I personally have high hopes for the future of the RWA sector! So what is RWA?
In the cryptocurrency world, RWA, or Real World Assets, refers to various assets in the real world, such as real estate, bonds, intellectual property, renewable energy facilities, and other tangible or intangible assets, that are transformed into tradable digital tokens on the blockchain using blockchain technology. In simple terms, it means ‘moving’ real assets onto the blockchain, turning them into forms of assets that can be traded and circulated in the digital world.
Taking charging stations in the renewable energy sector as an example, traditional construction of charging stations requires a significant investment, making it difficult for ordinary investors to participate. However, using RWA technology, the network of charging stations can be divided into numerous revenue tokens, corresponding to a portion of their operational revenue rights, and sold to global investors on the blockchain. Even with limited funds, one can subscribe to a share and enjoy the operational revenue from the charging stations, thus enhancing asset liquidity.
The emergence of RWA is of great significance. For financing parties, it opens up channels to meet investment demands in the crypto world for assets with high value, low liquidity, and long payback periods, enhancing asset liquidity; for investors, it lowers the investment threshold, allowing ordinary investors the opportunity to participate in projects or asset investments that offer stable returns and controllable risks but have traditionally high entry barriers.
Currently, the global RWA market is developing rapidly. By the end of 2024, the total locked value is expected to reach 15 billion dollars, growing more than tenfold since the beginning of the year. From the perspective of pilots and applications, high credit-rated interest-bearing assets, such as U.S. Treasury bonds and money market funds, are the preferred direction for institutions to try first, while structured credit and property operational rights have also completed tokenization prototypes and financing operations. As the establishment of new asset confirmation mechanisms like data elements and intellectual property progresses, they are gradually being included in the RWA category.
