Real World Assets are physical assets, like real estate, commodities, shares, and artwork, that are represented digitally on a blockchain. By converting these assets into digital tokens, investors can buy, sell, and trade smaller portions. This makes previously exclusive asset classes more accessible. This model of fractional ownership broadens access to high-value assets, enabling individuals to invest in items that would typically necessitate significant capital, which in turn enhances investment opportunities.
Tokenized real-world assets (RWAs) offer several significant benefits, such as enhanced liquidity, increased efficiency, and improved transparency. Traditional assets often suffer from illiquidity, making cash conversion challenging. However, tokenization allows these assets to be traded on digital platforms, facilitating quicker and more accessible transactions. The use of blockchain technology provides clear record-keeping and automates processes with smart contracts. It reduces the dependence on intermediaries, cuts costs, and fosters trust. Furthermore, RWAs create new opportunities for diversifying portfolios, giving investors options to allocate risk beyond conventional stocks and bonds.
Despite these benefits, RWAs come with challenges, including regulatory hurdles, valuation difficulties, and security concerns. Different jurisdictions regulate tokenized assets in various ways, creating compliance complexity, and accurately pricing RWAs remains tricky due to their real-world dependencies. Nonetheless, RWAs have the potential to reshape finance, merging traditional and digital markets, increasing global market access, and providing blockchain with practical, real-world applications that could revolutionize investment practices.
We will look at 3 different projects in the space.
Ondo finance
Ondo Finance is a DeFi platform that bridges traditional finance with blockchain by offering tokenized versions of real-world assets, such as U.S. Treasury bills and corporate bonds. This allows investors to access stable, yield-generating financial products within the crypto ecosystem, providing lower-risk, fixed-income opportunities compared to typical DeFi products. By tokenizing these assets and managing them with smart contracts, Ondo enhances accessibility, transparency, and efficiency for both retail and institutional investors, aiming to create a compliant, stable link between conventional finance and decentralized markets.
Ondo is deployed on several blockchain such as Mantle and Ethereum. The treasury bills native tokens (USDY and OUSG) can be bridged from one chain to another and used in DEFI to earn an additional yield.
Mantra
While Ondo’s goal is to tokenize real world assets into tokens, Mantra offers a layer1 solution customized for RWAs. Its goal is to simplify the adherence to regulatory requirements. Mantra is built using the Cosmos sdk and offers ready made modules that developers can build on or leverage such as a compliance ID which offers a single solution for all Mantra Apps for KYC solutions.
Mantra integrated Ondo‘s USDY token and offers it as a genesis asset throughout the blockchain.
Anzen
Anzen Finance specialize in real-world lending, focusing on integrating real-world assets (RWAs) into the DeFi ecosystem. Its goal is to provide stable, yield-generating opportunities. By connecting blockchain-based lending with traditional financial instruments, like loans backed by U.S. Treasury bills or other secure assets, Anzen aims to offer a safer, more predictable alternative to typical crypto-based lending platforms. Any user can provide liquidity to Anzen which will be used to power real world secured loans. Anzen partnered with Ondo by backing part of its reserve with tokenized security deposits backed by Ondo’s token.
Anzen offer a stable coin USDz on several chains (Ethereum, Arbitrum, base, etc…) that is backed by real loans and other financial assets. USDz can be staked to earn around 15% yield. Anzen also offers different strategic vaults and earn additionnal yields by locking your coins for a period of time.
Anzen has presently an airdrop opportunity. All you have to do is hold USDz to start accumulating points. You can buy it directly from Anzen or swap into it on any dex like jumper. If you use your USDz in DEFI on platforms like Aerodrome or Ionic, you can earn a multiplier on your liquidity.
Do not forget to do an extensive research before diving in, because holding USDz comes with risks. USDz can unpeg from real USD if any of the underlying loans has some default. Using USDz on DEFI platforms adds another layer of smart contract risk, impermanent loss, etc…