Real Deal: Investing in Real-World Asset Tokens in 2024

Contents:

Real Deal: Investing in Real-World Asset Tokens in 2024
RWAs are Real Deal
Trending Real World Assets

1. Stablecoins (currency)
2. Precious metals (gold etc)
3. Tokenized Treasuries (& bitcoin ETF approval)
4. Art, digital art and collectibles
5. Loans and Private credit
6. Carbon credits (carbon offsetting, ReFi)
7. Real-estate (Fractional ownership)
8. Business ownership (Fractional ownership)
9. Supply Chain
10. Ammunition & Emerging RWA assets
    RWA Tokens Worth Considering in 2024
    RWAs in supply chain
    RWAs in finance
    RWAs in business
    ESG sector: RWAs for ReFi (climate)
    Real Estate
    Summary

RWAs are Real Deal

Tokenized Real-World Assets (RWAs) have soared to record market capitalization, surpassing $2.774 billion on February 2, 2024. This includes diverse financial instruments like tokenized equity, tokenized shares, and real estate asset tokenization, which collectively exceeded $1.614 billion by February 8, 2024. Despite these milestones, there’s a noticeable shift towards crypto to buy today over RWAs within decentralized finance (DeFi) applications.

Trending Real World Assets

The past two years have presented unique challenges for DeFi. U.S. inflation soared to 9.1% in June 2022, prompting aggressive rate hikes by the Fed. Concurrently, the crypto industry faced its trials, witnessing the downfall of major projects like Terra/Luna, Celsius, and FTX, alongside banks such as Silvergate and Signature. 

However, amidst this turbulence, tokenizing real-world assets has shed light on the crypto markets. Investor interest shifted towards off-chain yields like U.S. Treasuries while the tokenization narrative gained traction. Real-world asset tokenization, linking tangible assets to the blockchain, emerged as a beacon of innovation and resilience. Here’s a list of the major RWA themes with which crypto will boom in 2024.

1. Stablecoins (currency)

With impending Federal regulation, stablecoins, programmable currency embodiments, are set for transformative growth, altering currency perceptions. Circle and Paxos dominate the US stablecoin market, while globally stablecoins hold a market cap of $137B, forming the foundation of the value internet. Offering stability and flexibility, they promise to revolutionize global payments, e-commerce, and trade finance.

2. Precious Metals

Many market participants are contemplating whether 2024 will usher in a bull market for precious metals due to the possibility of interest rate cuts. Despite the Fed’s tightening cycle, both gold and silver have performed relatively well, with gold experiencing a 12.6% gain year to date while silver has remained largely flat. Just keep in mind that RWAs for these represent a mere fraction of the 15+ trillion market.

3. Tokenized Treasuries (& bitcoin ETF approval)

Tokenized treasuries represent the convergence of traditional finance and decentralized finance, with companies like Franklin Templeton and Ondo leading the way by tokenizing short-term US Treasuries and bank deposits. This asset class, now valued at around $700 million according to RWA.xyz, is experiencing significant growth as it provides new investment opportunities and promotes financial inclusivity by breaking down barriers. With the Blackrock bitcoin ETF, we are currently witnessing the next crypto bull run.

4. Art, Digital art, and Collectibles

Consumer brand NFTs are transforming customer engagement as leading brands like Nike, Adidas, and Louis Vuitton embrace blockchain technology, whether on public or private blockchains, to enhance digital experiences. Meanwhile, backed NFTs are revolutionizing collectible financing by addressing the lack of liquidity and high fees in traditional markets through decentralized protocols like 4K and arcade.xyz, making lending for collectors worldwide possible and bringing physical collectibles onto the blockchain.

5. Loans and Private credit

DeFi lending protocols like Centrifuge, Goldfinch, Credit, Maple, Huma, among others (see our TOP RWA tokens to invest in 2024 below), are disrupting the private credit market, which is valued at $1 trillion in the US and $1.7 trillion globally. These platforms are democratizing access to debt capital for small and medium enterprises, previously excluded from traditional channels. With approximately $550 million in active loans, the market shows promising momentum, especially with a focus on specific industries or geographies.

6. Carbon Credits (carbon offsetting, ReFi)

In the midst of escalating ESG concerns, blockchain is driving favorable transformations within the expanding $2 billion carbon market. Entities such as Flowcarbon are leveraging blockchain’s capabilities to augment transparency within this critical sector, essential for achieving the Global Goals, which necessitates a significant 15-fold expansion by 2030. Tokenized carbon credits offer precision and openness throughout the carbon lifecycle and play a pivotal role in nurturing a sustainable future, tapping into emerging trends like ReFi.

7. Real Estate (Fractional ownership)

Blockchain tokenization within this sector encompasses a broad spectrum of properties, including residential homes, commercial buildings, undeveloped land, and Real Estate Investment Trusts (REITs). This digital revolution enhances the accessibility and divisibility of real estate tokenized funds, thereby allowing access to this asset class.

8. Business ownership (Fractional ownership)

Fractional ownership in web3 businesses offers a unique opportunity to invest in real web3 enterprises and receive a share of their revenue. For instance, the goal of Buy.Fi is to merge Web3 and investing, ushering in a new era of wealth creation accessible to all. And through platforms like Acquire and Centrifuge, cryptocurrency holders can now access sustainable APY from businesses generating revenue in the real world. 

