The Rise of RWA Tokenization

caleddare
August 25, 2023
eye
3
By
logos

Landshare Team

Tokenization, the process of converting real-world assets (RWAs) into digital tokens, has gained significant momentum in both traditional finance and the blockchain space. Although a relatively new concept, it’s already starting to disrupt major traditional markets, including real estate, commodities, and even art.

According to a report by Deloitte, the global market for tokenization is expected to reach $544 billion by 2025, with Boston Consulting Group projecting a surge to $16 trillion by 2030. The numbers don’t lie — the rise of RWA tokenization is here, and this is only the beginning.

In this article, we will provide an overview of the past, present, and future of RWA tokenization, and its implications for both traditional finance and the future of the blockchain space.

What is RWA Tokenization?

RWA tokenization is a process where the ownership rights of a real-world asset, such as a rental property, are represented as digital tokens on a blockchain. The tokens become digital representations of ownership, usually in the form of shares in a legal entity that holds the RWA(s). In this way, the tokens take the place of traditional methods of tracking ownership, such as stock certificates or membership ledgers.

Tokenization can be used to fractionalize illiquid assets such as real estate, or simply to allow for real-world assets to be represented digitally. In short, it’s a method to create fractional units of any asset — physical or digital — and trade them on a blockchain.

The Origins of RWA Tokenization

The idea of asset tokenization can be traced back to the creation of Bitcoin, the world’s first cryptocurrency. Bitcoin was created in 2009 and introduced the concept of the blockchain, a distributed ledger technology which allows for secure and transparent transactions without the need for intermediaries.

While Bitcoin first introduced the blockchain to the world, the industry took a major step forward with the launch of smart contracts on Ethereum. Smart contracts are programs that can be deployed to a blockchain, enabling the execution of complex business logic on-chain. It quickly became clear that this technology could be used to digitize and fractionalize real world assets, creating an entirely new financial ecosystem.

With the technology in place, a clear legal framework was still required to truly facilitate tokenized ownership. In 2017, the US state of Delaware amended its General Corporation Law to account for the use of blockchain technology in corporate record-keeping, enabling the issuance of company shares as digital tokens. This landmark legislation established a legal basis for tokenized ownership of RWAs, marking a major victory for proponents of blockchain technology. Since then, several jurisdictions and regulatory bodies have made strides in acknowledging and providing legal support for tokenized RWAs.

The Growth of Tokenization

The early growth of tokenization has been nothing short of impressive, particularly in real estate. Investment in tokenized real estate has nearly tripled in the last year, making it the fastest growing security token sector. The adoption of tokenization in real estate is motivated primarily by the desire to provide liquidity to traditionally illiquid assets, enabling investors to gain exposure to the asset class without the requiring large amounts of capital.

Tokenization has also seen significant growth in the art world. According to a report by Art Basel and UBS, the global art market was valued at $67.4 billion in 2018. However, the market has traditionally been dominated by wealthy individuals, making it difficult for smaller investors to gain exposure. Tokenization solves this by allowing for the fractionalization of artwork, enabling modest investments in high value pieces.

Another growing use of tokenization is US Treasury Bills. According to a recent report from Coindesk, the total volume of tokenized T-Bills has reached over $600 million. This growth can be attributed to the difficulty for non-US investors to access this lucrative market, widely regarded as one of the safest investments in the world. Tokenization breaks down these international barriers by enabling seamless investment with stablecoins or other cryptocurrencies.

In total, the tokenized RWA market has ballooned to over $2.3 billion in a few short years. While this is impressive, projections for the total value of tokenized RWAs in 2030 range anywhere from $4 trillion all the way up to $16 trillion, a minimum 4-fold increase over the current market cap of all cryptocurrencies combined.

The Future of the Industry

While traditional finance and cryptocurrency are separate industries, many believe tokenization will play a key role in the future of both of them. In fact, tokenization may very well represent the bridge between the two industries, tying them together in a way that is mutually beneficial.

Cryptocurrencies are known to be highly volatile, with abrupt price movements and unpredictable market cycles becoming the norm. As the industry becomes more sophisticated, there is an increasing demand for products that provide reliable yields and access to traditional markets. Through tokenization, RWAs can be traded interchangeably with Bitcoin, stablecoins, and all other crypto assets, introducing an additional layer of value to the ecosystem.

