Driving the next wave of innovation in DeFi? How high is the ceiling of RWA narrative?
Original source: Sammi Ximi (Twitter: @ximi_eth)
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What are RWAs?
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stable currency
stable currency
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synthetic token
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loan agreement
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Who is driving the RWA narrative?
Putting aside the drive of profit, talking about narratives is tantamount to playing hooligans.
Every big track needs capital to build momentum before it breaks out. RWA is gradually gaining momentum, which reflects that the old narrative markets such as Web3 and metaverse that have been popular in the past two years no longer buy it, and it is difficult to obtain financing in the primary market. In addition, the DeFi industry has entered a deep bear, and capital urgently needs to find new outlets.
Narrative is the driving force for the financial market. If an industry wants to continue to develop, it needs to continuously increase capital and user admission. The upstream and downstream of the encryption industry are mining circles-exchanges/investment institutions-project parties-media-community-retail investors. The rise of RWA is a model of "top-down" narrative creation by capital and institutions:
Binance Research Institute's report "RWA, a bridge between TradFi and DeFi" released on March 2, 2023
Goldman Sachs (Goldman Sachs) launched GS Dap to tokenize traditional assets;
The Monetary Authority of Singapore is testing asset tokenization through Project Guardian;
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......
How high is the ceiling for the RWA narrative?
The birth of any phenomenon-level enterprise/project is an explosive growth, and the explosion must come from a blank. The so-called gap means that the restrictive conditions that once constrained the market have changed, and the ceiling that suppressed the market has been opened. A new layer of market space appeared, and there was no one there.
For players advocating the RWA narrative, we can see such an argument: RWA is the bridge for DeFi to enter the next incremental era, expanding DeFi to the world, and RWA is the next wave of large-scale innovation in DeFi.
From the data point of view, the current total market value of the cryptocurrency industry is about 1.2 trillion U.S. dollars (according to coingecko, 2023/4/25), the global real estate market is about 228 trillion U.S. dollars (according to Statista data), and the total market value of gold is about 12.4 trillion U.S. dollars. The total size of the global bond market is about 133 trillion US dollars.
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(Data source: DEFELLAMA)
RWA aims at the trillion-level incremental market, trying to tear a hole from the traditional financial market and inject massive liquidity and broad market opportunities into the DeFi market.
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How to confirm the arrival of the RWA narrative?
Because RWA has enough room for imagination, the incremental market it can bring is very considerable, and it can be classified as the same level of macro narrative as AI and Metaverse. Such large narratives are usually driven from the top down.
Suppose we derive the general conduction links of large narratives:
The first stage: key events/phenomenal products are launched, and narratives emerge;
The second stage: Capital and the media began to build momentum, and various research and articles appeared. At this stage, the market began to "shift its attention";
The third stage: the first batch of Alpha players with a keen sense of business began to ambush in Dex or exchanges, and the effect of making money diffused in a small area;
The fourth stage: Whales are gradually deployed, and the leading coins of capital pulling attract the attention of the market. RWA-related currencies have climbed the rising list for several days in a row, forming a sectoral profit-making effect. The public players gradually confirm that the RWA narrative has arrived;
The fifth stage: Some non-native RWA track but active project parties in the secondary market began to take advantage of the RWA concept, taking the opportunity to hype, the primary market entrepreneurial projects began to add RWA or directly transform, and a large number of projects carried out "track" at this stage transfer";
The sixth stage: The entire encryption market has entered the Fomo stage. Twitter Space, summits, and various Web2 and DeFi cross-border cooperation phenomena emerge in endlessly. With the support of the whole market, several phenomenon-level projects may emerge, which will truly inject DeFi It has brought new market vitality and brought incremental funds to the market. The valuation of related concept projects has repeatedly hit new highs. The market value of RWA leaders has entered the top 20 (due to the high ceiling of RWA, it will inevitably support the market value of leaders to enter the top 20). Called a "paradigm shift" or "paradigm revolution".
The process of paradigm shift: shift of attention - shift of track of a large number of projects - shift of paradigm.
The narrative is not a product of linear development, so its transmission link cannot be perfectly deduced in accordance with the text, and investment strategies need to be adjusted in a timely manner in light of the actual situation.
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What programs does RWA have?
In the classification of RWA, in addition to stable currency, synthetic assets and credit, the most common ones are related to real estate, carbon credit and fixed income.
RWA concept project:https://coinmarketcap.com/watchlist/
RWA data analysis website:https://app.rwa.xyz/#protocols
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there's nothing new under the sun
The most popular real estate tokenization in RWA is similar to the "Shenfangli" model in 2021, that is, Pinduoduo crowdfunding to buy a house, 100,000 can participate in the investment of tens of millions of luxury houses, and Shenfangli acts as a middleman on behalf of participants Hold real estate and draw commissions from it. If the user has no funds, Shenfangli also provides loan services, making full use of the fragmented funds of the society and idle people from all walks of life, and truly achieving zero threshold. This mode of real estate speculation made Li Ka-shing silent. Wang Jianlin Hearing tears.
Real estate tokenization brings this speculative on-chain, with the value of tokens derived from the ability of statistical activities to generate income.
The idea of RWA trying to break the encryption circle and innovate and open up the incremental market is commendable, but in practice, we should also take into account the clarity of policy supervision, the attitude of traditional enterprises towards asset tokenization, and the related infrastructure for realizing RWA These factors are the key to determine the development of RWA.
