Evolution of RWAs: The Future of DeFi ??
In the dynamic world of DeFi, one narrative has steadily emerged as a transformative force: Real-World Assets (RWAs). Zoth believes that RWAs are poised to revolutionize the financial landscape, and here's why.
A Glimpse Back: 2018
The year 2018 witnessed a surge of projects aiming to tokenize real-world assets, from real estate to US equities, with a clear goal: to bridge the gap between Traditional Finance (TradFi) and DeFi ????????.
But obstacles stood in the way...
During this time, institutions and HNIs constituted a significant demand pool. Yet, they hesitated to adopt on-chain RWAs ??.
The existing access they had to real estate, bonds, and equities posed questions about the incremental benefits of embracing these new digital assets.
Furthermore, the complete infrastructure for integrating tokenized assets into the DeFi ecosystem was not fully developed ?.
Despite the allure of accessibility and composability, this potential couldn't be fully realized due to the lack of a solid foundation.
Obstacles Galore
Supply-side challenges abounded. Sporadic offerings and negative asset self-selection hindered adoption ??.
Often, assets making their way onto the blockchain were those struggling to find demand in the traditional realm, presenting a significant challenge.
Legal and enforcement complexities added another layer ??.
The intersection of traditional legal systems and the decentralized nature of blockchain technology created numerous hurdles.
UX and custody concerns also hindered broader adoption ????.
Securely self-custodying substantial asset values was a challenge, especially for non-crypto natives.
A Transformative Shift: Today
Fast forward to today, and substantial shifts have occurred ??.
The shift in the US interest rate landscape, from 0% to 5%, has driven demand for real-world yield. The hunger for on-chain access to traditional financial products has grown stronger.
DeFi has matured remarkably ???.
Stablecoins, lending markets, and exchanges are now integral, allowing the envisioned benefits of 2018 to finally materialize.
Importantly, UX and custody concerns are no longer as monumental ??.
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Crypto-natives actively seek real-world yields, while organizations adept in blockchain operations are keen to access cost-effective dollar exposure.
RWAs: A Path to Reshaping Finance
Standing at a crossroads, RWAs are taking the initial steps to reshape the global financial landscape ??. The journey to integrate real-world assets into the blockchain has only just begun.
Data from DefiLlama reveals the progress: the RWA category began in 2023 with a $100M TVL and now stands at $1.25B, making it the 8th largest sector in DeFi.
MakerDAO's revenue has surged due to its RWA exposure, boasting a notable $2.4B RWA portfolio.
Looking at the charts below, it's evident that the number of unique addresses interacting with RWA tokens on Ethereum has steadily increased ??.
The DEX volume of RWA-related tokens has also been on the rise over the past two years ???.
RWA metrics, including TVL, DEX volume, active loans, and holders, have grown exponentially. The trajectory is clear: RWAs are on track for massive growth, following an exponential curve ??.
Embracing the Future
In conclusion, 2023 is the year of RWAs. This is the year when the potential turns into reality ??♂?. As the blockchain ecosystem navigated challenges, Zoth has emerged prepared and ready to contribute significantly.
Interested to learn more? Join our Telegram Community for insightful discussions and queries related to RWAs - a space to engage, learn, and evolve together ??
Join us on our journey as we pave the way for a fairer future in finance! With Zoth, access to affordable capital becomes a reality, businesses thrive, and investors discover new horizons
Let's shape a better future for businesses, investors, and economies worldwide ??.
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