Traditional finance, on the other hand, has long struggled to drag its infrastructure into the digital age. The global financial system is a series of disjointed and often archaic systems that present massive barriers to international investment. The blockchain, a borderless and decentralized financial network, offers a compelling solution to these longstanding challenges.

By integrating tokenization, financial systems across the world can be streamlined and modernized, particularly in cross-border transactions. The need for cumbersome systems like international bank wires and currency conversions can be eliminated entirely, replaced by instantaneous settlement and automated transactions through smart contracts.

Closing Thoughts

The meteoric rise of RWA tokenization has the potential to disrupt not only the cryptocurrency space, but also the global financial system as a whole. The blockchain is the financial infrastructure for the digital age, facilitating cross-border exchanges, instantaneous settlement, and trustless operations, and those in traditional finance are starting to take notice.

Cryptocurrency and finance are often view separately from one another, but RWA tokenization is the bridge between them — and may very well represent the future of both.

Find Landshare On:

Twitter | Medium | Youtube | Telegram | Telegram Announcements | Coinmarketcap | Zealy

caleddare
January 17, 2025
eye
January 17, 2025

Landshare's Loan Protocol: Access Liquidity Without Selling Your Tokens

How to access liquidity without selling LAND tokens
By
logos

Landshare Team

At Landshare, we aim to make real estate investment accessible to everyone. By tokenizing real estate assets, we allow users to invest in prime properties worldwide without the massive upfront cost. 

We’ve brought out our latest update: the Land Protocol. Through this, token holders can access liquidity without selling their assets by using Landshare Tokens (LAND) or Real World Asset Tokens (LSRWA) as collateral. 

This creates a mutually beneficial scenario for both borrowers and lenders. Borrowers gain the cash flow they need, while lenders earn consistent returns through interest. How does this work? Let’s discuss 

The Promise of Loan Protocol 

If you’re holding LAND or LSRWA tokens, why let them sit idle when you can borrow USDC and put your assets to work? 

With the Landshare Loan Protocol, you don’t need to sell your valuable tokens to access liquidity. Instead, you can use them as collateral and get the funds you need while retaining ownership of your assets. Whether you want to cover personal expenses, make new investments, or take advantage of other opportunities by borrowing USDC through Landshare, you can maximize tokens' potential without parting with them.

As a lender, the protocol helps you earn 10% APY by contributing USDC. 

How does it work? 

The Landshare Loan Protocol has two distinct pools: one for LSRWA tokens and another for LAND tokens. Each of these pools has a set maturity date, the deadline by which loans must be repaid. If the loan isn’t repaid by this date, the collateral used by the borrower will be liquidated, meaning it will be sold to recover the loan amount. 

The completion percentage displayed for each pool shows how much time has passed in the loan term. For example, if the completion percentage is 50%, half the term is completed, and the same amount of time remains before the maturity date.

Once the loan term ends and the maturity date is reached, lenders will get their USDC back along with the interest earned during the loan period. This interest comes from the borrower’s repayment and is set at 10% APY. This means borrowers pay 10% in interest, and lenders earn 10% on their funds. As a lender, your USDC is secured by the collateral the borrower has provided—either LAND or LSRWA tokens. This makes the system secure for lenders since their funds are protected.

The protocol uses over-collateralization to reduce the risk for lenders. This means that borrowers must provide more collateral than the value of the loan they’re taking. 

For example, in the LSRWA pool, a borrower can only withdraw up to 50% of the value of their collateral. So if someone deposits $100 worth of LSRWA, they can only borrow 50 USDC. This extra collateral helps to protect lenders because the loan is backed by more than the borrowed amount, lowering the chances of a loss in case the borrower defaults.

If a loan is not repaid by the maturity date, the collateral (either LSRWA or LAND) will be sold to pay back the loan amount, including any interest. A 10% liquidation fee is also levied.  

After the liquidation, if there is any remaining balance from the sale of the collateral, the borrower can claim it. This process ensures that lenders are compensated even if a borrower fails to repay the loan.

