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The crypto industry has been growing at an unprecedented rate, driving the decentralisation of the global economy. This shift towards a decentralised global economy promises inclusivity, democratised participation and equitable reward-sharing in the digital realm. Additionally, it empowers users with better control over their data and assets.
The origins of this revolution can be traced back to the launch of Ethereum, which opened up a plethora of new opportunities for developers to create decentralised applications (dApps). These dApps, characterised by self-executing Smart Contracts automated key processes enabling greater transparency and accountability among stakeholders. At present, Ethereum boasts of a market capitalisation of over $400 billion.
The biggest unlock of value in the crypto industry happened in 2019 with the emergence of Decentralised Finance (DeFi) applications. DeFi dApps unveiled disruptive new use cases for crypto and blockchain. For example, they enabled users to deploy their crypto assets as collateral to secure loans, or lending them to earn interest. All in all, DeFi dApps became a transformative force in the financial markets. They offered users more accessible, transparent, and efficient alternatives to traditional finance.
The next phase of growth in the crypto sector was brought about by Non-Fungible Tokens (NFTs) around 2021. NFTs enabled unique digital assets such as digital art and in-game assets to be tokenised for proof of ownership and authenticity.
However, not all DeFi dApps and NFT projects managed to establish themselves and flourish in the ever-evolving crypto market. In fact, most of them struggled to gain traction as they lacked a unique value proposition or were just copycats of other projects. During both the phases, the market soon became over-saturated with projects and investors started pulling away. At present, a small number of robust DeFi Apps and NFT projects grounded in authenticity continue to attract interest and investment. Thus, the past market cycles, particularly those dominated by DeFi Apps and NFTs, underline the importance of innovation and genuine value in sustaining growth and success in the crypto market.
A good rule of thumb for creating real value and propelling the growth of Web3 is developing applications that solve real-world problems. This is the distinguishing feature of the sector that has recently started a new phase of market growth in crypto - Real World Assets (RWAs).
RWAs solve real-world problems. Whether it is bringing liquidity to assets or improving global access to investments or reducing fraud, I believe that RWA tokenisation can help resolve the pain points of traditional finance. This means that developers have the opportunity to create RWA dApps that attract users from both crypto and non-crypto realms.
There are trillions of dollars worth of real world assets that can be tokenised and brought on chain, and only a little over 26k active blockchain developers, as per current data. Among these, only a small fraction of developers are working on RWA-centric applications. E Money Network is among the blockchains focusing on tokenising real world assets. So, there is a huge whitespace for developers to create innovative and meaningful solutions that impact people’s lives positively. They can capitalise on users' existing familiarity with RWAs to build dApps that speak to seasoned crypto enthusiasts and newcomers alike.
From developing new RWA-centric blockchain networks to creating dApps that solve specific problems of different RWAs, the scope for innovation in the RWA space is vast and the barriers to entry are low. Web3 developers can utilise their existing knowledge of languages for blockchain development to build on Ethereum, Solana, BNB Smart Chain, etc. Many next-gen blockchain networks have already launched their testnets to provide a safe environment to developers to develop and battle-test their applications.
At E Money Network, we are developing an L1 blockchain for RWA tokenisation. Our integrated compliance modules ensure that everything that is built on top of the E Money Network is aligned with regulatory requirements by default. E Money Network also recently launched a $2 million grant program for developers wishing to build RWA-centric applications on their blockchain.
Another important factor to consider is that the growth of RWAs is not going to happen like the Wild West, where authentic projects with disruptive potential get lost in the spate of subpar projects. This is because the rise of RWAs comes at a time when regulatory compliance is becoming mandatory for crypto projects. The initial phase of the Markets in Crypto Assets (MiCA) regulations was recently implemented in the EU which mandates regulatory compliance for different categories of crypto assets and crypto asset service providers (CASPs). It is necessary for RWAs to be subjected to a compliance regime because it is essential to authenticate the ownership of these RWAs. Assets such as real estate and financial instruments will need their authenticity verified off-chain thus ensuring only bona fide data makes its way to the blockchain.
Thus, with the rise of regulations in crypto, developers have more clarity on the legal frameworks they need to adhere to. This will enable them to create legally compliant applications that foster trust in both crypto and non-crypto communities enabling mainstream adoption. We have integrated compliance checks at the infrastructure-level to ensure that everything that is built on top of the E Money Network aligns with regulatory requirements by default.
It is evident that the RWA sector is the future of crypto. It is poised to experience massive growth in the near future driven by its potential to solve real world problems. RWAs are already seeing genuine adoption, even though this category is still in its infancy. At present, the Total RWA Onchain is worth nearly $13 billion, and as per a report by Boston Consulting Group, the tokenised assets market is expected to reach $16 trillion by 2030.
A significant chunk of the current onchain value is coming from tokenised treasury products from traditional financial giants such as BlackRock and Franklin Templeton. Combined, these two tokenised treasury products currently have a market capitalisation of over $940 million. However, there are RWAs across numerous sectors including real estate, commodities, intellectual property, etc. that can benefit from tokenisation.
More RWA applications will not just bring more value to RWAs, they will also lead the growth of the crypto industry and help it become a part of the mainstream economy. With E Money Network, we aim to lead this transformation by building a secure, transparent ecosystem for RWAs which provides liquidity and confidence for investors.
So, the time is ripe for developers to explore the RWAs sector and build applications which will bring real growth in the crypto industry. By tokenising real world assets, developers can unlock new levels of liquidity, transparency, security and efficiency in traditional industries. Furthermore, they can help promote equitable economic growth across the globe by democratising investment opportunities. RWA tokenisation is the next frontier of growth in crypto, and developers are uniquely positioned to drive this growth and change the face of finance as we know it.
Alex Dovbnya
Vladislav Sopov
Dan Burgin
U.Today Editorial Team