Real World Assets: Brief Introduction

The concept of tokenizing real-world assets, including real estate, commodities, private equity and credit, bonds, and art, has been gradually gaining traction since 2018. This innovative approach, formerly known as "security tokens" or "tokenized securities," utilizes blockchain technology to bring traditional assets onto the blockchain.

As we enter 2023, there is a noticeable surge in interest in tokenized RWAs, with several key players making significant strides in this space. Goldman Sachs, for instance, has launched its Digital Asset Platform, while Bradesco has announced the tokenization of $2 million worth of bank credit notes. Hamilton Lane has also made a splash by introducing tokenized equity funds on Polygon, Siemens has issued a €60 million digital bond on-chain, and more.

In this report, we delve into the performance of tokenized real-world assets (RWAs) in 2023 and conduct an analysis to uncover the underlying drivers of the recent upsurge in interest.

RWA Index Price Outperformance

The RWA Index

As a starting point, we have compiled a non-exhaustive list of RWA tokens, taking into consideration protocols with larger RWA market caps, and social and community inputs.

The RWA Price Index shows price outperformance of RWA governance tokens compared to ETH and BTC since the beginning of the year. The RWA index’s run up in 2023 was exceptionally strong during Jan and April, relative to BTC and ETH.

Exploring the Data

• The RWA Index consists of 22 RWA governance tokens on Ethereum, categorized by leading market capitalizations.
• The RWA Index is price weighted according to the latest market caps of the respective tokens.
• Price is calculated daily, and prices are rebased to this year, starting from 1 Jan 2023.
• BTC and ETH price changes are used as a benchmark for comparison.

The 22 RWA tokens below make up the index’s constituents in the chart with a total market cap of $335.4m, as of 8 May 2023.

List of All Tracked RWA Protocols

The table of RWA Protocol provided below comprises all the 40 tracked RWA protocols in this report. The protocols are categorized and further details are covered in the later sections.

Some RWA protocols in the tracked list have not yet released governance tokens, and there is speculation that these projects may have an airdrop. The report further explores this in the later airdrops section, with Atlendis being a notable example.

Key Takeaways

• RWA governance tokens have been outperforming ETH and BTC since the start of the year.
• The RWA index outperformed ETH and BTC price changes significantly over January and April this year.
• Some RWA protocols have yet to issue governance tokens and many of these projects are speculated to have an airdrop.

RWA Project Activity Fundamentals

Top 10 RWA Projects Activity Over Time on Ethereum

In this section of the report, the data quantifies RWA project activity by examining traces to the monitored RWA token addresses on the Ethereum network.

According to the data, the top 10 RWA protocols on Ethereum by activity are:

• Propy
• Maple Finance
• Mantra
• TrueFi
• Domani FInance
• Clearpool
• INX Crypto
• Centrifuge
• Goldfinch

The data indicates a consistent rise in activity throughout 2023, suggesting an increased interest in RWA protocols.

RWA Projects Activity as % of Total Activity on Ethereum

Delving deeper, we see that RWA debt market protocols, including Maple Finance, Truefi, Goldfinch, Centrifuge and Clearpool have emerged as 5 out of the top 10 protocols based on activity over the period, and increasingly so in the recent years. This highlights the growing significance of RWA debt market protocols in the current market.

Another noteworthy observation is the proliferation of various categories of RWA protocols, indicating a shift from the dominance of real estate and RWA securitization infrastructures, which were more prevalent prior to 2021.

The data also indicates that Realio, an interoperable Layer-1 Multi-chain Web3 ecosystem focused on the issuance and management of digitally native real-world assets (RWAs), has experienced a notable steady rise in transaction activity recently, likely due largely to the anticipation of the release of its staking program.

Key Takeaways

• RWA debt market protocols, represented by Maple Finance, Truefi, Goldfinch, Centrifuge and Clearpool, have notably dominated the recent RWA activity scene in 2023 as 5 out of the top 10 protocols based on activity of the tracked RWA tokens.
• Notable proliferation of different categories of RWA protocols, indicating that the real estate and RWA securitization infrastructures no longer dominate the scene as they did pre-2021
• Realio has also seen a notable steady rise in transaction activity most recently. Realio is an interoperable Layer-1 multi-chain Web3 ecosystem focused on the issuance and management of digitally native real-world assets (RWAs).

