I am always open to new things in crypto.
When I came across this, it blew my mind.
Tokenization of real-world assets will be a 10+ trillion dollar market.
You may think: I read a lot of words, but what do you mean? Please, let me explain the terminology:
- Tokenization: Splitting one big thing into pieces. The pieces are (crypto) tokens that can be purchased.
- Real-world assets: Value things that can be owned. Some examples are loans (with you as lender), property, company shares, and art.
- 10+ trillion dollars: Way too much money.
Crypto is working together with real-world assets (RWA). And that means those crypto assets have a great upside potential in the bull market.
Let me explain to you why RWA can be a huge potential for the upcoming bull market.
RWA explained
In traditional finance, most people invest directly in tangible assets: buying a property, acquiring shares in a company, or investing in a piece of fine art.
Most of the time, you need quite a lot of money to purchase these investments, and they are not easily split into pieces or fast to sell.
This is where the crypto world is stepping in with a game-changer called Real World Assets.
Tokenization is the spotlight of RWA in crypto.
Imagine every asset can be split into a million pieces. Tokenization does that.
By converting real-world assets into digital tokens on a blockchain, they can be owned in fractions, just like owning a small slice of a pizza.
This slice is your share, and because it’s digital, you can trade it online, just like cryptocurrencies.
The key points of RWA:
- Accessibility: It opens the door for average investors to put money into high-value assets that were previously out of reach.
- Liquidity: These digital slices can be traded more freely than the actual assets, making it easier to cash in or out.
- Transparency: The blockchain’s ledger keeps a clear record of who owns what. No more shady deals.
- Efficiency: Smart contracts cut out the middlemen, streamlining everything from dividends to ownership transfers.
Eventually, more people in the world can be part of the solid real-world
investments without having to put down a lot of cash.
The benefit I love the most is that decentralized finance (DeFi) is based on real assets and not an “empty” inflammatory crypto coin.
If the underlying asset is a rented house or a load that needs to get paid
back, you will receive money by lending money.
There are still some challenges.
RWAs are innovative, but they’re navigating uncharted waters. Legal frameworks are still catching up, and when disputes arise, it’s a complex mix of old laws and new technology.
Solutions include built-in dispute resolution in smart contracts, engaging with regulatory authorities, and even incorporating traditional legal systems to manage and resolve conflicts.
RWAs in crypto are transforming how we invest in real assets. They’re bridging the gap between the old and new financial systems, offering inclusivity and opportunity.
We are very early, and there are a lot of great opportunities out there.
Here are my picks for the next bull run:
1. Centrifuge
One coin I really like is Centrifuge (CFG). Centrifuge provides on-chain credit on the PolkaDot ecosystem.
They finance real-world assets by lending capital without a bank or other intermediary.
Companies that need capital can get capital more easily and with lower fees.
Lenders have full transparency and can earn a good amount of money by lending their capital.
2. SOIL
Another coin I’m keeping my eye on is SOIL. This token is quite new. SOIL has a similar use case as Centrifuge.
Soil lends money to small and medium-sized businesses and gives you up to 14% APY – 6% in SOIL token and 8% in USDC.
There are two benefits I love about SOIL:
- Fully backed by RWA, managed by companies that have been loaning credit very long and are fully regulated.
- SOIL is deflationary. Meaning that the circulating supply will decrease over time, eventually making the coin worth more.
Eventually, SOIL is a very stable way to earn APY. I think it will do great in the next bull run. Who knows, maybe a 10x or even more?
What is the next step?
- Create an account at an exchange that provides RWA (KuCoin, MEXC, ByBit, and Binance)
- Dollar-cost average weekly a small amount of RWA
- Move the coin to your (hardware) wallet
- Set price alerts to take profit.
Just be aware that you should never invest more than you can lose. And
mostly, altcoins are way riskier than $BTC and $ETH so be careful out there.
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Be the hero of your own crypto journey, and stay safe.
Daniel Donselaar
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P.S. This is not financial advice. Please use this as an educational source.
You are solely responsible for making your own decisions when investing in crypto. You can have great wins but also great losses.
