What I Learned at Token 2049 Insights From the Heart of the Crypto Revolution

For example, the Total Tokenized Value by Type of Asset chart gives you a feel for the market size, where attention is focused, and where the https://www.xcritical.com/ potential exists. You can use these visuals to guide your research strategy or to zero in on specific assets or sectors. This shift is about transforming how we view asset ownership and trading strategies – making it transparent and fully queryable in ways we’ve never seen before.

🐝 Chainlink Labs & MIT 🎈* blockchain * smart contracts * web3 🔑

This could be the catalyst that propels crypto from a niche interest to a global force for good. The DeFi ecosystem, with its myriad of protocols, platforms, and financial instruments, can be a maze for newcomers. The intricacies of smart contracts, yield farming, liquidity pools, and more can be overwhelming, even for those familiar with traditional finance. Simply put, tokenizing real-world assets is a process whereby physical rwa crypto investments like property, precious metals, and collectibles are converted to digital tokens on the blockchain.

The collaboration delivers a novel real-world asset tokenization use case of Chainlink’s proof-of-reserves minting…

• Tokenized RWAs have the potential to fundamentally change the landscape of decentralized finance.
• 🧇 Partial Ownership — Tokenization allows assets to be split into smaller, more affordable tokens.
• Blockchain’s intrinsic consensus mechanisms allow for atomic settlement without third-party clearing agents, a significant departure from conventional clearinghouses and Central Securities Depositories (CSDs).
• As a blockchain-agnostic platform, Chainlink enables RWAs to remain connected to all the necessary offchain data through services such as Proof of Reserve, Functions, and Data Streams, regardless of which chain they land on.
• Previously known as the T-Rex Protocol, the proposal was first unveiled on July 9th 2021 by Joachim Lebrun, Tony Malghem, Kevin Thizy, Luc Falempin, and Adam Boudjemaa.

Critically for institutions, CCIP provides a single integration gateway to connect backend infrastructure to blockchain networks. In doing so, institutions are able to save time, cut costs, reduce risk, and launch new products faster since they don’t have to directly integrate with each individual chain. They only need CCIP as an abstraction layer that connects to and across all chains.

RealT offers fractional real estate investment in tokenized assets. Real estate tokenization offers asset ownership…

As a blockchain-agnostic platform, Chainlink enables RWAs to remain connected to all the necessary offchain data through services such as Proof of Reserve, Functions, and Data Streams, regardless of which chain they land on. In parallel, CCIP enables the secure transfer of RWAs between blockchains, while asset issuers and holders have the assurance that the golden onchain record will continue to be updated. As a blockchain interoperability standard, the Chainlink Cross-Chain Interoperability Protocol (CCIP) will serve a similar role to TCP/IP.

Why are financial assets seeing so much traction?

🌴 The beauty of Institutional DeFi is that it’s not just a buzzword; it has real-world benefits. For those who issue financial products, investors, and even established financial institutions, this could mean saving a ton of money. Recently, SWIFT published an updated report about their recent collaboration with #Chainlink & 12+ of the largest financial institutions on using CCIP for blockchain interoperability.

However, the collapse of undercollateralized algorithmic stablecoin TerraUSD showcased the difficulty and risk of straying from the tried-and-true USD-collateralized stablecoin model. Other decentralized (overcollateralized) stablecoins, such as MakerDAO’s DAI, have begun to incorporate other USD-collateralized stablecoins and real-world assets (RWAs) as collateral in order to maintain a $1 peg at scale. Stablecoins provide a superior version of the dollar, one that is natively digital, programmable, composable, and atomically settled. More importantly, USD-collateralized stablecoins do not require a constant inflow of capital or speculation to sustain themselves. With direct redeemability and full collateralization, the supply of stablecoins can scale up and down as the market requires without issue. Tokenized real-world assets have been a growing segment of the DeFi ecosystem, with RWA total value locked sitting at ~$5B in December 2023, according to DefiLlama.

Asset originators can mint an NFT token on Centrifuge that represents the asset they want to use as collateral. They hand over these tokens to the Issuer, a legal entity known as SPV, which manages the pools and issues senior/junior tokens to investors. The NFTs can have their own private pool or be mixed in with other assets to create a single pool. Degens can literally gamble their property away by using the tokenized version as collateral.