How to borrow USDC using LSRWA and LAND

The process of borrowing USDC by pawning your LSRWA and LAND tokens is straightforward. Let’s walk through it: 

  1. As discussed, there are two pools for each of the tokens: LSRWA and LAND. Press the Borrow button of the pool against which you want to borrow USDC. 
  1. Next, a pop-up will appear on your screen. Enter the amount of USDC you wish to borrow. Once you do that, the collateral amount will be displayed immediately. 
  1. Now, simply press the Borrow button and approve the transaction in your wallet. You will be able to see the borrowed USDC in your wallet. 

How to lend USDC using LSRWA and LAND

You can lend your stablecoins through this protocol and earn 10% APY. The process is simple. Let’s look at it: 

  1. This time, press the Supply button. 

  1. Next, a pop-up will appear on the screen. Enter the amount you can supply and hit the " Supply" button.

Enhanced Capital Efficiency with $LSRWA

We’re rolling out a new borrowing strategy that unlocks triple the earning potential for our users. You’ll be able to borrow against staked LSRWA-USDT LP Tokens, allowing you to stack rewards from three sources at once:

  1.  LSRWA appreciation
  2.  LSRWA-USDT LP staking rewards
  3.  Gains from borrowed USDC

But wait, there’s more! 👀

If you buy $LSRWA via the DS Dashboard, you’ll earn NFT Credits. These credits can be used to mint NFTs and unlock even more rewards, taking your real estate investing to the next level with a touch of DeFi magic!

How the new borrowing strategy will work: 

1. Create LP Tokens: Pair USDT and LSRWA on DS Swap to generate LSRWA-USDT LP Tokens.

2. Wrap and Stake: Deposit LP Tokens into a wrapped contract to keep earning LAND yields.

3. Borrow USDC: Use your wrapped LP Tokens as collateral and unlock USDC via our Loan Protocol.

💡 Why is this exciting? This strategy supercharges your capital efficiency, letting you grow your portfolio without missing out on staking rewards or token gains.

Final Note

Borrowing through the Landshare Loan Protocol offers more than just quick access to cash—it’s an opportunity to make your tokenized assets work for you. You don’t have to choose between selling your tokens and staying liquid. 

With a fixed maturity date and competitive interest rates, this system allows you to borrow responsibly while keeping your tokens safe. 

Take advantage of the liquidity your assets can provide through the Landshare Loan Protocol.

caleddare
January 6, 2025
eye
January 6, 2025

Landshare 2025 Roadmap: New Features, Core Priorities & Team Insights

Learn what's coming up for Landshare in 2025.
By
logos

Landshare Team

Hello Landshare community!

As we move into yet another new year, we’d like to express our gratitude for each and every LAND holder, LSRWA investor, and community member who has shared their time and energy with us. 2024 was marked with several major milestones, and you can check out our annual recap here.

With last year officially behind us, it’s time to put out the team’s vision for the next 12 months of Landshare. In this roadmap, we will cover the specific deliverables you can expect to see this year, the ongoing developments that will occur throughout the year, and the core priorities that drive our decision-making process.

Without further ado, let’s dive in!

💡 A Shared Vision for the Future

Landshare has grown into something far greater than what we initially envisioned. What started as a concept for tokenized real estate has blossomed into a robust ecosystem featuring tools and features like staking, NFTs, liquidity pools, a loan protocol, and a secondary market.

In 2025, our focus shifts to unlocking the full potential of these offerings. This year will be about refinement, outreach, and adoption. We’ll prioritize showcasing our features to a broader audience through compelling content, strategic partnerships, offline events, and expanded advertising efforts.

Our goal is simple: to make Landshare a recognized leader in tokenization and to bring the benefits of our ecosystem to the masses. Your support continues to fuel this journey, and together, we can achieve even greater milestones.

TL;DR: The 2025 Roadmap

For those short on time, we’ve summarized the roadmap here, starting with our Core Priorities followed by the specific features and developments you can expect throughout the year.

  • User Experience and Product Polish: Taking a full audit of Landshare’s user experience, including UI changes, quality of life updates, bug fixes and implementing user feedback to improve existing features.
  • Simplified Onboarding: Making it easier for new users to join and engage with Landshare’s ecosystem.
  • Expanded Marketing: Strengthening our presence through YouTube, Web2 ads, and participation in industry events.
  • Property Expansion & Diversification: Adding more real estate options, including single family rentals, short-term rentals (Airbnb), and multi-unit properties, to provide broader investment opportunities.

