The value of all crypto assets has increased significantly in recent years, and by November 2021, it will be worth over $3 billion. The bitcoin market is poised to continue the trend and experience explosive growth in new sectors.
The real-world asset sector (RWA) is expected to change the direction of emerging businesses, claims a decentralized finance specialist with the nickname “Edgy”. By 2030, Edgy predicts that the market value of real-world assets could reach $16 trillion, which will serve as a catalyst for cryptocurrency adoption.
Real world assets including real estate, commodities and other tangible assets are tokenized by the real world asset sector using blockchain technology. Tokenization refers to converting ownership of assets into digital tokens that can be sold on blockchain-based platforms, opening up assets to additional potential investors.
Blockchain-based platforms are used to build digital representations of physical assets to mark them. Investors can buy and sell the smaller units, or tokens, that make up this digital representation. Assets can be exchanged on cryptocurrency exchanges like any other asset once pegged.
Given this, Edgy argues that certain elements can serve as a “catalyst” to help the real-world asset sector grow and reach its goal of reaching $16 trillion by 2030. Some of them are as follows: There are rumors that Amazon’s NFT is asset-related physique. According to reports, the US multinational conglomerate intends to introduce its own NFT platform, which may be linked to physical assets.
In addition, Goldman Sachs introduced the GS Dap to mark conventional assets. Top financial institutions have launched GS Dap, a blockchain-based platform that enables traditional assets such as loans and bonds to be pegged and traded on a blockchain-based platform.
Similarly, a $60 million bond from Siemens, a technology business, has been pegged to the Polygon Network. The promise of a blockchain-based platform for the crypto and real-world asset sector is demonstrated by this bond, which is the first corporate bond issued using blockchain technology.
The potential of the real-world asset sector and its capacity to develop and impact various aspects of the global economy may be far greater than the “catalysts” discussed previously. Circle CEO, Jeremy Allaire, predicts that tokenized assets and contracts will spread over the next five to ten years.
The revelation that Homebase, a business specializing in tokenized real estate, had successfully sold its first tokenized rental property on the Santander blockchain in less than two weeks was the direct cause of Allaire’s statement.
Edgy highlighted the advantages of the real-world asset sector, such as reduced fees, increased accessibility for smaller investors, and increased access to funding through tokenized assets, in addition to the possible growth in the cryptocurrency business.
By tokenizing assets, the RWA sector eliminates intermediaries such as brokers and other rent-seekers and allows direct ownership and trading of assets. An investor can acquire part of the property if they are unable to purchase the complete item.
Additionally, tokenized assets can be used as collateral for loans, which can help companies that may have difficulty obtaining traditional forms of funding. This is advantageous for companies operating in developing regions where access to money may be restricted.
In general, the advantages of this sector include increased accessibility and liquidity of assets that are usually illiquid, lower transaction costs, and more effective acquisition and disposal of assets. Further gains are likely to emerge as the market develops, driving expansion and acceptance of the sector.