LazzarEnne

Posted on Sep 20, 2022Read on Mirror.xyz

On chain real world asset tokenization

According to Boston Consulting Group, tokenization of global illiquid assets estimated to be a $16 trillion business opportunity by 2030 - (Full Report: https://web-assets.bcg.com/1e/a2/5b5f2b7e42dfad2cb3113a291222/on-chain-asset-tokenization.pdf )

Tokenization of global illiquid assets estimated to be a $16 Trillion businessopportunity by 2030

Tokenized assets will be built by different verticals, such as listed/unlisted equity, home equity, invested funds, financial asset. By 2030 is estimated that the TAM will be around 10% of global GDP. In best-case scenario tokenization potential is $68 trillion by 2030!

There are broadly two types of tokenized assets: fungible and non fungible assets. Big part of this market will be represented by #NFT on chain. On-chain asset tokenization offers six distinct advantages over traditional fractionalization:

  1. Improves affordability

  2. Borderless accessibility

  3. Unlocks liquidity and enhances flexibility

  4. Immutable transparency

  5. Transaction efficiency

  6. Better price discovery

We are talking for years that real asset tokenization and real world assets (RWAs) will be the next big thing in crypto. IMO this stream will be the next bull run catalyst along with social media, non financial web 3.0 utilization, gaming, privacy, ownership economy...

There are strong indicators pertaining to the rising of on-chain asset tokenization, including:

  • Growth outlook in digital asset trading volume (@FTX_Official with stocks, @ADDXco with securities..)

  • Successful pilots across countries

  • More asset classes are being tokenized

Below a comparative analysis of some of the most prominent players in this space, with most being asset agnostic. @tZERO @ConsenSysCodefi @Securitize @PolymathNetwork @TokensoftInc

Range of emerging on-chain tokenization players. Source: Blockdata (Oct. 2021); Pitchbook, BCG analysis

Another prominent player, on top of asset originator stack, is @centrifuge. You can find below a great research made by the friends of @tokenterminal.

https://www.youtube.com/watch?v=4bWCCY2sGqM

Centrifuge enables businesses to mint non-fungible tokens (NFTs) representing verified RWAs.

It promises to bridge the gap between real-world assets (RWAs) and decentralized finance (DeFi). This allows DeFi investors to invest in liquidity pools backed by RWAs. Asset originators can lock their NFTs representing RWAs into Tinlake’s liquidity pools to borrow capital.

The TVL of the project is atm limited but growing steadily and sits around 88M. If they will be able to capture a share of the total market the potential is huge.The total revenue is around 600k/month at the moment with a P/S around 10x.

Just to understand the potential, if we assume as the base scenario:

  • 11T of TAM of asset tokenized (without equities)

  • 30% of this asset will be lent

  • Share of the $CFG market 10%

  • Avg APY to lenders 10%

  • 20% of total revenue will be streamed to protocol (ATM 0)

  • P/S 10x

In 2030 the market cap of the protocol could be worth around 65B. In a more optimistic scenario (50T TAM, 50% asset lent, share 20%) the market cap will be 1T. We can assume the the potential market for a successful actor is really huge and sits between 20B-1T.

Other players to look at are, that could expand business focalized on different verticals:

Other interested application could be:

  • @MakerDAO generate stablecoins with RWAs

  • @opensea/ @Uniswap exchange and sell NFTs through liquid market

  • @indexcoop build different portfolio with different exposure (art portfolio of different artists, REIT of NY/SFA exposure)

  • tokenized Pre IPO stocks and build a secondary fluid market

  • tokenized public good and utilized DAOs to supply capital

  • tokenization of agricultural/natural land and build CO2 mitigation projects with collateral

Additional use cases that come into your mind?

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