🔑 Key 2025 Deliverables

  • Landshare Referral Program: Refer new users to Landshare and earn USDC Rewards. Compete on the leaderboard for the most referrals to earn bonuses.
  • Tokenization Hub (3rd Party Tokenization): Offers tokenization-ready templates for property owners to simplify onboarding new properties to the Landshare Ecosystem. Learn more
  • LSRWA Express: A simplified investment option allowing users to deposit stablecoins and earn stablecoin yield from real world assets.
  • LSRWA Liquidity Expansion: Introducing improved liquidity solutions for large LSRWA holders to reduce price impact, alongside enhanced liquidity pools.
  • Plume Network Deployment: Buy LSRWA on Plume Network using the pUSD stablecoin.
  • New Borrowing Strategies: New ways to maximize earning potential by staking LSRWA-USDT LP tokens to earn from multiple sources simultaneously.
  • NFT Ecosystem Refresh: Improving NFT usability with UX enhancements, bug fixes, new NFT releases, and a revamped Marketplace 2.0.
  • Focus Group: A dedicated Telegram group exclusively for large LAND and LSRWA investors, providing them with a direct channel to communicate with the team and access exclusive perks such as sneak peeks, early access to features, and other insights.

🎯 Ongoing Priorities

In addition to the key deliverables, here are the continuous efforts we’ll focus on throughout 2025:

  • Expanding the property portfolio with more diverse options, including Airbnbs and multi-unit buildings.
  • Exploring cross-chain opportunities to extend Landshare’s reach.
  • Making consistent UI/UX upgrades to enhance the platform.
  • Continuing YouTube and Web2 marketing initiatives.
  • Additional CEX listings.

Now that you know what to expect this year, let’s dive a little bit deeper into the new features and changes coming to Landshare in 2025.

⏩ LSRWA Express

We recognize that there are different types of users in the Web3 world — some are highly sophisticated, constantly seeking new ways to squeeze out additional yields. Others are passive, laid-back participants with less experience on the blockchain. Our vision is an ecosystem that accommodates both types of investors. For this reason, in line with our goal to make Landshare more accessible, we’re introducing LSRWA Express.

With LSRWA Express, qualified investors can earn real returns from real assets by simply depositing stablecoins in the Landshare platform. Behind the scenes, the stablecoins are used to purchase, hold, and redeem LSRWA Tokens, much like the capabilities our users already enjoy. On the front end, investors will enjoy a seamless investment where their gains are expressed in terms of USD. Here’s how it works:

  1. Complete KYC: Users will need to complete KYC in order to access LSRWA Express. Using Swipelux ZeroID, this process can be completed in a few moments.
  2. Deposit Stablecoins: Users can then deposit and lock stablecoins for a specific period of time.
  3. LSRWA Acquisition: The deposit contract will use the stablecoins to acquire LSRWA Tokens on behalf of the user.
  4. Yield Generation: LSRWA are auto-redeemed for USDC each month on behalf of all LSRWA Express users. Gains are reflected to the user and harvestable as USDC immediately.
  5. Withdrawal: When the lockup period has passed, users can withdraw their principle in the form of stablecoins or choose to continue staking.

With LSRWA Express, you can earn stablecoin yield without having to navigate the complexities of the ecosystem. Meanwhile, our existing users can continue to benefit from the robust feature set that Landshare has to offer.

💸 Maximize LSRWA yields with new borrowing strategies

In 2024, we launched our Loan Protocol, introducing the ability to borrow USDC against LAND or LSRWA Tokens. In 2025 we’re taking the next step and allowing users to borrow against staked LSRWA-USDT LP Tokens. With this capability, you’ll be able to earn yield from three different sources at once: LSRWA appreciation, LSRWA-USDT LP staking rewards, and gains from borrowed USDC.

Here’s how it works:

  1. Create LSRWA-USDT LP Tokens: This is the same process as it stands now — visit DS Swap and add USDT and LSRWA to the pool.
  2. Wrap LSRWA-USDT LP Tokens: Rather than staking LSRWA-USDT directly, you will deposit them into a wrapped LSRWA-USDT LP Token. The tokens deposited into the wrapped contract will then be deposited into the vault, still earning a LAND yield.
  3. Borrow USDC: Finally, with wrapped LSRWA-USDT Tokens in hand, visit the Landshare Loan protocol and borrow USDC.

