By Raj Bagadi, Founder and CEO of E Money Network
Last updated
Over the last few years, the crypto industry has been growing at a remarkable rate, contributing to the growth of a decentralised global economy. This shift towards decentralisation signifies inclusivity in economic processes and equitable distribution of rewards in the digital space. Additionally, it enables users to have better control over their data and assets.
The launch of Ethereum in 2016 is attributed as the starting point of this revolution. Ethereum opened up a world of new opportunities for developers to build decentralised applications (dApps). One of the most significant features of these dApps were, self-executing Smart Contracts which automated key processes and thus enabled greater transparency and accountability among stakeholders. Presently, Ethereum has a of over $400 billion.
The next big innovation in the crypto industry were Decentralised Finance (DeFi) applications in 2019. DeFi dApps enabled disruptive new use cases for crypto and blockchain, and offered users more accessible, transparent and efficient alternatives to traditional finance. For example, with DeFi apps, users could deploy their crypto assets as collateral to secure loans, or lend them to earn interest. All in all, DeFi dApps enabled the biggest unlock of value in the crypto industry and became a transformative force in the financial markets.
The Covid-19 pandemic saw the next phase of growth in the crypto sector brought about by Non-Fungible Tokens (NFTs) NFTs made it possible for unique digital assets such as digital art and in-game assets to be tokenised, providing robust proofs of ownership and authenticity.
However, not all DeFi dApps and NFT projects were successful in the ever-evolving crypto market. In fact, most of them failed to gain traction as they lacked a unique value proposition or were just imitations of established projects. During both the phases, the market soon became overcrowded with low-value projects without users and investors. At present, a small number of robust and authentic DeFi Apps and NFT projects continue to garner the interest of investors. Thus, the past DeFi and NFT-led market cycles underscore the importance of innovation and genuine value in sustaining growth and success in the crypto market.
A good rule of thumb for powering the creation of real value and driving the growth of Web3 is developing applications that solve real-world problems. This is the distinguishing feature of the sector which is presently leading the latest phase of market growth in crypto - Real World Assets (RWAs).
RWAs solve real-world problems. Whether it is bringing liquidity to assets or democratising 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 both crypto and non-crypto users.
The world has trillions of dollars worth of real world assets that can benefit from tokenisation, and only a little over , as per current data. Among these, only a small fraction of developers are working on RWA-centric applications. E Money Network is among the few blockchains tailored for facilitating the tokenisation of real world assets. So, there is a huge whitespace for developers to participate in the creation of innovative and meaningful solutions that bring a real positive difference to people’s lives. They can leverage users' existing familiarity with RWAs to build dApps that resonate with seasoned crypto enthusiasts and newcomers alike.
From developing new RWA-centric chains to creating dApps that solve the pain points of different RWAs, the scope for innovation in the RWA space is immense and the barriers to entry are low. Web3 developers don’t even need to engage in a steep learning curve to grab this opportunity. They can utilise their existing knowledge of languages for blockchain development to build on Ethereum, Solana, BNB Smart Chain, etc. They can also explore next-gen blockchain networks that have already launched their testnets to develop and battle-test their applications.
At E Money Network, we are developing an L1 blockchain for RWA tokenisation. Our integrated compliance modules enable regulatory compliance for everything that is built on top of the E Money Network by default. also recently launched a for developers wishing to build RWA-centric applications on their blockchain.
Another important factor to consider is that till now, the growth of the crypto sector happened like the Wild West. However, this is not going to be the case with RWAs where authentic projects with disruptive potential get lost in the spate of subpar projects. This is because the rise of RWAs coincides with the implementation of regulations in the crypto sector. Regulatory compliance is becoming mandatory for crypto projects.
The initial phase of the was recently implemented in the EU. It mandates regulatory compliance for different categories of crypto assets and crypto asset service providers (CASPs) to safeguard investors and promote market integrity. RWAs, by nature, are subjected to a compliance regime because it is essential to authenticate the ownership of assets in real life. Assets such as real estate and financial instruments need their ownership, authenticity and custody verified off-chain to ensure that 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 and regulatory frameworks they need to follow. This will enable them to create legally compliant applications that garner mainstream adoption by fostering trust in both crypto and non-crypto communities.
It is evident that the future growth of crypto is going to be led by RWAs. Despite being in their nascent stages, RWAs are already seeing genuine adoption. At present, the Total RWA Onchain is worth nearly , and as per a report by Boston Consulting Group, the tokenised assets market is expected to grow to .
At present, tokenised treasury products from traditional financial giants such as BlackRock and Franklin Templeton are major contributors to the current onchain value. Combined, these two tokenised treasury products boast of a current market capitalisation of over . However, there are RWAs across numerous sectors including real estate, commodities, intellectual property, etc. that are yet to undergo tokenisation and experience its benefits.
More RWA applications will not just solve real world problems, 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 robust, efficient and scalable ecosystem for RWAs which provides unparalleled liquidity and confidence to investors. We strive to create an inclusive financial ecosystem that offers inclusive economic opportunities to all.
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.
