Real World Assets (RWAS): The Future Of The Crypto Sector According To Blackrock

BlackRock sees the future of crypto in Real World Assets (RWAs), which include tokenized real estate, gold, and stocks. RWAs offer sustainable returns with minimal risk, unlike typical cryptocurrencies. Key RWA projects include Centrifuge, Ondo Finance, Securitize, Goldfinch, TruFi, Polymesh, and the upcoming Backed Finance.

BlackRock, the massive asset manager with a $10 trillion portfolio, is bullish on cryptocurrencies, but not on XRP or USDC. The company’s focus is on a niche sector called Real World Assets (RWAs), which includes a wide range of assets that can be tokenized and transferred onto the blockchain. Let’s find out why BlackRock is so interested in this sector and which RWA projects might be appealing to investors.

Why is BlackRock bullish on RWAs?

Real World Assets encompass assets such as real estate, gold, artwork, stocks, and virtually everything that exists in the real world. Tokenizing these assets and transferring them onto the blockchain allows for the benefits of decentralized finance (DeFi) like fractional ownership, global liquidity, 24/7 trading, and increased transparency in markets.

The added value of RWAs is that they offer sustainable returns with minimal risk, unlike the more speculative investments typical of cryptocurrencies. In 2022, the total value locked in RWA protocols exceeded $2 billion, with forecasts indicating growth to $10 billion by the end of the year and $16 trillion by the end of the decade.

RWA Projects to Keep an Eye On

• Centrifuge: This project uses a securitization process to bring various types of RWAs onto the blockchain, ensuring that they are fully collateralized. Centrifuge supports assets like invoices, mortgages, and microloans and has already raised over $200 million through BlockTower and MakerDAO.
• Ondo Finance: Allows investors to purchase high-yield government and corporate bond tokens. The Ondo token is not yet available on the market.
• Securitize: Helps companies raise capital through asset tokenization, but does not have a token of its own.
• Goldfinch: Focuses on financing businesses in emerging markets and aims to bring global lending activity onto the blockchain. Goldfinch’s token is GFI.
• TruFi: Deals with unsecured loans using an on-chain credit score in the lending process. TruFi’s governance token is TRUE.
• Polymesh: An authorized blockchain specifically designed for security tokens.
• The PolyX token is used for staking, paying fees, and governance. Backed Finance (not yet launched): Will create ERC-20 tokens that track popular stocks or ETFs, allowing users to hold tokens that follow companies like Google or Tesla in their MetaMask wallet. However, US investors will not be able to participate due to SEC restrictions.