Real-World Assets May Overtake Blockchain Sector Due To TradFi Interest
Traditional financial (TradFi) markets are showing increasing interest in the blockchain sector, which has become evident with the rise of tokenized real-world assets (RWAs).
According to blockchain analytics and research firm Messari, the RWA market has grown to $8 billion in total value locked (TVL) this year alone.
Over the past year, RWA protocols have seen a remarkable resurgence, with their TVL soaring to nearly $8 billion, driven by a market preference for debt-based, high-yield investments.
✍️ @SteimetzKinji provides insights in the latest Messari Pro report: https://t.co/GeDgqu3hkW pic.twitter.com/zKgyXcRoMU
— Messari (@MessariCrypto) April 30, 2024
For context, tokenized RWAs use blockchain technology to bridge the gap between traditional finance and cryptocurrencies. This enables digital tokens on a blockchain network to define ownership rights of tangible assets.
Industry experts expect RWA growth to continue accelerating due to TradFi’s interest.
Serge y Nazarov, Co-founder of Chainlink, recently mentioned on the Web3 Deep Dive podcast tha t tokenized RWAs will eventually surpass the total value of cryptocurrencies.
“Traditional ‘TradFi’ folks are very good at securitization, which is basically the packaging of something in a financial product, and real-world assets are a nice word for securitization of various assets,” Nazarov said. “As TradFi communities come into the crypto blockchain world, it’s very natural that they will securitize assets.”
Simon Barnby, Chief Marketing Officer of Archax, a UK-based regulated crypto exchange, told Cryptonews that the cryptocurrency sector’s total market size is currently less than that of Apple. Given this, the potential for tokenized RWAs is huge.
“Archax has
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