aligning with RWA crypto trends by enabling property transactions in cryptocurrency and NFTs. The integration of AI aims to streamline RWA crypto transactions in real estate, highlighting Propy's commitment to enhancing efficiency in the RWA crypto real estate sector. Propy's significant token surge following its RWA crypto and AI announcement reflects the market's enthusiasm for innovative RWA crypto applications.

What is Pulse?

Launched in early March 2024, PhemexPulse is a pivotal part of the Phemex Web 3.0 ecosystem, designed to foster community among crypto enthusiasts. It rewards active engagement with a daily prize pool of 9,000 Phemex Tokens distributed via 3 payouts per day. As a social platform that pays for participation, it enables users to interact with key crypto influencers and trade exclusive tokens. PhemexPulse is focused on building collaboration and unity within the crypto space. It is also home to the inscription marketplace, where users can trade and hold the limited edition ordinals released by their favorite influencers.

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