🏠 RWA and NFTs: The Future of Investments and Ownership Rights
Many crypto enthusiasts are accustomed to associating NFTs solely with digital art and monkey images on the blockchain. This bias often leads to overlooking lesser-known but more practical use cases for NFTs. Today, we'll dive into one of them: RWA.
🤨 What is RWA?
RWA stands for "Real-World Assets," representing the transformation of tangible assets, such as real estate, art, stocks, and even cars, into digital tokens.
This process has a distinct term: tokenization. It enables the easy and secure ownership and exchange of any asset.
🔗 How are RWA connected to NFTs?
NFTs are unique and immutable, making them perfect for representing real assets, as each has unique characteristics, even when produced in the millions. For example, if you wish to tokenize a plot of land, you can create an NFT representing it on the blockchain. This NFT will be unique and immutable, ensuring that only one person owns the property.
🇬🇪 You might think this sounds like science fiction, but Georgia has been using a blockchain-based land cadaster system since 2016 (https://exonum.com/ru/story-georgia). Tokenizing every piece of land as an NFT is just a matter of time.
😇 Advantages of RWA:
For RWA asset owners:
• Simplify and secure asset ownership and trading.
• Increase the value and liquidity of assets, making them accessible to all.
For RWA investors:
• Gain access to new asset classes.
• Improve investment returns by diversifying their portfolios.
🟡 For instance, The Centrifuge protocol (https://centrifuge.io/) allows asset owners to gain liquidity by tokenizing their RWA, including mortgages, freight invoices, U.S. Treasury bonds, and many other assets. As of today, the protocol's Total Value Locked (TVL) is over $249 million.
🦎 According to CoinGecko's Q3 2023 report (https://www.coingecko.com/research/publications/2023-q3-crypto-report), the market for tokenized treasury bonds grew by over $500 million in the first nine months of this year. This growth is expected to continue as more significant players, like investment banks and pension funds, enter the market.
In conclusion: RWA is an innovative technology with the potential to revolutionize the way we own and invest in real assets.
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