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Real World Assets: The Bridge Between TradFi and DeFi

Binance Research (Mac Naggar)


  • 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.

  • The potential impact that RWAs could have on DeFi seems transformative.

  • RWAs can offer yields to DeFi which are sustainable, reliable, and backed by traditional asset classes.

  • RWAs can render DeFi to become more compatible with external markets, resulting in greater liquidity, capital efficiency, and investment opportunities.

  • RWAs allow DeFi the ability to bridge the gap between decentralized financial systems and traditional financial systems.

  • RWAs can represent tangible assets, such as gold and real estate, as well as intangible assets, such as government bonds or carbon credits.

  • 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.

  • The ability to easily fractionalize and disperse RWAs in DeFi renders previously unfractionalized, total sum, private credit investments to become accessible to a new set of investors.

  • Fixed income is the predominant market in the RWA space.

  • There are a number of topical trends that are shaping the evolution of the RWA ecosystem: layer 1 RWA protocols, regulation and enforcement mechanisms, macro environment.


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