Best RWA Projects

Best Real World Assets (RWA) in 2024

Real-world asset (RWA) tokenization is one of the hottest narratives in the blockchain industry, with a potential market size in the hundreds of trillions of dollars. Tokenized assets bridge the gap between traditional and decentralized finance (DeFi). The sector is currently represented by five key protocols that our team has done extensive research on and identified as the best in their respective categories for 2024.

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1. Ondo (ONDO)

Ondo Finance tops the list as the best overall RWA project by building strong relationships with trillion-dollar asset managers from traditional finance (TradFi). Ondo collaboration with BlackRock on tokenized funds is exemplified by a recent $95 million asset transfer into BlackRock's BUIDL fund. This involved Ondo's own tokenized asset, OUSG, backed by short-term US government bonds yielding 4.73% APY and 24/7 instant mints and redemption.

Ondo's stablecoin USDY offers a competitive 5.3% yield, appealing to investors seeking stable USD-denominated returns. Ondo's native token (ONDO) has grown by 600% in the past year, reaching a $1.58 billion market cap, while the protocol currently has $553 million in total value locked (TVL). The Ondo token bridge and converter is another well-liked product that facilitates asset movement across chains.

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2. Pendle (PENDLE)

Pendle is the top yield-bearing protocol that recently joined the RWA class. Its unique feature is the DeFi yield management through Principal Tokens (PT) and Yield Tokens (YT). These standardized yield tokens facilitate advanced strategies such as fixed yield, long yield, and yield enhancement without additional risk, leveraging Pendle's robust Automated market maker (AMM) and innovative yield derivative products like vePENDLE.

Recently, Pendle integrated MakerDAO’s Boosted Dai Savings (sDAI) and Flux Finance’s fUSDC stablecoin into their RWA product, offering attractive yields from traditional finance sectors like sDAI's fixed 8.65% APY. The PENDLE token is highly volatile, with its market capitalization increasing by 240% in the last year to $600 million, but it has recently declined due to expiring airdrop markets, causing its TVL to drop by $3 billion in a single week in June 2024.

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3. Chainlink (LINK)

Chainlink is uniquely capable of meeting all requirements for tokenized real-world assets while upholding the stringent security standards of financial institutions and capital markets. These include enriching RWAs with real-world data, securely transferring them cross-chain, and connecting them to offchain data sources across various blockchain platforms. Chainlink sets industry standards with services like Proof of Reserve for transparent asset backing.

Chainlink's robust infrastructure has garnered significant interest from major banks and financial infrastructures globally, including collaborations with DTCC, the world's largest securities settlement system processing over $2 quadrillion annually. As the oldest protocol on the list, the LINK token has a market cap of $8.7 billion after gaining 117% in the last year.

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4. Mantra (OM)

Mantra is the first security-focused Layer 1 platform designed for real-world assets, having recently secured an impressive $11 million in funding. The MANTRA Chain, slated to launch soon, aims to facilitate the seamless swapping of tokenized real estate, commodities, and other assets, pending licensure from Dubai's crypto regulator VARA.

Although the network is not yet operational on Cosmos, where it is planned to reside, Mantra's native token OM has already garnered attention with a market cap of $676 million, positioning it competitively among other platforms focusing on real-world asset tokenization. OM serves multiple functions within the ecosystem, including governance participation, staking rewards, and access to diverse DeFi services.

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5. Synthetix (SNX)

Synthetix concludes the top 5 RWA projects list by providing liquidity for permissionless derivatives like perpetual futures, options, and parimutuel markets across various EVM chains. Synthetix Network Token (SNX) underpins this ecosystem, allowing users to mint, hold, and trade diverse derivatives including commodities, fiat currencies, and stocks in a decentralized manner.

Backed by a $20 million investment in 2023 to expand its presence in the real-world asset (RWA) crypto market, Synthetix has enhanced its version 3 to improve accessibility and utility for RWA crypto assets, aiming to foster broader adoption. Despite its pivotal role, the SNX token has experienced a 13% decline in market cap over the past year, reflecting market dynamics in the crypto space.

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What Are Real-World Assets (RWAs)?

Real World Assets (RWAs) in crypto represent the digitized versions of tangible or traditional financial assets such as government bonds, real estate, or gold on blockchain platforms like Ethereum. This conversion effectively converts the ownership rights to these physical assets into digital tokens.

Numerous projects are now focusing on tokenizing diverse assets including cash, commodities, real estate, and more. The combined market cap of all RWA-related coins currently stands at $35.5 billion according to CoinMarketCap, representing approximately 1.57% share of the entire crypto industry.

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The Rise and Potential of RWA Tokenization

RWA tokenization became possible with Ethereum's launch in 2015 and has gained significant traction recently, especially among major asset managers globally. This capability enables the tokenization and transfer of virtually any valuable asset on blockchain platforms, attracting interest from institutional investors like BlackRock, who foresee a future where all traditional assets migrate to the blockchain.

According to a 2022 report by BCG, the tokenization of global illiquid assets is projected to represent a $16 trillion business opportunity by 2030 in a conservative estimate, with the potential reaching up to $68 trillion under the most optimistic scenarios. The extent of tokenized asset potential varies between countries, influenced by regulatory maturity and the scale of asset classes.

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Bottom Line

Real world assets have emerged as the top narrative in the crypto space in the last 2-3 years thanks to the immense market size potential and interest from institutional investors. RWAs account just for a fraction of the broad crypto market for now, yet the top coins have been among the best-performing assets over the last 12 months.

Our top picks for 2024 include Ondo (ONDO), Pendle (PENDLE), Chainlink (LINK), Mantra (OM), and Synthetix (SNX). Each has its unique role in the tokenization of traditional assets.