Real-World Assets (RWAs) Explained

Real-world asset (RWA) tokenization is one of the largest market opportunities in the blockchain industry, with a potential market size in the hundreds of trillions of dollars. In theory, anything of value can be tokenized and brought onchain.

This is why tokenized RWAs are a growing market segment in the digital asset industry, with an increasing number of projects looking to tokenize a wide variety of assets, including cash, commodities, real estate, and much more.

In this article, we’ll explain what tokenized RWAs are, how they are created, and how Jarsy is the only platform that can provide a comprehensive solution for fulfilling the requirements of tokenized assets.

What Are Real-World Assets (RWAs)?

Tokenized real-world assets (RWAs) are blockchain-based digital tokens that represent physical and traditional financial assets, such as cash, commodities, equities, bonds, credit, artwork, and intellectual property. The tokenization of RWAs marks a significant shift in how these assets can be accessed, exchanged, and managed, unlocking an array of new opportunities for both blockchain-powered financial services and a wide variety of non-financial use cases underpinned by cryptography and decentralized consensus.

Asset tokenization is among the most promising use cases for blockchain technology, with its potential market size encompassing nearly all human economic activity. The future of finance is onchain, and it’s likely to feature hundreds of blockchains supporting trillions of dollars of tokenized RWAs on a common substrate consisting of blockchain and distributed ledger technology-based networks connected by a universal interoperability standard.

Tokenizing Real-World Assets

Tokenizing real-world assets involves representing the ownership rights of assets as onchain tokens. In this process, a digital representation of the underlying asset is created, enabling onchain management of the asset’s ownership rights and helping to bridge the gap between physical and digital assets.

Tokenized assets benefit from enhanced liquidity, increased access, transparent onchain management, and reduced transactional friction compared to traditional assets. In the case of financial assets, the tokenization of RWAs also consolidates the distribution, trading, clearing, settlement, and safekeeping processes into a single layer, enabling a more streamlined onchain financial system with decreased counterparty risk, where capital can be more efficiently mobilized.