You can’t talk about the hottest narratives in crypto without mentioning the RWA (Real World Assets).

It is one crypto sector that brings real world assets to the blockchain.

RWA has seen an explosive growth with a record combined TVL reaching an all-time-high of $6 billion.

With such an impressive growth trajectory, could RWA be the next big thing in crypto?

In today’s post, we will discuss RWA, the top projects building on this narrative and how far they could go.

Post Summary

• RWAs: The Hot Topic in Crypto
• Top 5 Projects Leading The RWA Narrative
• Are RWAs The Next Big Thing?
• Conclusion

RWAs: The Hot Topic in Crypto

The concept of Real World Assets (RWA) in crypto involves tokenizing or converting real-world assets into on-chain assets on the blockchain.

A wide range of real-world assets can be tokenized, including commodities, real estate, jewelry, shares, precious metals, and even fine art.

Tokenization essentially creates a digital representation of real-world assets so that they become easily tradable and verifiable on the blockchain.

Imagine tokenizing your land property in Nigeria – with that done, your ownership becomes transparent and secure on the blockchain.

Stablecoins like USDT which launched in 2014, provided the foundation for RWA tokenization by bringing the fiat currency into the crypto world.

However, since the DeFi boom, other RWA categories like commodities, real estate, bonds, and art have gained significant traction.

The RWA sector is experiencing explosive growth, evidenced by its skyrocketing total value locked (TVL).

On top of it, it is seen as a major narrative that could drive the next crypto bull run by bringing more traditional investors and financial products into the DeFi space.

Let’s take a closer look at the top projects leading the RWA narrative

Top 5 Projects Leading The RWA Narrative

1. Ondo Finance

Ondo Finance is one of the RWA project which has seen significant growth.

The project has created numerous RWAs products. Among the popular ones are USDY, OUSG and Flux.

The first two create tokens representing real-world assets, such as U.S. Treasuries, allowing them to be traded and used within the DeFi ecosystem.

The former is a decentralized lending protocol that specifically supports tokenized securities as collateral, facilitating borrowing and lending activities.

Ondo finance is the largest RWA project by market cap, exceeding $1 billion as of writing. Its native token, ONDO, has also seen impressive performance, gaining by 700% in just 4 months since launch.

2. Mantra

Mantra chain is a Layer 1 blockchain focused on bridging the gap between TradFi and DeFi through RWA tokenization.

Mantra Chain prioritizes security by adhering to regulatory requirements, making it a potentially attractive RWA project.

Formerly known as Mantra DAO with a focus on Defi before shifting its scope, OM remains the native token of the Mantra ecosystem.

Mantra launched its Hongbai testnet in April 2024 and is currently still in the testing phase at the time of writing.

3. Pendle

Pendle is a DeFi protocol that focuses on yield tokenization.

Users can deposit their assets into pools to generate substantial yields on their deposits.

The protocol also incorporate an automated market maker (AMA) algorithm for trading these tokens.

In August 2023, Pendle even started letting users earn interest on RWA through fUSDC and sDAI.

Pendle’s has been solidly bullish! The total value locked on their platform (TVL) and the price of their token (PENDLE) have both been on a steady rise since they launched.

4. Centrifuge

Centrifuge is another leading RWA project to watch out for.

This protocol makes it easier for anyone to invest in real-world assets using cryptocurrency, while offering exciting opportunities for both borrowers and lenders.

It offers various asset pools and aims to lower borrowing costs globally while providing stable yields for DeFi users.

Centrifugestands out as one of the top lending and borrowing protocols and partners with major DeFi companies like MakerDAO and AAVE.

Centrifuge’s native token CFG is 7th largest RWA token by market cap. Impressive!

5. Goldflinch

Goldfinch is an RWA project that sets itself apart by making DeFi lending more inclusive.

Unlike many DeFi lending platforms, Goldfinch doesn’t require borrowers to put up collateral for their loans, instead, it uses a credit assessment system.

Borrowers obtain loan based on their potentials to repay the loan in the real world.

In addition, Goldfinch is focused on generating high-quality, stablecoin yields for lenders.

These yields are backed by real-world economic activity, aiming to provide stability compared to the volatility often associated with DeFi.

With over $100 million in loans facilitated, Goldfinch has established itself as a key player in RWA adoption within DeFi.

Goldfinch is governed by its native token GFI and is currently tradeable on a wide range of major exchanges.

Note that these top RWA projects have been listed in no particular order.

How far could RWAs go? I have some thoughts to share below.

Are RWAs The Next Big Thing?

The RWA narrative is gaining serious momentum, fueled by a recent surge in TVL and a market cap exceeding $6 billion.

RWAs have the biggest market potential in crypto because they include so many things.

Just a small part of these assets, once tokenized, could change crypto completely.

Another compelling aspect of RWAs is that they inject liquidity to traditionally illiquid markets, making them readily tradeable.

Financial giants such as Wisdom Tree, Bank of America and Franklin Templeton, BlackRock are already exploring the space.

Consulting giant BCG predicts the RWA market could reach $16 trillion by 2030.

The potential is staggering and its just the beginning!

As the RWA hype intensifies, more big institutions will likely get involved, expanding the RWAs towards rapid growth.

In addition, more solid RWA projects will emerge, generating significant returns by addressing real-world issues.

However, the main hurdles for RWAs is regulatory uncertainties.

But as adoption for RWAs increases, it could spur regulatory support, making them safer for institutions to invest.

While RWA is still in its early stages, with many projects still finding their footing, the future looks bright.

Currently, most RWA projects boast market caps under $1 billion, showing there’s plenty of room to grow.

Conclusion

RWAs are a promising space with no signs of the buzz slowing down.

The best way to navigate the hype is to invest only in well-researched projects and avoid those just riding the wave.

What are your thoughts on the future of RWAs?

Share in the comments below and don’t forget to share this post using the ‘SM’ buttons below if you enjoyed it.