MEXC remains committed to advancing the MX Token’s value through strategic initiatives like buy-backs and burns, partnerships, and community involvement. For traders, the MX Token represents more than an asset; it’s a gateway to exclusive benefits and an ever-evolving ecosystem. The structured allocation of locked tokens is vital to the continuous growth and stability of the MEXC ecosystem. By strategically reserving tokens for innovation, partnerships, and team operations, MEXC aims to drive long-term success and sustainability. With this latest burn, the total amount of MX tokens permanently removed from circulation has reached 578,218,166 MX Tokens.

The synergy of progressive regulation, technological advancements, and better transmission mechanisms is promising for the future adoption of RWA tokenization. Most of the on-chain demand for RWAs is driven by a small number of native crypto users, as opposed to new crypto adopters or traditional investors moving onchain. The average age of user addresses interacting with RWA tokens predates the creation of these assets on-chain, and highlights that the average RWA holder has already been transacting on-chain for some time. In the next section of the report, we will breakdown the growth observed in tokenized private credit, real estate, and Treasuries/ other bonds. We will also explain the differences between these types of RWAs and their yield generating qualities. Enabling data and value to move together across markets and between institutions is a major step forward for the global financial system, which previously required information and value to travel separately, existing within fragmented silos.

Tokenizing real-world assets offers numerous advantages, with enhanced liquidity being a key benefit. Unlike traditional markets that operate within fixed trading hours, blockchain technology enables 24/7 trading, giving individuals greater flexibility in managing their investments. Tokenization stands out as a fascinating facet of the blockchain ecosystem, representing the conversion of assets or utilities into digital tokens. Real world assets (RWA) involve the tokenization of tangible assets with clear monetary value, such as gold, real estate, and carbon credits, into tradable digital formats. While most loans issued on DeFi lending protocols are overcollateralized, the loans issued for tokenized private credit loans may not be. The implications of these risks will be further discussed in the Outlook section of this report.

By doing so, it’s possible to create separate, liquid markets for these elements, leading to further price discovery and appreciation of specific parts of the asset. The DeFi landscape, while innovative, has often been criticized for being too insular, with many platforms and protocols catering primarily to crypto enthusiasts. The introduction of RWAs can expand the horizons of DeFi, bringing in a fresh wave of assets, participants, and opportunities. In summary, tokenizing real-world assets on the blockchain offers a more democratic, efficient, and transparent form of investment, making it an attractive option for both investors and asset owners. 🛠Cross-chain messaging protocols make it possible to build super-cool decentralized apps (dApps) that work seamlessly across various blockchains. Unlike multi-chain dApps, which are like separate islands each running on their own blockchain, cross-chain dApps connect these islands, allowing them to talk to each other.

The principle of digitizing assets is known as tokenization, which is the process of turning an asset, either real or virtual, into a token that represents the entirety of an asset that can be manipulated on a blockchain. Digitizing assets creates a bridge between RWAs and their transfer and trading storage in a digital world without the need for an intermediary. Algorand’s low transaction fees and ability to handle thousands of transactions per second ensure cost-effective scalability for tokenized assets. The platform’s no-forking architecture provides true transaction finality, while its 100% uptime since launch guarantees constant accessibility for RWAs. How much longevity the projects that we covered in this article have in the long run is still anyone’s guess.

Any form of calamity, be it a market crash or extreme weather may seriously jeopardize the asset itself. Meanwhile, its digital counterpart may encounter smart contract bugs, and hacks to the platforms storing or issuing the tokens. Conversely, investors can have the option of investing in other businesses in another country if they so wish. Currently, the only way for investors to invest in another country is through government bonds issued by that country or buying ETFs of particular sectors that are chosen by asset managers. This is useful in regions where corruption is rampant and a lot of the official investments from overseas do not necessarily make it back to the community but rather, into some government officer’s pockets.

This greatly reduces any unforeseen external regulatory risks that could pose a threat to their offerings or even to the platform itself. You could say that compliance and regulation are baked into the token from day one. One of its star products is the OUSG fund, a tokenized version of BlackRock’s iShares Short Treasury Bond ETF. It used to be that you could stake MPL to earn yield and the lending pools would accept both USDC and MPL tokens. However, what the team has found is that token holders dump the MPL token when things don’t go well, thus causing the token to lose its value, which affects the lending amount.

The views and opinions expressed in this article are solely those of the author(s) and do not necessarily reflect the official position of Dune.If you would like to contribute to Dune blog, please contact For example, a tokenized stock should theoretically confer all the same rights and obligations as the paper certificate. Privacy Policy.Security products and services are offered by Galaxy Digital Partners LLC, a member of FINRA and SIPC.