RWA Debt Market Strategies

In light of RWA debt market protocols emerging as the primary area of interest by activity in recent years, this report section will conduct an analysis to explore the available opportunities and strategies.

RWA Debt Protocol Major Active Loans

Below are some of the top RWA debt market protocols with active loans, with data on their respective active loans as of 1 May 2023.

These RWA debt market protocols offer double-digit yields on average. The below section covers some instances of high yielding strategies.

Tokenized Debt High APY Strategies

Flowcarbon Voluntary Carbon Offsets on Centrifuge

Flowcarbon is a pioneering climate technology firm that leverages blockchain technology to bring carbon offsets into the mainstream. The firm has established a funding pool that will facilitate conservation efforts and carbon avoidance in the Gran Chaco Forest of Paraguay, which is at great risk of deforestation due to its conversion to cropland and pasture for livestock.

Deal summary details here, app here, as of May 2023.

Senior Pool Debt on Goldfinch

The Senior Pool offered by the Goldfinch protocol provides Liquidity Providers with a diverse range of borrowers from over 25 countries, encompassing asset financing, SME loans, and consumer loans. Designed for passive investors seeking a diversified yield generated from real-world economic activity, this offering provides exposure to a variety of borrowers and their respective use cases.

Deal summary details here, app here, as of May 2023.

Fasanara Capital Investments Master Fund on Clearpool

Established in 2019, Fasanara Digital is a subsidiary of Fasanara Capital, a London-based hedge fund with over 200 employees and a focus on alternative credit and fintech strategies. The firm operates a high-turnover fund that trades approximately 10 billion USD per month on both spot and derivatives across major trading venues while maintaining a delta-neutral position.

Deal details here, app here as of May 2023

Credix Fintech Market Fund on Credix Finance

Credix FinTech provides credit to high-quality and fast-growing LatAm FinTech lenders. These borrowers are selected after undergoing a thorough multi-tiered diligence process, with the yield generated and backed by real-world assets. The platform provides investors with access to live deals, allowing them to explore opportunities further.

Deal details here, app here as of May 2023

RWA Landscape & Other Categories

Real-world assets present an extensive market, and there are numerous RWA protocols available beyond just debt markets.To better understand this landscape, we've organized the RWA protocols featured in this report based on their respective markets. Each protocol is briefly summarized, including relevant details such as market cap and FDV.

Capital & Debt Markets

RWA Capital & Debt Market Protocols Brief:

• Maple Finance: Capital markets on chain and uncollateralized loans.
• GoldFinch: Uncollateralized loans.
• TrueFi: Uncollateralized loans.
• Clearpool: Credit protocol with real world institutions as counterparties to loans.
• Atlendis: Credit protocol supporting real world business use cases.
• Centrifuge: Loans backed by specific RWA.
• Credix Finance: Decentralized global credit markets.
• Swarm Markets: Trading platform that includes trading of synthetic stock listings
• StrikeX: Crypto Wallet & Tokenization of global stock markets.
• BlueJay Finance: Aims to provide financial access in Asia through real-world assets and stablecoin infrastructure.
• Securitize: Tokenize Private Funds.
• IX Swap: Tokenization, private markets, next-gen trading, crowdfunding, and DEX.

Money Markets

RWA Money Market Protocols Brief:

• OpenEden: Mint T-bills on-chain.
• Ondo Finance: Tokenize money market funds.
• Polytrade Finance : Tokenizes invoices to help companies with working capital.
• Stream Finance: DeFi Credit Markets.
• Defactor: RWA tokenization including money market products.
• Credefi: Credefi bridges the EU's financing gap by connecting crypto lenders with SME borrowers. Join us on the mission to empower 99% of EU SMEs.
• Elysia: Elysia connects traditional and crypto finance by providing RWA based loans
• NAOS Finance: NAOS Finance is a decentralized lending protocol that aims to offer efficient funding sources to real businesses worldwide by accessing DeFi liquidity.

