Bittime - The crypto world is currently busy discussingtokenized real world assets (RWA). CoinGecko, the world's largest independent cryptocurrency data aggregator, published a report on RWA developments in 2024 on March 21. The report states that there are 4 RWA assets that are on the rise in 2024. Anything? Let's discuss it through this article.
These RWA assets are basically real assets such as property, gold, or even shares that are converted into digital form on the blockchain. Let's take a look at some of the top RWA asset categories according to CoinGecko.
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Top RWA Assets 2024
1. Dominance of US Dollar Pegged Assets among Stablecoins
Currently, most real world assets (RWA) are dominated by stablecoins pegged to the US dollar. The top three stablecoins, namely Tether (USDT), USDC (USDC), and Dai (DAI) even control 95% of the market share. Tether (USDT) leads the pack with a market cap of $96.1 billion, followed by USDC (USDC) at $26.8 billion, and Dai (DAI) at $4.9 billion.
Meanwhile, assets pegged to currencies other than the US dollar only account for 1% of the total market cap. Some examples are Euro Tether (EURT), CNH Tether (CNHT), Mexican Peso Tether (MXNT), EURC (EURC), Euro Stasis (EURS), and BiLira (TRYB).
Also read: What is Tether?
Despite experiencing a downturn during the bear market, the overall stablecoin market capitalization has grown rapidly. At the start of 2020, its market capitalization was only about $5.2 billion.
This figure then soared to reach a peak of $150.1 billion in March 2022. Interestingly, this market capitalization rose again by 4.9% in 2024, from $128.2 billion at the beginning of the year to $134.6 billion as of February 1.
2. Commodity-Based Tokens Reach $1.1 Billion Market Cap, Gold Remains Most Popular
The next real world asset that is in demand is precious metals in token form. Gold is the most popular commodity with tokens such as Tether Gold (XAUT) and PAX Gold (PAXG) controlling 83% of the market capitalization of commodity-based tokens.
Each XAUT and PAXG token represents physical ownership of one ounce of gold bullion. Apart from that, there are also Kinesis Gold (KAU) and VeraOne (VRO) which are each pegged to one gram of gold.
Not only gold, other commodity-based tokens are also starting to emerge. An example is Uranium308, a project that launched a token pegged to the price of 1 pound of uranium (U3O8). These tokens can even be exchanged for physical uranium, but with strict compliance requirements.
Despite their demand, the total market capitalization of commodity-based tokens is only $1.1 billion. This figure is equivalent to 0.8% of the market capitalization of US dollar-pegged stablecoins.
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3. Tokenized Treasury Products Soar 641% in 2023, Now Worth Over $861 Million
Tokenized US government securities (US Treasury) products experienced a significant increase in popularity during the bear market. Its market capitalization jumped 641% in 2023, from $114.0 million to $845.0 million.
However, this growth slows slightly in 2024 with a 1.9% increase in January and a market cap of $861.0 million.
Franklin Templeton is currently the largest US treasury token issuer, with a total of $332.0 million worth of tokens issued through the On-Chain US Government Money Fund. This figure gives them a market share of 38.6%.
Interest-bearing stablecoin issuers such as Mountain Protocol and Ondo Finance are also enlivening the market. As of February 2024, Mountain Protocol has issued $154.0 million in Mountain Protocol USD (USDM) tokens since its launch in September 2023. Meanwhile, Ondo has a market capitalization of $132.4 million for its Ondo US Dollar Yield (USDY) token.
For blockchain platforms, Ethereum is the top choice for tokenized treasury tokens with a market share of 57.5%. However, some publishers such as Franklin Templeton and Wisdomtree Prime choose to use Stellar which currently has a market share of 39%.
4. Demand for Private Credit is Dominated by the Automotive Sector, Reaching 42% of All Loans
Of the total $470.3 million in loans provided by private credit protocols, 42% or $196.0 million was used for auto financing. Loans to the fintech and real estate sectors occupy second and third positions respectively with 19% and 9%.
Throughout 2023, the automotive sector saw a large increase in loan demand, with total loans of more than $168.0 million distributed across 60 loans. On the other hand, the fintech sector did not take out any new loans in the same period.
Also read: What is Ondo (ONDO)?
The real estate and crypto trading sectors have received a total of 840 loans, but only 10% are still active. The rest have been repaid, and some have defaulted. It was recorded that 13 loan defaults occurred in the crypto trading sector due to the collapse of Terra and Three Arrows Capital (3AC).
Demographically, the majority of borrowers come from developing countries such as Africa, Southeast Asia, Central America and South America. A total of 42 loans or 40.8% of total loans came from African countries.
Tokenized real world assets (RWA) show great potential to change the way we invest and transact. These assets offer various benefits, such as wider accessibility, higher liquidity and better efficiency.
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Although still in the early stages of development, tokenized RWAs have shown significant growth. With more institutions and investors entering this market, RWA is predicted to play an increasingly important role in the crypto ecosystem in the future.
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Also read:
What is RWA and Why is it Important for DeFi?
What Are Real World Assets (RWA), 5 Crypto Coins & Blockchains That Use the RWA Narrative
RWA Tokenization on a Large Scale Not Feasible Yet?
What are Tokenized Real World Assets (RWA)? Everything You Need to Know!
DISCLAIMER: This article is informational in nature and is not an offer or invitation 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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