RWA

What are Real World Assets??

Until now, DeFi has been instrumental in the adoption of Web3, with different blockchains, cryptocurrencies and tokens. But it is still a highly reactive and speculative market for the tokens that are traded on the platforms, mainly because the income generated by various platforms is through price variation through speculation. So how can DeFi be less speculative and more globally adopted? This is achieved with RWAs (Real-World Assets)..

RWAs are tokens that represent a real asset that can be traded on-chain (sold, bought, used as collateral for loans, and more). Examples of RWA can be homes (real estate), shares in a company, contracts/warranties, anything with significant value to be used in a transaction, and much more..

The most important thing is to decide the type of token to use. If it's fungible, we could tokenize a property into 10 parts and each person could buy a part of that property. If we choose to be non-fungible, we will tokenize the property into a single NFT, which will represent that we own the property and could use it to borrow and secure the NFT (with real value)..

Speculation in DeFi has been one of the main drivers of its use, even in bear markets. But the integration of non-crypto native assets will have a strong impact on the new use of DeFi. This integration will make DeFi a competitor on a par with banks and other financial institutions (so far, DeFi is David and banks are Goliath)..

The RWA will allow to eliminate the traditional restrictions that count many assets to be transacted, for example, a person could buy a house in another country with almost zero bureaucracy. They will also help a person apply for microloans using his car as collateral, commercial office debts can be financed through contract tokenization, among many other uses you can imagine..

Imagine exchanging part of your property for a block of shares in a company through Uniswap, borrowing those shares on Aave, and then generating some return on the money obtained, paying off the loan, and then repossessing the part of your borrowed property. . This is a business that, although it has risks, will be less speculative due to the backing of the assets..