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Europe's Answer to Business Blockchain and RWA Needsby@mickeymaler
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1,155 reads

Europe's Answer to Business Blockchain and RWA Needs

by Mickey MalerMarch 11th, 2024
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There's promising news from the European blockchain scene: a business-focused platform is making strides in Real World Assets (RWA) integration. With a solid track record in enhancing data privacy and streamlining workflows, this platform is well-positioned for success in DeFi and RWA tokenization. Its innovative approach, including Live Contracts and decentralized identity management, suggests a bright future for financial inclusivity and market access.
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Much like the roads need traffic lights and modern states would not work without the rule of law, every blockchain for business use needs to adapt and evolve based on feedback and real-world needs.


We are witnessing the era of mature blockchain applications, and this article aims to demonstrate this. While this piece won't necessarily make you wealthy, it will inform you that the combination of real-world assets (RWA) and DeFi liquidity is rising and that the European-led blockchain for technology and business applications is poised to flourish in this domain.


NOTE: This article continues my series documenting the evolution of leading European blockchain technology, which I have contributed to since 2019 and is available on Hackernoon for reading.



Is the Crypto Market Ready for Real World Asset Tokenization?

What exactly is RWA, and is the crypto market ready for it? RWA represents a digital or tokenized form of real-world assets, enhancing their usability and integration within the crypto and DeFi ecosystems. The key advantage of RWAs is the secure blockchain management of ownership, potentially transforming various sectors. Initially, blockchain solutions attracted limited institutional interest due to market immaturity. However, we're now observing the beginnings of a significant shift. Tokenization facilitates seamless asset transfers without relying heavily on intermediaries, embodying blockchain's core principle of unlocking new possibilities. As the technology and perception of crypto evolve, what was once reserved for corporations or required intermediaries is now becoming accessible to wider audiences. This change democratizes access to previously exclusive markets, significantly advancing financial inclusivity and empowerment.

Is It Possible to Bridge Real-World Business Operations with Blockchain Technology?

To significantly impact real-world business operations, blockchain requires a robust and efficient infrastructure that fosters collaboration and streamlines processes. A platform must bridge the digital realm with practical applications, ensuring comprehensive decentralization while maximizing the potential of blockchain technology. Europe hosts at least one such platform, providing a hybrid blockchain known for its advanced solutions in decentralized data security, digital identity management, and the integration of digital with real-world assets. Named LTO Network, this platform serves many global businesses, governments, and institutions, including the UN and the Dutch government, highlighting its versatility and reliability.


However, beyond mere partnership, the ability to adapt has always been crucial for me with LTO. The history and technological evolution summary follows in the next paragraphs, but the adaptability propelled the project from the Netherlands to its current standing. Starting with process orchestration and automation, then securing and tamper-proofing documents through anchoring, LTO Network expanded its technological portfolio to include DeFi and NFT use.

Their initiative to adapt to trends and broaden their scope rather than narrow their focus led to the creation of the NFT 2.0 movement and the concept of Ownables. While Ownables have their own potential for collecting and verifying NFTs, their tokenization aspect ignited the spark for the next significant step. With the DeFi, money, and RWA narrative emerging as the only genuinely useful use case for crypto, I believe LTO Network has made its last and most crucial adaptation by embracing RWA and integrating it into its platform.


The project has deserved my attention since 2018 because it addresses the following needs:

The Necessity of Hybrid Blockchain Architecture

The effectiveness of blockchain in real-world applications hinges on an architecture that harmonizes security with privacy, thereby ensuring data integrity without compromising confidentiality. A hybrid model emerges as a solution, combining a public layer for decentralization and security with a private layer for efficient information exchange and process automation. Such an approach enhances collaboration while safeguarding privacy and addressing modern data security concerns.


Another benefit of hybrid architecture, where businesses can enjoy the benefits of decentralized technology while maintaining control over their private data and processes, is the scalability element. Because all the data doesn't have to be stored on the public blockchain, this mode reduces congestion and provides efficient transaction speed. Also, LTO Network founders' familiarity with the legal side of things is beneficial when thinking about the private layer, which enables businesses to comply with data protection regulations, such as GDPR, or verifiable data exchange between organizations. Lastly, this decentralized but still controlled environment supports various digital and real-world asset interactions, such as asset transactions, tokenization, verification, etc.

Bridging Technology with Real-World Utility

The true measure of a blockchain platform lies in its application beyond the technology itself, particularly in automating business processes and facilitating seamless collaboration. Features like live contracts and decentralized identities enable digital verification of assets and ensure user privacy, extending blockchain's utility to legal, real estate, and supply chain management sectors. This demonstrates the platform's capability to transcend traditional finance, offering solutions that resonate with everyday business needs.

Forward-Looking Vision

The platform is committed to leveraging blockchain for organizational value, driving toward a future where blockchain technology underpins a decentralized, efficient, and collaborative business environment. This vision is not merely ambitious; it's a requisite in an era demanding digital trust and operational efficiency. As this platform develops, it remains dedicated to equipping businesses with the necessary tools for digital-age success, thereby redefining blockchain's role in facilitating secure, transparent, and efficient business operations. Through continuous innovation and a dedication to its mission, the platform exemplifies blockchain's potential to revolutionize industries and enhance digital trust.


