Sergey Nazarov, the co-creator of blockchain oracle service Chainlink (LINK), believes that real world assets (RWAs) are poised to become the next big trend in the digital asset space. RWAs in the crypto world involve tokenizing assets from traditional markets such as real estate, loans, bonds, and more on-chain.
According to Nazarov, RWA tokenization is gaining momentum in the blockchain industry and has the potential to hold more on-chain value than cryptocurrencies. He points out that the total value that can be tokenized as RWAs is in the tens of trillions, with only a small percentage currently in this format. Major institutions like Blackrock and Fidelity are already participating in the RWA trend through tokenized funds, with more expected to join in the future.
Nazarov highlights the benefits of on-chain RWAs, stating that they provide a secure format for asset ownership and transferability. These assets can be easily purchased and transferred across different countries and financial systems with less friction compared to traditional infrastructure. Additionally, RWAs offer easier access to global liquidity, which has been instrumental in the growth of cryptocurrency over the years.
On-chain RWAs have the ability to hold important data about underlying assets more efficiently than traditional systems. For example, putting net asset value (NAV) data on-chain can significantly speed up the redemption process, reducing the timeline from months to minutes and providing economic benefits. As more funds’ administration and operations move on-chain, there is potential for increased efficiency and lower operating costs.
In conclusion, the trend of tokenizing real world assets on blockchain is gaining traction and has the potential to revolutionize the way assets are managed and transferred. With the involvement of major institutions and the efficiency benefits offered by on-chain RWAs, this trend is expected to continue growing in the coming years.