RWA Market: The Aave Market for Real World Assets goes live.

RWA Market uses the Aave Protocol to bring more liquidity to Centrifuge assets.

Lucas Vogelsang
Dec 28, 2021 · 3 min read

Today the Real World Asset (RWA) Market goes live! Built on Centrifuge and the Aave Protocol, the RWA Market is the first diversified real world asset market on the Aave Protocol, bridging DeFi to the infinite potential of the real-world. The RWA Market is launching with seven pools and is already allowing liquidity providers to deposit USDC.

How does this work? The Aave Protocol allows markets to be created where people can borrow tokens by depositing collateral. Interest rates go up and down depending on the utilization of the market.

RWA Market is serviced by END_Labs and allows businesses to finance their tokenized Real Estate Bridge Loans, Trade Receivables, Cargo & Freight Forwarding Invoices, Branded Inventory Financing, and Revenue Based Financing using crypto. It allows users to diversify their portfolio with uncorrelated, stable assets.

With RWA Market, the world of TradFi is taking a step towards DeFi. Aave, one of the trailblazers in the DeFi space RWA in the form of this first permissioned pool is a huge step for Aave towards a wider adoption in traditional finance. Aave users who previously only were able to lend against crypto native assets can now earn yield against stable, uncorrelated real world collateral.

We are a pioneer in bridging RWAs to the DeFi sphere. In April this year we were first to introduce RWA as collateral for Maker. With Aave and Maker Centrifuge issuers now have one more source of liquidity further diversifying their capital.

Issuers create pools for their assets. Investors buy tokens from these pools by depositing stablecoins into the pool. The issuers can then borrow stablecoins against these assets and turn this into fiat currency for real world borrowers. All pools assets and the performance of the portfolio is fully transparent on chain, visible not just to investors but to everyone; check it out. Pools typically focus on a specific asset class, for example real estate or trade finance.

With the RWA Market, when a pool has a need for capital the issuers can not just opt to accept direct investments but also deposit the pool tokens in the Aave protocol and thus directly borrow from any RWA Market investors. RWA Market investors through that get a diversified portfolio of senior secured real-world assets on the Centrifuge protocol, a portfolio completely uncorrelated to crypto assets.

The RWA Market bridges the regulated world of TradFi to the trustless world of DeFi. Creating an infrastructure to securely onboard RWA that is able to scale has been exciting and we’re proud to see this work pay off.

The Centrifuge community is discussing liquidity rewards for early liquidity providers. Should governance decide to move ahead, the RWA Market will qualify for wCFG rewards.

The RWA Market is onboarding real businesses on the asset side and institutions on the investor side to make it easier for everyone globally to access financing.


Real World DeFi