What are real-world assets in Web3? 2024 Review
So many art pieces across the globe have been tokenised as NFTs. Cristiano Ronaldo, Paris Hilton, Eminem and a few more. Their NFT collections are made to help fans get a piece of their literal journey. The NFT industry has moved its compass to tokenising real- world assets on chains. Ranging from tokenising pure gold; offering fixed income capital and real estate, NFTs have proved that its use case is beyond showcasing digital art and documentation in general.
Table of Contents
- What is RWA?
- How does RWA work on blockchain?
- Unlocking DeFi opportunities with Tokenisation as a Service
- How is ElectroWizy leveraging RWA?
In this article, we will take you through the nuts and bolts of on-chain Real World Asset tokenisation.
What is RWA?
In the old age internet, the way we tokenised ownership of real value assets was mainly on paper. For example, Apple’s technology is patented under the name of ‘Steve Jobs’. You can find a digital copy of it. The major difference between a digital copy of the patent and a tokenised copy is that a digital copy can be edited; however, tokenisation of the same on blockchain can assure immutability of the patent.
RWA is a real-world asset that can be traded, stored and tokenized on the blockchain ledger. Assets like gold, real estate, crude oil, paintings and artwork by renowned artists can also be tokenized on-chain. Today, we are witnessing tokenization of new asset classes. You may wonder why on blockchain?
Well, tokenised assets on-chain offers new opportunities.
Tokenising assets brings liquidity in assets along with a borderless trading and investing community
RWA trading on DeFi enables investors to diversify their portfolio as there is no fixed cap on minimum units. (something that not all traditional capital markets can offer)
How does RWA work on blockchain?
From a business standpoint, any project that is set to tokenize real-world assets that are illiquid have to go through some crucial checks. Purpose of tokenizing an asset class and assessing the viability of it. When we say viability, we mean creating an airtight legal framework to ensure that the investors’ funds are fully protected.
Now, let’s understand how RWA works in real time. Suppose, we have an art piece of Banksy, Picasso and imagine we have 6500 infinity stones inspired by Thanos. Now these are real art pieces worth millions of dollars. Now, imagine that many people want to have a share in these but because it is physical, not everyone can buy the whole piece (Budget issues) Here, RWA on chain becomes a game changer. All of these artworks are traded on a marketplace.
Each art piece is tokenized on the blockchain. These Real World Assets (RWAs) are hosted on the blockchain. When buyers for these assets visit the marketplace and buy a fraction or the whole art piece, the RWA’s equivalent is issued to the buyer.
Unlocking DeFi opportunities with Tokenisation as a Service
DeFi is set to gain more momentum with the arrival of TaaS (Tokenisation as a Service) From USD to Gold, Fixed Income, carbon credits and real estate; every tangible and intangible asset with monetary value is being tokenised. Some examples of these are: Maker, Paxos, Zoth (fixed income RWA for institutional investors. The most brilliant takeaway of RWAs on chain are: divisibility of assets, extremely low barrier entry points and access to a global market
How is ElectroWizy leveraging RWA?
Inspired by ESG focused projects and carbon credits as the new stimulator for advocating against climate change, we are aiming to tokenize a replica of the world where players will set foot into the virtual world where they will create their own parallel life on the network (virtual tile) and get a wind of how mankind can combat adverse effects of climate change. To survive in the game, players would need ElectroWizy native NFT assets like inverter, solar panels and other equipment.
Now, you may wonder how this changes anything outside the platform? Well, even though the world is becoming more conscious about energy consumption. They do strive to be frugal while using non renewable energy. Some people may not be fully conscious of this burgeoning issue of climate change. Our platform has a two fold aim.
1 To create awareness about climate change on a gamified network
2 An incentivized ecosystem where early adopters are rewarded for their participation
Note: You too can be a part of this DeFi revolution in Web3 gaming. Learn more about ElectroWizy gameplay at electrowizy.com and join our community to stay in the know.
