Yuichiro Chino | Moment | fake images
Tokenizing real-world assets on a blockchain is one of the most talked-about topics of the year, and this time it's not just coming from financial headlines like Citi, JPMorgan and Northern TrustIt also comes from native crypto players.
The initial hype around tokenization using blockchains began around 2015 among banks that said they could never adopt bitcoins or cryptocurrencies, but that their underlying accounting technology could potentially be a game-changer by ushering in 24-hour settlement. day, 7 days a week, guaranteed execution and lower transaction fees. As the cryptocurrency world becomes more connected to the broader financial market, the appetite for tokenizing real-world assets, or RWAs, is also coming from smaller players.
"When RWA started trending, we looked at institutions like high net worth individuals, family offices, pension funds [and] university endowments, and that's still true, but what I would consider chain institutions has emerged," said Maria Shen, general partner at Electric Capital, he told CNBC.
For example, the MakerDAO DeFi protocol.
โMakerDAO works with institutions that borrow dai, which is the stablecoin, and effectively tokenize Treasury bills that MakerDAO then uses in its ecosystem,โ Shen said. "That's been a really interesting change that's never happened before."
He broke it down into retail users who can use RWA for remittances and savings, businesses that use stablecoins to pay suppliers, and on-chain institutions like MakerDAO that are trying to access yield through tokenized Treasuries.
Stuti Pandey of Kraken Ventures said that since the last tokenization hype cycle, RWAs have benefited from changes in the economy, technology and credibility.
"In recent years, interest rates have been very depressed and that has favored very high growth and high-risk assets," he said. "In decentralized finance, there were synthetic returns between 80% and 200%, so RWAs really had no chance of thriving. Now that rates are low, it's actually these real-world assets that are yielding interesting".
They can also benefit from better tokenization infrastructure and mind sharing this time, he added.