Marketing Strategy

As highlighted earlier, one of our primary focuses for 2025 is bringing Landshare’s innovative features to a wider audience. Unlocking the full potential of our ecosystem requires not only building great products but also effectively communicating their value. To achieve this, we have developed a two-pronged marketing strategy targeting both traditional property owners and the crypto community.

🏢 B2B Marketing
Our business-to-business (B2B) efforts are designed to increase awareness of tokenization in traditional sectors and attract property owners to the Landshare ecosystem. Key strategies include:

  • Animated Explainer Videos
  • Targeted YouTube Ads
  • YouTube Influencers
  • Google Ads Campaigns
  • Facebook & Reddit Ads
  • Educational Content

👥 B2C Marketing
Our business-to-consumer (B2C) strategies aim to unlock the potential of the Landshare ecosystem within the crypto community. These efforts include:

  • Co-Marketing Initiatives
  • Twitter Spaces Participation
  • YouTube & Twitter KOLs Outreach
  • Ongoing Short-Term Events
  • Crypto-Focused Podcasts
  • Community-Led Growth

With this multi-faceted approach, we aim to bridge the gap between traditional property owners and the blockchain space while expanding our footprint in the crypto community. 2025 will be a year of bold outreach, creative campaigns, and consistent effort to bring our product to the masses.

🏘️ Property Expansion

Landshare’s Tokenization Hub represents a groundbreaking step forward in making real estate tokenization more accessible to property owners and investors alike. Designed as a comprehensive on-chain solution, it simplifies the process of bringing new properties into the Landshare ecosystem, offering property owners tools and templates to tokenize their assets seamlessly. If you’re unfamiliar with the Tokenization Hub, check out our feature preview here.

The Tokenization Hub will provide solutions for property owners, adding a new audience to the ecosystem. But what benefits can our existing users expect? In addition to new single-family rentals via our Roofstock + Forumpay collaboration, we’re opening the door to properties like Airbnbs, short-term rentals, and multi-unit complexes and improving the efficiency of our property pipeline. In doing so, we aim to grow and diversify our property selection to cater to different investor preferences.

This expanded property portfolio not only benefits investors but also strengthens the overall ecosystem. More properties mean more transaction activity, increased token utility, and greater exposure for Landshare as a pioneer in real estate tokenization.

🏦 Improving liquidity options for LSRWA

Since the inception of Landshare, we’ve sought to make real estate a truly liquid asset. In 2024, we successfully listed LSRWA Token on DS Swap and created a LSRWA-USDT LP Staking pool, enabling LSRWA holders to trade their tokens anytime. As a result of these efforts, we are proud to say that LSRWA is among the first security tokens with a secondary market, allowing investors to trade their RWA-backed tokens 24/7/365. Recently, our DS Swap pool hit the $350k mark, a testament to the support of our community and liquidity providers.

Despite these successes, we feel there is still room for improvment with regard to LSRWA liquidity — particularly for larger holders. In 2025, we’ll be implementing the following liquidity solutions:

  • OTC Sales: Offering the ability to conditionally sell larger LSRWA sums at a moderately discounted price, instilling confidence in larger buyers.
  • Rental Income Buybacks: Proposing the use of a portion of rental income to buy back LSRWA on DS Swap and add liquidity, increasing price, reducing LSRWA supply and increasing liquidity. This change would require a vote of LSRWA holders.
  • DS Swap adjustments: Using primary sale funds to buy back and burn tokens on DS Swap when the price dips below NAV, generating a small profit for LSRWA holders and ensuring tokens can be sold on DS Swap for a reasonable price.

🔃 NFT Refresh

The NFT ecosystem has been a core pillar of Landshare, driving users toward RWA adoption for over 2 years. In 2025, we’ll be giving the NFT ecosystem a refresh designed to improve user experience and functionality. Some of the updates you can expect include:

  • UX enhancements: Simplified navigation and bug fixes to improve the day-to-day experience of users.
  • Easy onboarding: Improved clarity for how the ecosystem works and how to get started.
  • Marketplace 2.0: A major overhaul to the NFT marketplace UI, plus added functionality like the ability to list premium upgrade NFTs.
  • New NFTs: New properties means new NFTs — each successful property offering on the Tokenization Hub will create a produce a brand new NFT.

