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Real World Assets (RWAs) could be the next big crypto narrative - specifically within the DeFi space.
RWAs refer to tangible or physical assets in the real world, such as gold, real estate, inventory, or other forms of traditional assets, and even intangible assets like bonds or carbon credits.
These real-world assets have inherent value and are not native to the digital realm. However, with the advent of decentralized finance (DeFi), RWAs can be tokenized and incorporated into blockchain-based systems, enabling their representation and transfer on the blockchain, and allowing for fractional ownership of these assets.
Tokenization of RWAs involves creating digital tokens that represent ownership or 'fractional ownership' in the underlying asset. These tokens are typically issued on a blockchain network (such as Ethereum) and can be traded or exchanged just like any other digital asset.
The process of tokenizing RWAs involves verifying the authenticity, ownership, and value of the underlying asset and then creating a corresponding digital representation.
As the world continues to move toward digital, it's almost certain we will see the digitization and tokenization of real-world assets happening on a grand scale.
We are already seeing it with the tokenization of Art - First, there were NFTs, and now you can own your very own piece of a Picasso. It's only a matter of time before the majority of our real-world assets will also be available on the blockchain.
