Bittime – MANTRA Chain, aMiddle East-focused blockchainreal-world assets (RWA). RWAs are traditional assets such as real estate and stocks that are converted into digital tokens on the blockchain.
MANTRA Chain is currently in the final stages of obtaining a license from VARA, the crypto regulator in Dubai.
This permission is essential for MANTRA to build and provide a regulatory compliant set of tools for issuing and trading RWA assets.
RWA Predicted to Become a Billion Dollar Business
Many in the crypto world and beyond are betting that RWAs will become billion-dollar businesses by the end of the decade.
This means traditional assets that investors are interested in, such as real estate, stocks, and perhaps even works of art, will need to be traded on the blockchain. However, this has not yet been fully realized.
Projects like MANTRA are raising huge funds to seize opportunities in this immature RWA market.
One challenge is determining who can participate in RWA trading. Will this trading be open to everyone (like meme coin trading) or more controlled, like the stock market?
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MANTRA Funding Round
MANTRA founder, John Patrick Mullin, had a vision to build a more controlled or “permissioned” trading environment. "Users must go through a registration process to be able to enter this ecosystem," explained Mullin. “But once registered, they can participate fully.”
MANTRA's funding round was led by Shorooq Partners, an early-stage technology support company. Other investors include Three Point Capital, Forte Securities, Virtuzone, Hex Trust, and GameFi Ventures. Mullin plans to conduct follow-up fundraising in the near future.
The MANTRA network is currently not active, meaning no one can issue or trade RWAs yet.
However, this network is planned to be built on Cosmos, a blockchain network consisting of interconnected but independent blockchains.
According to MANTRA documents, Cosmos does not yet have a dedicated network for tokenized RWA trading.
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MANTRA Focuses on Experienced Crypto Users
Once active, Mullin said MANTRA will focus on crypto users who are already familiar with crypto assets , decentralized exchange (DEX) , on-chain lending and borrowing, and so on.
Mullin is aware of the challenges in building long-lasting RWA products, considering that this sector is not yet fully realized despite its promising prospects. He learned from the bitter experience of the crypto industry in 2022 and decided to change his business plan.
“It may look like a bull market right now, but three months ago it was different,” Mullin said. The strategy Mullin took was to build a platform that others could leverage to build their own RWA businesses. This is considered the safest move in a landscape full of risks.
“We don't want to be a trader of every asset, we don't want to build every decentralized application (dApp). "We also have to be at the protocol level," concluded Mullin.
Also Read: What Are Real World Assets (RWA), 5 Crypto & Blockchain Coins That Use the RWA Narrative
RWA Opportunities and Challenges
While interest in RWA is growing, there are several challenges that need to be overcome:
1. Regulation
The crypto industry is still in the early stages of regulation. The lack of clear and uniform regulations for RWAs could hamper the growth and adoption of the technology. MANTRA Chain is seeking to obtain a license from regulators in Dubai, demonstrating their commitment to comply with existing regulations.
2. Standardization
There is no unified standard for asset tokenization. This can introduce complexity and make the integration process between different platforms more difficult. MANTRA Chain needs to ensure the compatibility of their platform with standards that will emerge in the future.
3. Liquidity
Traditional assets such as real estate generally have low liquidity. RWA tokenization is expected to increase liquidity, but platforms like MANTRA Chain need to attract enough investors and participants to ensure smooth trading of assets.
4. Market Adoption
Another issue is broad market adoption. Investors, especially institutional investors, may still need some time to get comfortable with the concept of fractionalized asset ownership (ownership broken down into smaller units) via digital tokens. MANTRA Chain needs to build trust and credibility to attract the interest of institutional investors.
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The Future of RWA
Despite the challenges, the future of RWA looks promising. Several factors support the growth of RWA:
1. Increased Efficiency
Asset tokenization can improve the efficiency of traditional asset transactions. The trading process becomes faster and more transparent because it utilizes blockchain technology.
2. Democratization of Investment Access
Tokenized RWAs enable retail investors to invest in high-value assets such as real estate that were previously difficult to reach. Tokenization breaks down asset ownership into smaller, more affordable units.
3. New Financial Innovation Opportunities
The integration of RWA with DeFi can open up new financial innovation opportunities. For example, investors can use ownership of RWA assets as collateral to obtain loans in the form of cryptocurrency.
MANTRA Chain, with its focus on the Middle East region and regulatory compliance-first approach, has the potential to become an important player in the development of RWA.
Their success will depend largely on their ability to overcome existing challenges and exploit the opportunities offered by RWA technology.
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Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER : This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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