Conclusion

Landshare’s foundation is stronger than ever, built on years of hard work, innovation, and the unwavering support of our community. Thank you for believing in Landshare and for being an integral part of this journey. Your feedback, enthusiasm, and commitment inspire us to push boundaries and aim higher every single day.

Stay tuned for the exciting developments ahead, and let’s continue building something extraordinary together!

caleddare
November 17, 2024
eye
November 17, 2024

RWA Tokenization Could See 50x Growth by 2030: Why Real Estate Tokenization is Gaining Popularity

Discover how RWA tokenization, led by real estate, is transforming investments with accessibility, liquidity, and a predicted 50x growth by 2030
By
logos

Landshare Team

Trump has won US elections, and with his second term comes a golden age for crypto, with positive regulations and unlimited opportunities. Bitcoin has already touched $91K in jubilation, with a brand new bull run already on the road. Altcoins are not behind either; in fact, CoinGecko’s 2024 Q3 crypto industry report highlighted RWA, memecoins, and more as the most popular crypto narratives!

RWA or real estate tokenization has had a good run in 2024, setting the sector up as one to see tremendous growth in this decade. A recent Tren Finance research report even predicts a 50x growth for RWA tokenization by 2030.

Out of the most popular RWAs to be tokenized this far, real estate is up there. A traditionally illiquid market now turned liquid by RWA tokenization, real estate tokenization is quickly gaining traction. 

The hype surrounding RWA tokenization

RWA tokenization refers to the process of converting ownership over real-world assets (RWAs) like real estate, art, commodities, or financial instruments like bonds or equities into digital tokens on a blockchain. One asset can be turned into one or a series of blockchain-based tokens, so an asset can essentially be purchased by multiple investors. This makes certain markets previously only accessible to HNIs and enterprises more accessible and liquid, lowering entry barriers for novice investors.

Each RWA token can represent complete or fractional ownership of an underlying asset, allowing it to be traded, transferred, or held digitally.

Multiple perks to RWA tokenization make the sector so popular to RWA owners and crypto investors alike. Some of them are:

  • Accessibility: As just mentioned, tokenization lowers the barriers to entry for investing in high-value assets with the feature of fractional ownership. For example, having a stake in a high-value real estate property becomes possible for retail investors with RWA tokenization.
  • Liquidity: Traditional RWAs often suffer from illiquidity; if you take real estate as an example again, assets are inaccessible to buyers due to geographical and economic reasons. However, tokenized assets can be traded quickly and 24/7 from any part of the world, and fractional ownership allows people from all financial backgrounds to enter any market, significantly enhancing liquidity.
  • Cost efficiency: By eliminating intermediaries and streamlining all processes, RWA tokenization reduces costs related to asset management, transaction fees, and regulatory compliance.
  • Global reach: Blockchain enables RWA to be marketed and traded globally, increasing both investor pool and market efficiency.
  • Lower risk than typical crypto: Many traditional investors stay wary of your usual crypto due to their speculative nature; their value is derived from market supply and demand instead of any underlying asset. RWA tokenization solves this issue for such investors, bringing real-world value to the blockchain. This expands the utilities of crypto, birthing innovative use cases that bridge the physical and digital economies. 

What’s more, the use cases of RWA tokenization are vast. You can choose to tokenize everything from real estate to debt instruments to art/collectibles to commodities, making RWA a cornerstone of the DeFi movement.

RWA sector to grow 50-fold in six years?

As Tren Finance’s October 2024 report stated, predictions from some of the largest financial institutions and business consulting firms suggest a 50x growth for RWA by 2030. 

Further forecasts say that the RWA sector could reach a market size between $4 trillion and $30 trillion, as you can see in the image below. 

If the sector reaches even $10 trillion by 2030, that would be a 54-times growth from its current value of $187 billion. 

As Tren Finance further captured in the report, the global RWA market stands at $867 trillion, only a small portion of which currently exists on-chain:

As the RWA tokenization sector matures, it is expected to capture more of this untapped market. 

