The Current Development Status of the Cardano Ecosystem’s RWA Track
Introduction
This year, Real World Assets (RWA) have emerged as the fastest-growing track in the cryptocurrency space, hailed as the next big theme in DeFi. With the improvement of DeFi infrastructure, accessing funds and returns from the real world has become a development trend. This article explores the development status of RWAs based on the Cardano ecosystem.
What is RWA? Advantages and disadvantages?
Real World Assets (RWA) refer to the tokenization of tangible and intangible assets existing in the physical world, bringing them onto the blockchain to create more possibilities and potential uses. RWAs encompass the issuance of on-chain products like tokens and NFTs, as well as physical assets such as real estate, loans, bonds, artwork, intellectual property, and any valuable assets.
RWA significantly enhances the liquidity and transparency of assets for two main reasons. Firstly, cryptocurrency exchanges allow these tokens to be traded 24/7, providing traders with more freedom. Secondly, for RWAs to exist on-chain, their ownership and representation rights must also be placed on the blockchain, undoubtedly boosting investor confidence and further reducing the likelihood of fraud and ownership conflicts. Additionally, tokenization lowers the barriers for investors in traditional financial markets and eliminates the intermediaries present in traditional financial markets, allowing investors to buy assets at lower prices.
The application of RWAs is still in its early stages, so RWAs are subject to regulation in various countries and the formulation of relevant laws. Issuing RWAs without complying with local laws and regulations may attract legal consequences. Furthermore, due to the susceptibility of digital assets to fraud and hacker attacks, we cannot guarantee the security of every project. Therefore, until compliant custody solutions and security measures are introduced, RWAs cannot directly fulfill their potential in the financial market.
Why Use Cardano for RWA?
Firstly, Cardano, like any other public blockchain, offers global 24/7 settlement services. Additionally, as a mature public blockchain, Cardano’s performance surpasses other Layer 1 blockchains such as Solana, Polkadot, Aptos, and Sui. It is the first blockchain developed through a scientifically peer-reviewed and research-driven approach, dedicated to supporting applications in finance, intellectual property, identity, governance, education, and more. Currently, it ranks eighth in market capitalization in the cryptocurrency space, reaching $11.2 billion, with a total locked value exceeding $160 million.
Secondly, there are as many as 500 DApps associated with Cardano. This means that Cardano, as the underlying asset, provides sufficient volume and innovation support for the RWA ecosystem. For assets such as tokenized foreign exchange and securities that require high-frequency trading, Cardano enables transactions with lower transaction fees (approximately two Taiwanese dollars) and high TPS (transactions per second).
RWA on Cardano
NMKR (NFT-Maker)
The LCX Token Launchpad is an on-chain token issuance platform used for compliant initial token offerings, private token sales, and public token sales. NMKR is developed on the LCX Token Launchpad to establish a multi-chain NFT ecosystem system by creating tools for onboarding, minting, and market sales. It’s also dubbed as the “Shopify of the NFT industry,” aiming to lower the barriers for end-users, artists, brands, and enterprises to enter the NFT space.
Although NMKR intends to develop a blockchain-agnostic NFT ecosystem, Cardano is still considered its primary focus. With this in mind, they developed NMKR PRO, which is Cardano’s first “mint on demand” public tool. Since its launch, it has become a major driver behind approximately 50% of all unique projects and accounts for 20% of all NFTs in existence today, which is quite significant.
Founders Patrick Tobler and Fahim Popalzai launched the first NMKR V1 website, allowing non-technical users to easily create their first NFTs on Cardano, which immediately gained success upon launch. Since then, it has enabled more artists, brands, and enterprises to establish NFTs on Cardano compared to any other minting tool.
Taimonds
At the Cardano Summit 2023, Tiamonds and NMKR released the world’s first tokenized real-world diamonds on Cardano. This groundbreaking event sent shockwaves through the cryptocurrency world, with Tiamonds being sold out within 48 hours of the announcement, highlighting the enormous demand for this unique fusion of traditional and technological assets.
Taimonds is a project that tokenizes real-world diamonds on Cardano. The project includes two key elements: tokenized diamonds called Tiamonds and the TIA Token, a deflationary cryptocurrency. These diamonds are verified by LCX and stored in a Swiss vault, insured by London Lloyds. Owners can redeem their Tiamonds and receive their diamonds physically. Additionally, for every Tiamond purchased, holders earn $TIA tokens, increasing their investment returns. To acquire diamonds and hold them in your possession, several steps need to be followed:
- First, you must have a fully verified LCX account.
