Dynamic Potential of Real-World Assets: How Can You Be A Part Of It?
Bitcoin and other digital assets are finally back to where they belong since the end of 2021 and the excitement within the DeFI Space is at an all-time high. If history is anything to show for, these moments are filled with new innovations which will define a new era moving forward for space and we could be on the verge of one with Real World Assets. Let’s look into the exciting world of Real World Assets Tokenization and discover how you can be a part of the revolution!
An Exciting New Era of Real-World Assets
The question in everybody’s mind during the mid-2010s was whether Bitcoin and other blockchain project a Digital Currency or a Digital asset. This is still a strange case until now as Bitcoin was designed as a digital payment method tracing back to its whitepaper which was meant to be the alternative to our fiat currency. Over the years its soaring value is what led to a shift in an ideology with Bitcoin currently deemed as a Digital Asset.
Bitcoin and other digital assets obviously still retain their enormous capability to facilitate easier digital payments worldwide and its adoption in El Salvador is an example of its potential but its aspect of Digital assets is what is in the spotlight. It is easy to understand why Bitcoin has been the best-performing asset across the decade and the recent approval of Spot ETF represents an idea of the community moving the idea toward Digital Assets.
Bitcoin and other digital assets obviously represent something unique in the financial world as it is the only asset that can be used as an efficient payment method while also being able to perform as a store of value. It is a hybrid that nobody expected would arise but it also suffers the challenges of gaining both aspects at the same time as its volatility makes it a less reliable digital currency and not a stable store of value in the long run.
This is the reason why concepts like Stablecoin are introduced within the DeFI Space as it focuses on just the Digital Currency aspect. Stablecoins like USDT and USDC is an efficient payment method that is able to do worldwide transactions in a matter of minutes and their 1:1 peg to the US Dollar means their value is going to be stable but less attractive as a digital asset. This is why USDT and USDC are mainly used as on-ramp facilities for users within the exchanger platform or as global payment methods.
The success of Stablecoin introduced the DeFI Space to the concept of Tokenization and its unlimited possibility in other aspects of our daily lives. Stablecoin derives its value from the reserve of asset/currency held by the developer and for every token you hold there should be an equal reserve backing it up. This represents the early application of the concept of tokenization which will soon be popularized by Real World Asset in 2017.
Blockchain technology still presents itself for its security and reliability which is why many innovations are done to maximize its application. Real World Asset tokenization is among the most promising use cases for blockchain technology, with its potential market size encompassing nearly all human economic activity. The idea behind Real World Asset Tokenization is to create on-chain tokens which will be a digital representation of the ownership right of the underlying asset to enable better on-chain management and bridge the gap between physical & digital assets.
In this idea there is plenty of benefit that comes along with the concept of Tokenizing Real World Assets:
- Liquidity: With the active market of the DeFI Space, any real-world asset will gain a major boost in liquidity if it’s tokenized on-chain. This would be a breakthrough for plenty of illiquid assets such as real estate or bonds and will also attract traditional investors of those asset classes to the DeFI Space so the benefit goes both ways.
- Transparency: The tokenization of the assets to the blockchain network, it will ensure better transparency for all its holders and should reduce the amount of risk or leverage that is associated with the asset.
- Accessibility: The most potent benefit of the tokenization of Real World Assets is the global user base the asset can derive from being available on-chain. Blockchain-based applications will also broaden the set of users that would previously be unable to own the asset through the concept of Fractional Ownership.
The Era of Real World Asset Tokenization continues to be brewing in 2024 with plenty of institutions getting into the space to help facilitate the adoption. Existing adoptions include JP Morgan’s Tokenized Collateral Network (TCN), a private blockchain app that allows the tokenized representation of collateral assets (such as tokenized Money Market Fund shares) to be transferred on-chain. The Real World Asset on — chain market is expected to hit $10 Trillion by 2030 with numerous projects continuously experimenting with plenty of asset classes.
The potential is obviously limitless when we take into account its adoption but its recent surge has been attributed to plenty of factors:
- The Need for Real Life Adoption: Blockchain technology was designed to ease our daily lives and the need for the adoption to apply to our daily lives has never been greater. The future of finance will be on — chain and its adoption will be viable to how it can empower greater inclusion for our global population.
- Less Volatility and Unpredictability: An asset whether its digital or not should be able to be an efficient store of value and the current digital assets are unpredictable over the long run. It’s more important than ever to pair the potential of blockchain technology with a stable and matured asset to solve this volatility issue.
- More Yields: With the DeFi yields having fallen dramatically since the days of the surging bull market, the prospect of tokenized RWAs presents a new possible source of yield for its Users to stake their assets and earn a return.
The growing presence of Tokenized Real World Asset is also not without its challenges as custody of the physical assets and smart contract vulnerabilities continues to be a question remaining to be solved. Despite all this, we are still in the early stage of this dynamic shift towards Real World Assets and the DeFI Space will be brimming with innovations that would enhance its adoption but the question is will you be a part of the movement?
How can you seize the opportunity?
The Real World Asset Tokenization is stacked with exciting projects that are exploring the capabilities of its adoption. From Commodities to Real Estate, some innovations are offering you an opportunity to be a part of a future where physical and digital assets are united. With every innovation or new era of the DeFI Space, it is going to be a wild ride to pick the good, valuable projects from the others who are just not worth looking over.
We obviously saw this with the previous Era of NFT where there was a cascade of new projects every day with the NFT brand but most of them are deemed worthless as 2022 comes around. This is why it is imperative than ever to do your research early about the projects within the Tokenization of Real World Asset Space to know their potential over the long run and the challenges they might have to face during the journey.
This will provide you with a concise idea of the project you should HOLD at the unfolding of this New Era and how long will take in the journey to reach its full potential. With this research, you will also be able to point out who the pioneers are within this space and who are just creating a project to follow the trend without having the sustainability to remain in the game. Focus on its fundamentals and its developments to get to the top.
We from the Nagaya Technologies Pte. Ltd is proud to be amongst the pioneers within the Tokenization of Real World Asset space. The award-winning concept behind the “Nagaya Method” was developed in 2018 as we understand the need to realize the potential of Blockchain technology with the support of Real World Matured Asset in order to provide sustainability over the long run. Nagaya becoming the World’s First Hybrid Digital Asset continues our commitment to expand real-life adoption of Blockchain Technology. Intrigued to know more about Nagaya, you can visit us at www.nagaya.co
Or you can obtain your Nagaya now through the Latoken Platform at https://latoken.com/exchange/NGY_USDT