What else does the Tren Finance report note? Here’s a quick summary:

  • McKinsey & Company expects a $4 trillion market valuation for RWA by 2030, while Standard Chartered expects $30.1 trillion.
  • The tokenized market excluding stablecoins is valued at $11.6 billion.
  • Including stablecoins, the tokenized market holds a valuation of $170 billion. In contrast, private credit holds $9 billion, real estate has $3.8 billion, securities and Treasuries have $2.2 billion, commodities have $1 billion, and ReFi, collectibles, intellectual property, and others have respectively $150 million, $60 million, $50 million, and $130 million+.
  • 2024 has seen the highest amount of RWAs brought on-chain in history.
  • The RWA ecosystem is dominated by BlackRock in tokenized Treasuries and securities, Tether Gold in commodities, and Landshare in real estate among others, as per the report. 

As blockchain continues integrating with TradFi, the financial markets are going through a revolution. Big players like BlackRock and Tether are expanding into RWA tokenization; the sector most definitely has the potential to completely change how people invest/trade and own assets. 

Real estate tokenization running ahead 

Out of all the different RWA being tokenized, real estate tokenization has probably caught on the fastest. Why is that? Here’s what Landshare thinks:

  • Real estate properties are typically high-value and illiquid, making them super ideal for fractionalization through tokenization. By breaking down ownership of real estate into smaller, easily tradable tokens, all sorts of investors can participate in the market without needing large capital. For example, on Landshare, investors can enter the US real estate market with only $50 as a threshold.
  • Real estate is a universally recognized asset class with historically stable returns and good appreciation potential. Add to that the universal market for real estate prepared by tokenization, and investors are naturally attracted to the asset.
  • Blockchain’s ability to provide immutable ownership records and eliminate intermediaries addresses trust and fraud issues usually rampant in traditional real estate transactions.
  • Traditional real estate transactions further involve high costs and lengthy settlement periods. Tokenization simplifies and accelerates both processes, making real estate significantly more attractive.

Overall, real estate’s vast, underutilized potential combined with blockchain’s efficiency creates a perfect use case, naturally making it a frontrunner in the RWA tokenization space.

Landshare is a U.S.-based platform dedicated to the tokenization of real estate properties. It enables investors to acquire fractional shares in residential properties using blockchain technology, streamlining the investment process and broadening the scope of who can invest in real estate. By integrating blockchain technology into the real estate market, Landshare offers tokenized property assets on its platform, making it possible for investments to start at just $50, thus democratizing the entry into property investment.

The platform employs Real World Asset (LSRWA) tokens, granting investors partial ownership in tangible property assets and marking a notable innovation in real estate investment. Landshare's utility token, LAND, has proven its transactional effectiveness by facilitating the sale of four tokenized properties on the Binance Smart Chain (BSC), demonstrating its market readiness. Addressing the traditional inefficiencies and liquidity issues in real estate, Landshare positions itself as a critical player, offering promising prospects for growth and passive income generation.

Learn more about us on our official website.

The Rise of RWA Tokenization

Tokenization, the process of converting real-world assets (RWAs) into digital tokens, has gained significant momentum in both traditional finance and the blockchain space. Although a relatively new concept, it’s already starting to disrupt major traditional markets, including real estate, commodities, and even art.

According to a report by Deloitte, the global market for tokenization is expected to reach $544 billion by 2025, with Boston Consulting Group projecting a surge to $16 trillion by 2030. The numbers don’t lie — the rise of RWA tokenization is here, and this is only the beginning.

In this article, we will provide an overview of the past, present, and future of RWA tokenization, and its implications for both traditional finance and the future of the blockchain space.

What is RWA Tokenization?

RWA tokenization is a process where the ownership rights of a real-world asset, such as a rental property, are represented as digital tokens on a blockchain. The tokens become digital representations of ownership, usually in the form of shares in a legal entity that holds the RWA(s). In this way, the tokens take the place of traditional methods of tracking ownership, such as stock certificates or membership ledgers.

Tokenization can be used to fractionalize illiquid assets such as real estate, or simply to allow for real-world assets to be represented digitally. In short, it’s a method to create fractional units of any asset — physical or digital — and trade them on a blockchain.

