We are all living in a world where owning a slice of real estate, investing in rental income, or holding a piece of historical art is being made as simple as purchasing a cryptocurrency. This reality was brought to you by the tokenization of real-world assets (RWAs). This tokenization process is changing how we think about ownership, investment, and financial liquidity by bringing these assets into the digital space through blockchain technology.
With the current TVL of Real World Assets sitting comfortably at around $4,35B, one can only imagine how this industry category may develop over the next bull cycle. Is exposure to RWA’s a must for every future-proof blockchain user and DeFi platform?
The future-value² of Tokenized RWAs
The horizon for tokenized RWAs is promising, to say the least. Larry Fink (CEO of BlackRock), in a recent interview, shared an interesting outlook on ETFs that aligns closely with the trajectory of tokenized RWAs. Fink also states: “We believe the next step going forward will be the tokenization of financial assets, a sentiment which perfectly aligns with the principle of tokenizing real-world assets.
Watch the interview
As of now, the tokenized RWA sector is experiencing unprecedented growth. The year 2023 marked an absolute milestone, with TVL soaring from $750 million in January to a peak of $6.2 billion around November. Like NFTs, RWAs encompass diverse assets with distinct use cases and go-to-market strategies (GTM). Stablecoins, gold, bonds, & equities all have different GTM and varying contributions to the overall value of the space.
Nonetheless, the explosive 2023 growth reflects large confidence in the tokenization of a wide variety of assets, offering investors access to previously illiquid value. This recent Bank of America report forecasts RWA tokenization to reach a value of $16 trillion over the next 5-15 years. That is roughly equivalent to 8 times the total market capitalization of Bitcoin at this time of writing.
Saying Hi to RWA Yield on the Avalanche Blockchain
RWA platforms are found on a wide range of blockchains. In particular, asset tokenization on the Avalanche blockchain has been backed by the $50M Avalanche Vista initiative since July 2023. The Vista initiative aims to accelerate the massive growth of tokenization and its role in on-chain finance (OnFi).
HiYield is one such promising tokenization initiative, extending its reach by enabling users to access yields from tokenized US treasury bills among other assets on the Avalanche blockchain. This tokenization and subsequent distribution offer an accessible, secure, and efficient means to enter the world of government-backed securities. By integrating the stability of traditional financial instruments with the agility of blockchain technology, HiYield is setting a new standard for on-chain investments. Users can easily invest and benefit from competitive on-chain rates for Treasury Bills. It might not come as a surprise that Avalanche's dedication to accessibility, efficiency, and cost-effectiveness perfectly aligns with HiYield’s mission, with the Avalanche Evergreen Subnets holding immense potential for global value transfer. Led by a team with deep expertise in traditional banking and blockchain, HiYield presents an efficient way to engage with capital markets on-chain.
Pioneering Cross-Chain RWA Utility
Enter Balanced, a DeFi platform that finds itself in a unique position by any 2024 standards. Balanced fully leverages ICON's innovative Cross-Chain Framework and has recently celebrated an alignment of incentives with the ICON blockchain, leading to more rewards for users and liquidity for the platform. The Balanced approach is to offer intuitive native cross-chain swaps that somehow ignore all the traditional cross-chain difficulties that users often find themselves dealing with. Healthy liquidity for swapping pairs is guaranteed by the ICON Network as part of the aforementioned incentive alignment. In turn, Balanced trading fees are partially directed towards the burning of ICX tokens.
As early as last week, Balanced introduced its users to their novel Balanced savings rate, and their next upcoming cross-chain development involves tapping into HiYield’s RWA offerings on Avalanche. This collaboration with HiYield is set to broaden the way Balanced backs its native stablecoin savings rate. By indirectly channeling the yields from HiYield's RWA ventures, Balanced is ensuring that the bnUSD savings rate is not just competitive but also boosted by the tangible performance of real-world assets. For bnUSD holders, this translates to earning higher yield percentages simply by locking in their stablecoins, turning the act of holding bnUSD into a profitable strategy.
After its latest successful Archway blockchain deployment, the strategic partnership with HiYield provides another cross-chain proof of concept for Balanced. It underlines the effectiveness of the Balanced platform’s hub-and-spoke strategy for cross-chain deployments. Users of Balanced will soon get indirect exposure to the benefits of the RWA movement thanks to HiYield on Avalanche.
Conclusion
It's clear we are witnessing a fresh wave of blockchain innovation, where diverse value propositions are being blended across blockchains in order to give end users the best possible experience.
With projections valuing the future RWA space at a staggering $16 trillion, promising platforms like HiYield continue to innovate on their mission to offer accessible, secure, and efficient means for users to enter this world of tokenized assets. At the same time, DeFi platforms like Balanced are offering their users exposure to RWAs by recognizing the value of tokenization and removing cross-chain barriers.
It looks like the future isn’t just bright; it is shining rays of tokenized possibility! Follow HiYield and Balanced on X for the latest news on the cross-chain RWA integration.
