Nick

What are RWAs and what are not? ​ Why do we need them? ​ What RWAs are onchain now what's on the horizon? ​ What might the market look like by 2030? ​ What are the main challenges to global adoption? ​ What areas look ripe for investment? ​ I unpack these questions in my new research out now at medium.com/inception-capital… ​ Here's the tl'dr 👇 ​ • RWAs are the tokenized representation of anything with value that exists outside of the blockchain, including physical and digital assets. ​ • Tokenization leverages blockchains for improved trade and management, enhancing liquidity, global reach, and transparency while reducing intermediary costs. ​ • Right now, the most dominant RWA is by far USD stablecoins (~97%), followed by securities (~1.5%, primary US T-bills), and commodities (~1%, primarily gold). • Stablecoins hold a unique position in bridging the adoption gap between crypto enthusiasts and ordinary people with their use case extending beyond diversification to hedging against currency debasement and cross-border payments. ​ • Global interest in tokenized US treasuries skyrocketed in 2023 as investors worldwide were attracted to increasing yield. $BUIDL dethroned $BENJI 6 weeks after launch! ​ • There are a number of emerging RWA categories that are intriguing but also highly speculative, including art and collectibles, IP rights, infrastructure financing, impact claims, insurance policies, and agricultural assets. ​ • Market projections have one thing in common: RWAs will become a huge industry this decade — estimates range from $3.5 trillion in the bear-case scenario to $16 trillion in the bull-case. • There are a bunch of challenges to realizing these projections — regulatory obstacles, first, and foremost, but also technical and operational risks, valuation challenges, uncertainties around market readiness, economic and social barriers to entry, and category-specific challenges around each RWA category. ​ • We propose a heuristic guide for identifying investable projects given these risks and challenges that takes into account unlockable liquidity, global demand, yield opportunities, and regulatory clarity.