- Second, contact LCX via hello@LCX.com.
- Third, LCX will send you an email with the total fees for redemption, as well as payment instructions for paying these fees to the wallet address provided for sending the Tiamonds.
- Fourth, once the fees are paid and Taimond confirms receipt of payment, LCX will retrieve the purchased diamonds from the vault and ship them to your specified address, or you can collect them in Liechtenstein.
Landano
Landano is a platform dedicated to using blockchain technology to revolutionize real estate and land ownership in Africa. It allows property owners to create legally binding ownership contracts for their land through easy-to-use decentralized applications (DApps). Property contracts and proof documents are notarized on Cardano, creating immutable and auditable NFTs for each registered land ownership to ensure secure, transparent, and tamper-proof records of land ownership, eliminating the risk of fraud or corruption that may occur when managing records manually.
Since Landano’s land records are stored on a shared, auditable ledger, users can leverage land records to obtain financing for their businesses, obtain mortgage loans, or negotiate leases. Additionally, users can confirm their real identity and property ownership as verifiable statements using a simple smartphone DApp.
Empowa
Empowa aims to address the housing shortage problem affecting 50 million people in Africa. To achieve this, they have developed Empowa Pay, Empowa Trade, digital SDRIs (financial instruments), and the EMP Token to provide “rent-to-own” housing policies to achieve financial inclusion and provide liquidity for homeownership. This scheme addresses the difficulties faced by African people in obtaining mortgage loans due to a lack of credit history and the housing issues caused by climate change.
Empowa can record payment data on Cardano, allowing housing developers, property managers, or financial institutions providing payment plans to capture the entire lifecycle of rent-to-own contracts. Additionally, their token, EMP, can be traded on most Cardano DEXs, including MuesliSwap, MinSwap, WingRiders, and SundaeSwap. For detailed operation of Empowa, more information can be found on “How Empowa Works” for those interested in how they provide “rent-to-own” housing policies.
Adaverse
Adaverse is a project serving as a catalyst in the Cardano ecosystem, bringing together entrepreneurs, strategists, and mentors and establishing a strong presence in Asia, the Middle East, and Africa. It is a collaboration between EMURGO and Everest Ventures Group, providing funding, guidance, and technical infrastructure to support blockchain founders in expanding Web 3 solutions, helping them build the next wave of decentralized applications on Cardano, including NFTs, DeFi, etc. Adaverse’s strategic focus on the RWA track is to embrace the fertile ground of the African continent, further solidifying and expanding Cardano’s position.
For example, HouseAfrica and Seso Global are both projects on Adaverse’s RWA track. HouseAfrica, driven by a team of creative and technical talents, aims to eliminate speculation and gambling in Nigerian real estate transactions through digital land registration and establish secure technology for verifying and assessing real estate. Seso Global is an all-encompassing real estate technology platform that redefines African real estate business by providing a simplified and trustworthy real estate purchasing experience. It utilizes blockchain technology to provide a secure, risk-free digital land transaction market for homeowners, buyers, land agencies, and financial institutions.
Perspectives and Ideas
When discussing Cardano’s ambitions and strategies in the RWA field, it’s evident that the project has significant attention and investment in the African real estate sector. However, the RWA Panel at the Cardano Summit 2023 sparked diverse viewpoints regarding the African real estate market.
Nilay Saha emphasized the importance of focusing on developing regions in Africa, suggesting that these areas require more attention and support to establish better real estate systems, thus improving the living conditions of local residents. He pointed out that strategizing in these regions would provide more opportunities and enhance living conditions for the local populace.
In contrast, Marcus Maute focused on the potential of tokenized assets to change the existing centralized system. He believed that tokenizing assets could make transactions more transparent and decentralized, attracting more participants to the market. This new structure could disrupt traditional centralized models and bring about more innovation and opportunities.
From a personal perspective, both viewpoints have merit and may be applicable in different scenarios. Nilay Saha’s emphasis on supporting developing regions aligns with a proactive approach to improving local communities’ living standards. On the other hand, Marcus Maute’s focus on the potential of tokenized assets highlights the opportunities for greater market transparency and participation, leading to innovation and development.
Ultimately, determining which viewpoint is more accurate may depend on specific circumstances and market needs. With support from blockchain platforms like Cardano, we can expect to see more innovation and development in the RWA field, bringing about positive changes to the global real estate market.
