Connecting Real-World Assets (RWA) On-Chain

Red Chain is growing in stature.

Welcome Anon, today we are going to dive into a chain the vast majority of on-chain users seem to have forgotten but seem to be cooking up something interesting.

Since DeFi was created in 2018 and properly took off in the DeFi summer of 2020, it has been full of speculation and ponzinomics despite how innovative it is. The big question has been whether it will provide any real-world usage or remain niched and obscure to a small internet community of degens.

While I am biased in this case, having previously worked in a bank with a first-hand view of how backward and inefficient the systems (information is unmatched though) are, I believe DeFi is a step in the right direction. However, that doesn’t mean that it is perfect because it’s far from it. The amount of scams that currently goes through unpunished while protocols consistently get hacked doesn’t paint a good picture. $3.8B was stolen in DeFi in 2022, the industry has a perception problem and some work needs to be done.

One of the ideas for bringing more utility to DeFi has been the introduction of tokenized real-world assets that can be borrowed against. It allows for a greater amount of capital to enter the industry and ties us together with institutions. There have been mixed reactions to this as some don’t want any government to be involved with the crypto market (not going to happen, get real), and bringing new assets on-chain is bound to be regulated.

If done right, it will provide a great opportunity for a nascent space that is still trying to find its way. Large DeFi protocols such as MakerDAO are capitalizing and moving quickly on this potential as they want to establish themselves in the market. However, the dark horse is currently an ecosystem that is out of favor of the larger crypto community but should not be taken lightly and that is Avalanche.