The Origins of RWA Tokenization

The idea of asset tokenization can be traced back to the creation of Bitcoin, the world’s first cryptocurrency. Bitcoin was created in 2009 and introduced the concept of the blockchain, a distributed ledger technology which allows for secure and transparent transactions without the need for intermediaries.

While Bitcoin first introduced the blockchain to the world, the industry took a major step forward with the launch of smart contracts on Ethereum. Smart contracts are programs that can be deployed to a blockchain, enabling the execution of complex business logic on-chain. It quickly became clear that this technology could be used to digitize and fractionalize real world assets, creating an entirely new financial ecosystem.

With the technology in place, a clear legal framework was still required to truly facilitate tokenized ownership. In 2017, the US state of Delaware amended its General Corporation Law to account for the use of blockchain technology in corporate record-keeping, enabling the issuance of company shares as digital tokens. This landmark legislation established a legal basis for tokenized ownership of RWAs, marking a major victory for proponents of blockchain technology. Since then, several jurisdictions and regulatory bodies have made strides in acknowledging and providing legal support for tokenized RWAs.

The Growth of Tokenization

The early growth of tokenization has been nothing short of impressive, particularly in real estate. Investment in tokenized real estate has nearly tripled in the last year, making it the fastest growing security token sector. The adoption of tokenization in real estate is motivated primarily by the desire to provide liquidity to traditionally illiquid assets, enabling investors to gain exposure to the asset class without the requiring large amounts of capital.

Tokenization has also seen significant growth in the art world. According to a report by Art Basel and UBS, the global art market was valued at $67.4 billion in 2018. However, the market has traditionally been dominated by wealthy individuals, making it difficult for smaller investors to gain exposure. Tokenization solves this by allowing for the fractionalization of artwork, enabling modest investments in high value pieces.

Another growing use of tokenization is US Treasury Bills. According to a recent report from Coindesk, the total volume of tokenized T-Bills has reached over $600 million. This growth can be attributed to the difficulty for non-US investors to access this lucrative market, widely regarded as one of the safest investments in the world. Tokenization breaks down these international barriers by enabling seamless investment with stablecoins or other cryptocurrencies.

In total, the tokenized RWA market has ballooned to over $2.3 billion in a few short years. While this is impressive, projections for the total value of tokenized RWAs in 2030 range anywhere from $4 trillion all the way up to $16 trillion, a minimum 4-fold increase over the current market cap of all cryptocurrencies combined.

The Future of the Industry

While traditional finance and cryptocurrency are separate industries, many believe tokenization will play a key role in the future of both of them. In fact, tokenization may very well represent the bridge between the two industries, tying them together in a way that is mutually beneficial.

Cryptocurrencies are known to be highly volatile, with abrupt price movements and unpredictable market cycles becoming the norm. As the industry becomes more sophisticated, there is an increasing demand for products that provide reliable yields and access to traditional markets. Through tokenization, RWAs can be traded interchangeably with Bitcoin, stablecoins, and all other crypto assets, introducing an additional layer of value to the ecosystem.

Traditional finance, on the other hand, has long struggled to drag its infrastructure into the digital age. The global financial system is a series of disjointed and often archaic systems that present massive barriers to international investment. The blockchain, a borderless and decentralized financial network, offers a compelling solution to these longstanding challenges.

By integrating tokenization, financial systems across the world can be streamlined and modernized, particularly in cross-border transactions. The need for cumbersome systems like international bank wires and currency conversions can be eliminated entirely, replaced by instantaneous settlement and automated transactions through smart contracts.

Closing Thoughts

The meteoric rise of RWA tokenization has the potential to disrupt not only the cryptocurrency space, but also the global financial system as a whole. The blockchain is the financial infrastructure for the digital age, facilitating cross-border exchanges, instantaneous settlement, and trustless operations, and those in traditional finance are starting to take notice.

Cryptocurrency and finance are often view separately from one another, but RWA tokenization is the bridge between them — and may very well represent the future of both.

Find Landshare On:

Twitter | Medium | Youtube | Telegram | Telegram Announcements | Coinmarketcap | Zealy

Image
Our Blog Posts

Get the latest tips
from the Landshare team