Real estate, stocks, carbon credits, and other financial assets are coming to DeFi.

In one of our latest #Binance Research reports, we explore the world of Real World Assets (“RWAs”) 💰🔒

Some takeaways ⬇️ 🧵

1/ Real World Assets (“RWAs”) are assets that exist off-chain, but are tokenized and brought on-chain to be used as a source of yield within DeFi.

RWAs can represent both tangible and intangible assets such as real estate, #stocks, #cars, or almost any other store of value.

2/ The main driving force behind bringing real world assets onto the blockchain is the belief that, in the long-term, #DeFi will offer unique opportunities and market efficiencies to asset holders, which cannot be found in traditional financial systems.

3/ TradFi institutions, such as @GoldmanSachs, @Siemens, and @KKR_Co, as well as, crypto-native protocols, such as @MakerDAO and @AaveAave, have all announced RWA-based projects.

Work is being done on the infrastructure and application layer to seamlessly bring assets on-chain.

4/ So far, there are equities, real-asset, and fixed income markets surrounding RWA-based instruments.

5/ Private credit is a market of notable activity.

Over 1560 RWA backed private credit loans have been issued, representing +US$4B in value.

Average interest rates on these loans is relatively high at 9-9.75% (avg. business loan ranges from 4.90% to 9.83% at TradFi banks)

6/ @Goldfinch, a protocol that offers RWA-based private credit, has +US$100M of active loans. Borrowers on Goldfinch mainly come from emerging market economies.

Goldfinch loans can be particularly beneficial to a borrower who lacks access to a reliable TradFi lender.

7/ Other protocols, such as @Maple and @TrueFi, are removing traditional DeFi overcollateralization thresholds for borrowers, as long as they have a real-world presence and back their debt with RWAs. This requires credit checks and blurs the lines between TradFi and DeFi.

8/ The most popular non-stable RWA underlying is by far real-estate. RWAs have the potential to transform the #real-estate industry; By tokenizing and fractionalizing the value of properties, smaller investors, for the first time, can gain exposure to this asset class.

9/ To learn more about RWA and future trends in the space, such as RWA-based Layer 1s and regulation, be sure to check out the full report below at https://research.binance.com