"Investing with a certain mindset will make your psychology easier."

Gm, in the midst of the current stressful market situation, I think choosing an investment is very important, no one wants to go through a difficult period, waiting tirelessly but the profits are too little or not. More bad luck than loss. That's why I wrote about RWA - a narrative that I'm very bullish about. Not encouraging anyone to join the line, just to provide insight into this narrative. Synthesizing like this takes a lot of time, I hope it is useful and well received

What is RWA? what is the meaning

Real-world asset (RWA) is most simply understood as encoding real-world assets onto the blockchain.

Originating from practical issues about real estate, commonly real estate has difficulty in pricing, leading to poor liquidity (no two buildings are exactly the same and in the same location). it is a legal issue when transferring ownership

Recalling historical precedents such as the collapse in liquidity in money market funds in 2008 and 2020, which required a US government bailout, this is also a stark reminder of the potential volatility assets market. These risks are exactly why there is a need for stablecoins (liquid, stable assets that mitigate volatility risk by being tied to fiat currencies or other low-volatility assets).

⭕️ Here I believe: "The main path to RWA growth is dollar-backed stablecoins"

Anyone participating in the market is probably familiar with stablecoins. It is the most liquid and widely accepted asset, the backbone of DeFi, reflecting the role of credit in today's global economy. Many stablecoins now enable efficient cross-chain transactions, thereby reducing dependence on the traditional banking system and supporting complex financial products such as lending platforms, liquidity pools and yield farming protocols.

This trend is being demonstrated with the addition of Paypal's $PYUSD, $ONDO's stablecoin, $ENA's $USDe, Binance's $FDUSD and most commonly, the amount of $USDT $USDC that is continuously being minted.

Real World Asset market size

Real World Asset accounts for the majority of global financial value. For example, the worldwide debt market has an estimated value of $313T USD (trillion), gold has a market capitalization of $15.6T USD, and the total value of global real estate is approximately $379T USD (end 2022 ), estimated in 2024 to reach $637.80T USD. Meanwhile, the current total RWA Onchain value is only $10.54B (+5% compared to last month)

This is not to mention items such as agricultural products, bills, bonds.... how terrible will the cash flow be?

How to measure the potential of RWA?

1. Cash flows continuously

As I said before, RWA will not be a short-term trend or narrative as people often think, but it will be a big trend that helps draw cash flow to#Defiand the entire crypto market.

TradFi (Traditional Finance) giants like Fidelity, JPMorgan and BlackRock are leading the new wave of RWA tokens using cryptocurrency, pioneering the tokenization of real-world assets (RWA ). The starting shot was when Blackrock announced to pour $100M into the RWA ecosystem

Fidelity International has also announced its participation in JPMorgan's tokenization network. In parallel, BlackRock's BUIDL, its tokenized liquidity fund, continues to grow and has now accumulated more than $460 million.

2. Wide application, more and more assets are encrypted

#Blockchain technology helps significantly reduce costs compared to traditional side trades. For example, applying blockchain will help governments reduce bond issuance fees by up to 90% and capital mobilization costs by 40%.

Potential to expand into other industries: Not only stopping at real estate, RWA also expands to other types of assets. For example, Infineo recently delivered the first tokenized life insurance policy on the Provenance network, creating a total policy value of $9.4M.

In addition, RWA projects also seem to recognize the limitations and are solving existing problems better by providing adequate tools to put assets onchain, meaning users will not need to worry about Tokenization, asset management, liquidity and especially legal issues. @Plumenetwork is a hst RWA that is doing a great job on this.

Conclude

Market data shows a steady increase in RWA's market capitalization, currently at $7.3B.

Besides Stablecoin, the Private Credit, U.S. Treasuries and Commodities segments have all recorded outstanding increases in value in recent years, showing the potential of this narrative.

Not saying anything but still hot, this is an area that Bob is very bullish because it has high applications and can easily attract cash flow. Regarding the development plan of this narrative, it is still early for you guys. Narrative is promising, the next action is to choose a project to join.

#RWA