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TLDR:
Tokenization begins with the benefits of fractional ownership, put more liquidity to the table.
There has been infra development of decentralized nodes to generate proof that an on-chain purchase of a token backed by RWA, really happened off-chain.
The natual advantage of blockchain, security, trustless without intermediary, transparency has layed a foundation for such tokenization to work.
Tokenization of RWA has been a hot topic again. Personally I think it is due to high FED rate environment + a bear Crypto market = put real FED yield on chain to retain Defi users. But before the high interest rate environment, people has been thinking about tokenizing real estate, put tokenization of mortgage collateral to work.
Today I want to review some recent developments of tokenization of RWA. Hope u can find it interesting.
Tokenized Teslas
Polkadot, a infrastucture for building customized blockchain, derives the Peaq Blockchain network, which use to store tokenized Teslas car transaction.
So what tokenized Tesla means ? It means ordinary people can fund (mint) a fractional share of a Tesla car and earn a fraction from its ride sharing operation. It is decentralized financing, as in this case we don’t need a centralized car rental company to manage a fleet of ride-sharing cars, rather the decentralized financing of each car and a streamlined and efficient profit transfer from customer to car owner without intermediary.
Something serious and real ?
Of course, basic first: stablecoins
MakerDAO, the creator of DAI, earns 80% of its fees from its reserve of $1.14b US treasury bill. It means, MakerDAO use your collateral to invest into RWA. There has been a growing demand of institutional client in Defi space wanting to channel its on-chain assets to RWA, given the high nominal Fed rate at the moment. Interestingly, MakerDAO now sets the DSR (deposit DAI back into the system to earn yield ) at 8%. I think such high DSR is supported by RWA yield.
All fiat-backed stablecoins can be considered as tokenization of RWA. If minting a stablecoin like USDC is to put RWA on chain, putting USDC to earn yield must come with linking asset back to RWA (There are many details you can dive deep into here). Except CEX like Coinbase, which trying to attract users to its platform, so provide yield from its own fund if you stake USDC , at yield of 5%.
Tokenization of Treasury Bill
I want to mention a company I know:
OpenEden: Use on-chain USDC to buy tokenized T-Bill on-chain. These deposited USDC will be off-ramp into USD. Then T-bills will be purchased for you and use Chainlink to generate proof that the T-bills has been purchased.
It uses a key technology from Chainlink which is Proof of Reserve, without which, we cannot trust that the T-bill token is really backed by purchase of T-bills off-chain.
To the future: Tokenization of Private Credit
There has been a saying here and there that private debt will be the next to be tokenized. Because loans to non-public companies has been so much customized thus illiquid, tokenization of these loans on-chain will boost liquidity and better price discovery, together with streamlined operation including interest payments and contractual terms using smart contracts. So how to boost liquidity exactly ? Tokenization supports fractional ownership, it allows a private loan to be broken down to smaller units to reach out to a larger investor base, thus generating more liquidity.
There are many details you can cook for yourself, I just provide tip of an iceberg here. Thanks.
https://finance.yahoo.com/news/makerdao-now-earns-80-fee-193402563.html
https://cointelegraph.com/news/100-teslas-democratize-and-decentralize-web3-ride-sharing
https://chain.link/proof-of-reserve
https://www.ledgerinsights.com/moodys-tokenization-private-capital-alternatives/
TLDR:
Tokenization begins with the benefits of fractional ownership, put more liquidity to the table.
There has been infra development of decentralized nodes to generate proof that an on-chain purchase of a token backed by RWA, really happened off-chain.
The natual advantage of blockchain, security, trustless without intermediary, transparency has layed a foundation for such tokenization to work.
Tokenization of RWA has been a hot topic again. Personally I think it is due to high FED rate environment + a bear Crypto market = put real FED yield on chain to retain Defi users. But before the high interest rate environment, people has been thinking about tokenizing real estate, put tokenization of mortgage collateral to work.
Today I want to review some recent developments of tokenization of RWA. Hope u can find it interesting.
Tokenized Teslas
Polkadot, a infrastucture for building customized blockchain, derives the Peaq Blockchain network, which use to store tokenized Teslas car transaction.
So what tokenized Tesla means ? It means ordinary people can fund (mint) a fractional share of a Tesla car and earn a fraction from its ride sharing operation. It is decentralized financing, as in this case we don’t need a centralized car rental company to manage a fleet of ride-sharing cars, rather the decentralized financing of each car and a streamlined and efficient profit transfer from customer to car owner without intermediary.
Something serious and real ?
Of course, basic first: stablecoins
MakerDAO, the creator of DAI, earns 80% of its fees from its reserve of $1.14b US treasury bill. It means, MakerDAO use your collateral to invest into RWA. There has been a growing demand of institutional client in Defi space wanting to channel its on-chain assets to RWA, given the high nominal Fed rate at the moment. Interestingly, MakerDAO now sets the DSR (deposit DAI back into the system to earn yield ) at 8%. I think such high DSR is supported by RWA yield.
All fiat-backed stablecoins can be considered as tokenization of RWA. If minting a stablecoin like USDC is to put RWA on chain, putting USDC to earn yield must come with linking asset back to RWA (There are many details you can dive deep into here). Except CEX like Coinbase, which trying to attract users to its platform, so provide yield from its own fund if you stake USDC , at yield of 5%.
Tokenization of Treasury Bill
I want to mention a company I know:
OpenEden: Use on-chain USDC to buy tokenized T-Bill on-chain. These deposited USDC will be off-ramp into USD. Then T-bills will be purchased for you and use Chainlink to generate proof that the T-bills has been purchased.
It uses a key technology from Chainlink which is Proof of Reserve, without which, we cannot trust that the T-bill token is really backed by purchase of T-bills off-chain.
To the future: Tokenization of Private Credit
There has been a saying here and there that private debt will be the next to be tokenized. Because loans to non-public companies has been so much customized thus illiquid, tokenization of these loans on-chain will boost liquidity and better price discovery, together with streamlined operation including interest payments and contractual terms using smart contracts. So how to boost liquidity exactly ? Tokenization supports fractional ownership, it allows a private loan to be broken down to smaller units to reach out to a larger investor base, thus generating more liquidity.
There are many details you can cook for yourself, I just provide tip of an iceberg here. Thanks.
https://finance.yahoo.com/news/makerdao-now-earns-80-fee-193402563.html
https://cointelegraph.com/news/100-teslas-democratize-and-decentralize-web3-ride-sharing
https://chain.link/proof-of-reserve
https://www.ledgerinsights.com/moodys-tokenization-private-capital-alternatives/
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