Before explaining what such a business blockchain solution can look like, let’s summarize the history of LTO and its contributions to blockchain technology.


The Technological Evolution Wrap

Before the establishment of LTO Network, there was LegalThings—a centralized document and workflow solution. In 2017, LTO Network emerged victorious at the VenJ Blockathon, an event that marked the beginning of its journey. During the blockathon, a rudimentary decentralized version of the workflow engine was developed. This approach to decentralization involved the distribution of events via a messaging service, with blockchain technology ensuring the integrity of these events. Initially, LTO Network employed the "Data" transaction on the Waves blockchain for anchoring purposes. Subsequently, the decision was made to fork Waves and tailor it specifically for anchoring. The testnet was launched in 2018, paving the way for the mainnet's launch at the outset of 2019, accompanied by a traditional ICO. From its inception, LTO Network founded other entities, such as SignRequest, that also leveraged anchoring on the public chain to enhance security.


LTO Network introduced the Live Contracts concept, which was designed to model real-world scenarios within decentralized technology.

In 2021, the Identities whitepaper was published, acknowledging the significance of new standards like DIDs and VCs in connecting blockchain technology with the real world. After that, LTO Network focused on refining the platform's tokenomics, aiming to cultivate a sustainable ecosystem, culminating in the Juicy update. The advent of the Titanium update broadened its perspective on decentralized ownership, integrating features that facilitate the decentralized management of real-world and digital assets.


This portion of this article discusses the LTO Network as an example of a real-world asset application of blockchain technologies. My intention here is to explain the solution I am familiar with. However, there are other promising competitors in the RWA field, which I mention towards the end of the article.

From Enterprise to RWAs with a European pioneer

Recent blockchain advancements, including the approval of the first Bitcoin exchange-traded fund (ETF), signify a pivotal shift towards integrating digital frameworks with traditional financial systems. Decentralized Finance (DeFi) and Real-World Assets (RWA) have emerged as critical areas, underscoring blockchain's capacity to facilitate tangible asset management and transactions. This shift accentuates the necessity for blockchain platforms that are not only technologically advanced but also adept at addressing complex business requirements.


Focusing on integrating Real-World Assets (RWA), LTO Network's technological prowess offers a comprehensive ecosystem. As one of the world's leading blockchains for business applications, it provides a secure and compliant infrastructure for tokenizing, managing, and transacting RWAs.

Focusing on integrating real-world assets, LTO Network's commitment to technological evolution and its track record of successful deployments paint the image of a foundational player in bridging the gap between blockchain technology and real-world applications.


What I admire the most about LTO Network is its effort to foster seamless integration of RWAs onto the blockchain, highlighting its crucial contribution to the broader narrative of blockchain adoption.

LTO Network RWA 101

  • Essentials: A Layer 1 blockchain designed for RWAs, identities, and decentralized ownership.

    It is known for its "Private Layer," which ensures data security and regulatory compliance.

  • RWA Strategy and Impact:

    • Market Leadership Goal: To lead the RWA blockchain sector, the company targets a market growth of 16 trillion USD by 2030.
    • Presence and Growth: With 1.3 billion USD in RWAs on-chain in treasuries and real estate sectors, LTO Network focuses on reducing centralized tokenization risks.
  • Technological Framework:

    • Innovative Solutions: Provides RWA tokenization and management technologies, incorporating legal frameworks for genuine ownership.
    • Integration and Management Tools: Partners with Firm24 for RWA issuance automation and utilize OWNABLES technology for asset management.
  • Partnerships and Expansion:

    • Collaborative Ventures: Enhances RWA on-chain integration and DeFi liquidity with Unizen, aiming for secure and transparent DeFi participation for institutions.
    • Growth Strategies: Eyes expansion in European and Latin American markets, leveraging its API's reach and Web3 partnerships.
  • Future Initiatives:

    • EQTY Launch: This event will introduce the EQTY platform for centralizing RWA activities and enhancing liquidity connections with DeFi, underscoring a comprehensive approach to RWA ecosystem development.
  • What does it mean for LTO holders?

    • RWA platform built on top of the LTO mainnet + Cooperation with EigenLayer (an L2 for Ethereum, which lets you re-stake your Ethereum for extra rewards)
    • Enlarged RWA-related airdrops
    • Access to investments such as:
      • bar of gold
      • stake of Private Equity (PE) that invests in cryptocurrency
      • stake of Venture Capital (VC) funds that invest in cryptocurrency

Conclusion

LTO Network's strengths in the RWA space lie in its familiarity with the importance of regulations for blockchain and DeFi and its founders' past working experience with legal structures and taxes.


Together, the potential combination of DeFi and RWAs provides the best possible use case for crypto, where blockchain is used to deliver a platform for crypto in the world of traditional money and finance. By leveraging innovative technology and strategic partnerships, it addresses the complexities of integrating Real World Assets with decentralized finance. The platform's commitment to security, transparency, and regulatory compliance ensures its readiness to meet current and future challenges. With a focus on automation and decentralized asset management, LTO Network is positioned to facilitate the growth of RWAs on the blockchain. This capability underscores the platform's potential to successfully bridge the DeFi liquidity and link them to RWA to create a unique ecosystem that rewards LTO holders and increases the token's price.