Real Estate Markets

RWA Real Estate Protocols Brief:

• RealT: A platform powered by AAVE that operates in the Real Estate sector allowing people to buy fractionalized properties in the U.S.
• TangibleDAO: Fractionalized real estate. USDR stablecoin backed by real estate yields.
• Propy: Tokenized real estate.
• LABS Group: LABS Group leverages blockchain, NFT, and Web3 technology to disrupt traditional real estate and hospitality industries.
• Blocksquare: Blocksquare offers tokenization infrastructure for real estate, providing solutions to digitize property values, launch investment platforms, and connect individuals to tokenized real estate deals online.

Commodity Markets: Gold, and Agriculture

RWA Commodity Market Protocols Brief:

• Landxfinance: A protocol that brings agriculture on-chain, allowing people to buy and sell agricultural commodities.
• PaxGold: Tokenized Gold.

Luxury Goods & Assets

RWA Luxury Goods & Assets Market Protocols Brief:

• Galileo Protocol: AI-powered pNFTs provide reliable proof of authenticity, targeting owners of luxury goods and assets.

Securitization of RWA & Infrastructure

RWA Securitization of RWA & Infrastructure Protocols Brief:

• Liquefy: Digital securities blockchain provider that provides service to securitize RWA.
• Realio: Realio aims to eliminate barriers to investing in, trading, and leveraging digital real estate (RE), private equity (PE), and other real-world assets.
• INX Platform: The INX platform offers crypto and security token investment and trading, and provides a comprehensive security token service for potential issuers under SEC compliance.
• Curio Group: Curio Group offers infrastructure solutions that enable companies and individuals to establish a marketplace for their real-world assets and intellectual property.
• Domani Finance: Domani provides democratized management of digital assets, allowing for easy investment in multiple assets at an affordable price.
• Stobox: Stobox is a leading turnkey tokenization service provider, assisting clients in utilizing digital assets and tokenized securities through their technology and consulting services.
• Spume: Spume acts as a bridge between blockchain and modern-day industries, enabling off-chain businesses to accept cryptocurrency payments and track product ownership through their services.

Carbon Markets

RWA Carbon Market Protocols Brief:

• Toucan Protocol: Toucan is developing technology that aims to increase the scale of climate action through a digital carbon market with a transparent and high-integrity approach.
• Regen Network: The Regen Marketplace allows for the purchase, sale, and retirement of ecological assets and premium carbon credits.
• KlimaDAO: KlimaDAO provides a transparent, neutral, and public infrastructure for accelerating climate finance globally through the Digital Carbon Market.

RWA Markets: Potential Airdrops

Among the roster of RWA initiatives that have yet to introduce a native or governance token, certain protocols are garnering attention on social media for potential airdrops. These protocols could be worth investigating for the purpose of airdrop farming.

Landxfinance

Landxfinance has deployed their LNDX governance token in testnet. The future public token generation event is expected to happen in stages with priority given to Omega and Alpha farmers. Omega and alpha farmers are eligible for guaranteed allocations. Landxfinance testnet is currently live here, and the Landxfinance alpha farmer application form can be found here. Omega farmer roles are given by winning community games on discord here.

Atlendis

Atlendis offers uncollateralized crypto loans, allowing borrowers to access capital from lenders without collateral, while compensating lenders with attractive returns to mitigate the risk. You can increase your chances of eligibility of Atlendis speculated airdrop by interacting with the protocol here and depositing supported assets into the protocol's staking pools.

Stream Finance

Stream's vault system will allow users to purchase treasuries and corporate bonds. The team is currently working on the issuance of a token through a fair IDO and airdrop process, which represents governance in Stream. You can increase your chances of eligibility by interacting with the protocol here.

RealT

RealT allows people to buy fractionalized properties in the U.S and are expanding their investments into Europe. From early community calls, the RealT team has hinted that airdrops or other benefits are planned for token holders and active community members. Interact with the community discord here.

OpenEden

OpenEden allows users to mint treasury bills on-chain. While there has not been public announcements, there is community speculation that an airdrop can be done via interaction with the protocol here.