9. Supply Chain

Real world assets tokenization offers a promising avenue for optimization in logistics and enhancing the circular economy. By representing physical assets on the blockchain, tokenization fosters enhanced traceability and transparency throughout the supply chain, facilitating informed decision-making and reducing waste.

10. Ammunition & Emerging RWA assets

Looking at the first chart, one can notice three dominating assets. However, precious metals were the only force just a few years ago. Hence, expect new RWA crypto coin trends like investing in guns and ammunition following the events in Europe and the Middle East.

RWA Tokens Worth Considering in 2024

RWAs in Supply Chain

1. AmmoCrypt (YEET)

AmmoCrypt has equalized access to the ammunition market, once exclusive to those with financial resources and industry expertise. Through innovative blockchain technology and tokenization, AmmoCrypt offers a transparent and user-friendly approach to ammunition supply. The ecosystem is fueled by two cryptocurrency tokens, “YEET” and “Kaliber”, facilitating smart contract activity within AmmoCrypt’s interconnected network. 

2. OriginTrail (TRAC)

By guaranteeing the source of information and facilitating the discoverability of asset backed cryptocurrency, it tackles the problem of disinformation in the AI era. By enabling elite brands and builders, OriginTrail is establishing a Verifiable Web for decentralized artificial intelligence..

RWAs in Finance

3. Maple (MPL)

Maple represents a decentralized corporate credit market. It allows borrowers to receive access to transparent and efficient financing that is entirely completed on-chain. The protocol provides a sustainable yield source for liquidity providers by lending to a diverse pool of cryptocurrency’s premium institutions. Pool Delegates conduct due diligence and set terms with Borrowers.

4. Centrifuge (CFG)

Centrifuge is a protocol for financing assets without a central authority. It connects DeFi with RWAs to reduce the cost of capital for SMEs by providing investors with a consistent source of revenue. The project’s main goal is to generate profits that are not dependent on volatile crypto assets.

5. Dusk (DUSK)

Dusk is a Layer-1 blockchain providing institutional-level privacy and compliance to allow anyone to trade real-world assets from their wallet. Based on regulated and decentralized finance, Dusk aims to change the financial landscape by allowing regulated assets to be brought on-chain.

6. Maker (MKR)

The MakerDAO and Maker Protocol’s governance token is called Maker (MKR). The DAI stablecoin can be issued and managed by users. The goal of the Maker project is to run DAI, a decentralized cryptocurrency controlled by the community. It has a steady value that is soft-pegged to the US dollar. 

7. Polymesh (POLYX)

A permissioned blockchain designed specifically for regulated assets, Polymesh is of institutional quality. It resolves issues with public infrastructure related to governance, identity, compliance, confidentiality, and settlement, streamlining outdated procedures and creating opportunities for new financial instruments.

RWAs in business

8. Clearpool (CPOOL)

Through the Clearpool Decentralized Capital Markets Ecosystem, institutional borrowers have direct access to unsecured loans from the DeFi network. It offers attractive yields to liquidity providers, and additional LP rewards paid in CPOOL, Clearpool’s utility and governance token, boost pool interest rates. 

9. Pendle (PENDLE)

Future yield can be tokenized and traded thanks to the Pendle protocol. Pendle offers customers greater control over future yield by introducing a novel AMM that supports assets with time decay and by creating opportunities for its utilization

10. Polytrade (TRADE)

Polytrade, a blockchain-based decentralized protocol, seeks to revolutionize receivables financing by connecting buyers, sellers, insurers, and investors. People owning the TRADE token can earn a revenue share.

ESG sector: RWAs for ReFi (climate)

11. Planet ReFi (PLANET)

One of the pioneers under Regenerative Finance, Planet ReFi (PLANET), is bridging RWAs with Web3 and collaborating with the biggest names in the world. This initiative is establishing the groundwork for social change and implementing the tested Amazon flywheel revenue model.

12. Regen Network (REGEN)

A comprehensive platform driven by scientific expertise that links investors and buyers to an expanding array of high-quality ecological impact projects.

Real Estate

13. Landshare (ELAND)

Landshare converts physical real estate into fully tradeable, yield-bearing, asset-backed tokens on the Binance Smart Chain. For as little as $50, the individuals can invest in real estate and start receiving monthly rental income and property appreciation straight into their wallet.

14. Propy (PRO)

With the goal of bringing blockchain projects to the real estate sector, Propy (PRO) is a digital asset that runs on the Ethereum platform. In an effort to make real estate transactions as simple and accessible as online shopping, it aims to encapsulate ownership rights into NFTs.

Summary

Real-world assets crypto has gained traction amidst volatile prices and shifting investor interests in other new listed cryptocurrencies, while digital asset tokenization narratives have surged among incumbents and external market participants. Despite momentum, questions remain about the legal connection between tokens and off-chain counterparts and whether RWA prices factor in blockchain-related risks. 

Predictions for 2024 include the proliferation of stablecoin products and novel asset tokenization. The latter includes such profitable markets as ammunition that was unavailable to a wider audience in the past. Notably, purchasing or selling AmmoCrypt tokens does not classify the user as an “arms dealer” or transform a cryptocurrency exchange into an “ammunition store.” Read more about YEET and Kaliber tokens, their role in the AmmoCrypt smart contract ecosystem, and how they are shielding token holders and exchanges from potential licensing or arms transfer regulations. Apply for pre-sale at https://ammocrypt.io/ .