The fast-evolving realm of decentralized finance (DeFi) now has an even more recent and exciting development: incorporating real-world assets into the blockchain world.
Bringing RWAs into play has become a critical story that has captured the attention of both developers and investors. Such projects aim to close the bridge between old finance and new blockchain-based systems—by tokenizing real-world assets like real estate, commodities, and loans. And then incorporating them into the DeFi systems that are steadily being built.
In a short span of time, RWAs have started gaining a lot of traction. Several projects have even already managed to garner a decent amount of Total Value Locked (TVL) in their respective protocols. DeFi platforms, while still surfacing, now offer a decent overview of the kind of confidence the market has in them based on the kind of TVL they are managing. Here, we take a closer look at the kind of RWA projects that have done well on the TVL front and are therefore serving as decent beacons in the market.
The Top RWA Projects by TVL
As per the information coming from DeFiLlama, which is the top platform for monitoring Total Value Locked in DeFi projects, the leading RWA projects have made significant inroads in increasing their market share. These projects, boasting some truly impressive figures, are in the vanguard of the creation of new liquid markets for $tokenized real-world assets. With just about no curveball hitting them, they have drawn in billions of dollars in capital at a breathtaking speed. Below is a list of the 10 RWA projects that enjoy the highest TVL in DeFi, which is a striking indicator of their burgeoning success.
1. Sky – $1.64 Billion TVL
Sky secures the top spot with a strong $1.64 billion in TVL. As one of the largest RWA projects, Sky has taken the lead in the push to tokenize real-world assets, with a heavy focus on real estate and other physical commodities. The platform’s robust ecosystem—most evident in the wide range of institutions that have started to use it—makes it a go-to for institutional-grade investors that want exposure to the world of RWA through the medium of blockchain.
2. Ondo – $1.00 Billion TVL
Coming in second is Ondo, with $1 billion in TVL. Ondo focuses on the tokenization of financial assets, particularly bonds and other fixed-income products. By providing a decentralized way to access traditional financial markets, Ondo has tapped into the demand for more accessible investment options.
3. Typical – $928 Million TVL
Typical, with almost $1 billion in TVL, concentrates on making asset tokenization a process that is user-friendly and accessible to the masses. Typical is concerned with making the tokenization of real-world assets more liquid and more transparent than it was before. Whatever it is doing seems to be attracting the attention of both retail and institutional investors.
4. Spiko – $186 Million TVL
Spiko, with a TVL of $186 million, is swiftly establishing itself as a major contender in the RWA arena. Spiko’s novel method of tokenizing physical assets is poised to secure a huge market for them, especially in such industries as manufacturing and infrastructure development. Spiko’s apparent real-world business model and ability to address physical asset issues through using the blockchain have set it apart from many competitors.
5. OpenEden – $146 Million TVL
OpenEden has managed to secure $146 million in TVL by targeting the real estate investment market. Almost $146 million reads to me as convincing evidence that customers might be interested in what you have to offer. I don’t know what OpenEden’s expenses are, but if you’re bringing in revenues close to that number, then I know enough not to ignore you.
6. M0 – $133 Million TVL
M0, with a TVL of $133 million, is known for creating tokens out of a vast array of real-world assets, extending well beyond ordinary financial securities to include such things as inventories and supply chain goods. The platform’s approach to asset tracking has a distinctly decentralized flavor, which has led to a good deal of popularity among businesses of all kinds that are looking to achieve more streamlined—and better tracked—supply chain processes and enhance the liquidity of the physical goods that they make.
7. RealT – $133 Million TVL
Matching M0 in TVL is RealT, another project focused on real estate tokenization. RealT has made waves by offering tokenized ownership in rental properties, allowing investors to earn passive income through real estate in a decentralized manner. The project has proven popular due to its innovative approach to creating fractionalized ownership of income-generating properties.
8. Cygnus – $116 Million TVL
Cygnus, with a TVL of $116 million, concentrates on the tokenization of commodities and precious metals. The project endeavors to heighten liquidity in several markets for gold, silver, and other similarly precious assets. Institutional investors are the primary audience for Cygnus, which is attracting their interest and investment because it allows them to diversify their portfolios with tokens representing the actual commodities. Whether or not they actually use the tokens for buying and selling the corresponding assets, the effect is to create more liquidity in the precious-metals markets.
9. Superstate – $92.3 Million TVL
Superstate has amassed a TVL of $92.3 million by directing its energies toward the dual task of tokenizing physical and intellectual assets. Its capacity to generate liquidity in markets typically bereft of it has garnered Superstate a number of loyal users among both creators and investors.
10. Lofty – $52.1 Million TVL
Last but certainly not least is Lofty, which has secured a TVL of $52.1 million. Lofty is focused on the tokenization of real estate for fractionalized ownership, much like OpenEden and RealT, but with an added emphasis on affordability and accessibility for smaller investors.
In a recent Medium post, Lofty co-founder and COO, Jessi Baker, said, “Many people can’t invest in easy-to-understand and accessible ways. We build technologies that enable more people to feel comfortable with investing and also allow them to invest in their own communities.”
The Rise of Real World Assets in DeFi
The considerable expansion of RWA projects indicates the ever-growing necessity of integrating real-world assets into our decentralized finance ecosystem. The current numbers signal that RWAs in DeFi are here to stay—and only expected to grow. The figure representing the RWA segment of the DeFi market made a significant jump from around 5% in Q1 2021 to over 13% by Q3 2021. Almost half of the RWA segment is represented by tokenized real estate, with other RWA DeFi offerings promising returns on the backing assets.
RWA projects are ready to radically change our perception of, and interaction with, both physical and financial assets. They bridge the chasm that exists between our traditional financial world and the future of finance, which is increasingly decentralized—if not already so. These projects furnish the kind of added flexibility and transparency that investments in either physical or financial assets for the most part lacked until just a few years ago.
Currently, the leading RWA initiatives are experiencing great success, yet the platforms’ full potential is not yet realized. As regulations clarify and use cases multiply, expect the RWA sector’s growth to continue apace, unearthing fresh opportunities for both businesses and investors.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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