Stablecoins and PayFi Leadership: Decoding the New Wave of RWA and Future Blueprint

Original Article Title: "WOO X Research: Can RWA Become the Next Wave of Wealth Growth?"

Original Source: WOO X Research

Narrative:

RWA (Real World Assets), literally translated as real-world assets, derives its value from bridging traditional assets with the web3 world to achieve the digital representation of real-world assets. This allows for the efficient utilization or mobilization of real-world assets (such as real estate, art, etc.) to enhance asset liquidity. Moreover, with the integration of RWA and blockchain technology, RWAs can transcend geographical limitations. Regardless of location, currency system, or other influencing factors, users can easily transact or otherwise leverage assets through this combined approach. When RWA is mentioned, people often think of real estate, stocks, and the like. Looking at the fundamental feature of RWA tokenization, stablecoins also fall under the RWA track. It seems like RWA is now closer to us. This also represents another aspect of the RWA narrative, namely, "inclusive," enabling investors who do not have sufficient capital to enter high-value markets to indirectly invest in high-value RWA tokenized products.

What Lies Ahead?

Over the past year, the overall TVL of RWA has shown a fluctuating upward trend. In this cycle, RWA, AI, MEME, and others are relatively popular tracks. RWA has always been one of the more closely watched tracks.

Image Source: https://defillama.com/protocols/RWA

In the future, RWA is likely to continue its trend, and the integration of RWA with the DeFi track may attract more and more investors' attention. In fact, high-value assets such as real estate and commodities face settlement challenges in transactions, and various countries have different laws and regulations. Most likely, projects related to these types of high-value assets will be constrained in development due to the challenges in implementation and regulation. Therefore, for projects of this kind in the RWA track to make better progress, there must be significant progress in PayFi or cross-border settlement regulation and RWA asset validation rather than relying on third parties in various locations for settlement or validation.

In addition, the RWA project related to stablecoins is relatively stable. Basically, the mainstream market may still be dominated by the US dollar, with the euro following. However, in the future, this type of project may see country/region differentiation, where "investors from a certain country/region mostly choose a specific stablecoin." In this scenario, a stablecoin with local regulatory approval can seize the market first. The last trend, which should also be a major trend in the future, is that stablecoins' pegged assets could be bonds, securities, stocks, or funds, leading to more products and projects in the future. The reason behind this is that the settlement and regulatory aspects mentioned earlier have a better advantage than assets like real estate. However, in the early stages of such projects, only institutions with some influence in the traditional financial sector (such as BlackRock) participating in related projects may generate a considerable wave of economic benefits. After that, projects involving institutions/organizations with more influence in the Web 3 space may create more community-centric RWA projects.

Projects

Below is an overview of recently funded projects, presented from an objective perspective for discussion purposes.

OpenTrade

OpenTrade was founded in late 2022 and is headquartered in London, UK. Its investors include a16z CSX, Circle, Draper Dragon, CMCC Global, Ryze Labs, Polygon, and Kronos Ventures, among others. The current total funding amounts to $8.7 million.

It currently offers four products:

1. US Treasury Bonds Vaults: Fixed-term; USDC returns with a fixed term and fixed rate, backed by US Treasury Bonds;

2. USDC Vault: Demand deposit; variable USDC returns. Backed by short-term US Treasury Bonds, money market funds, and other cash equivalents;

3. EURC Vault: Demand deposit; variable EURC returns, backed by euros and short-term euro bonds, money market funds, and other cash equivalents;

4. Fee Rate+ Vault: Fixed-term; backed by investment-grade corporate bonds, commercial paper, emerging market bonds, etc.

Uses the Vault token as a benchmark in accounting and other operations.

USUAL-Government Bonds

It has raised a total of $8.5 million and is a Binance Launchpool project.

Overall, it revolves around three types of tokens:

1. USD0: This is a stablecoin backed 1:1 by Real-World Assets (RWA), permissionless, and fully compliant, aggregating various U.S. Treasury tokenizations.

2. USD0++: It is an enhanced Treasury bond that uses USD0 as collateral locked principal, with USUAL as an incentive.

3. USUAL is its governance token.

Tokenomics: Total supply of 4 billion tokens, with an initial circulating supply proportion of 12.37%.

Image Source: https://docs.usual.money/usual-products/usual-governance-token/usual-tokenomics/distribution-model

Token distribution is as follows:

Huma Finance

Currently, it has raised a total of $46.3 million, with a co-founder of Chinese descent. In general, it is a PayFi lending project. The most recent round of financing includes $10 million in equity investment and $28 million in Huma Platform real asset investment. Distributed Global led the investment, with participation from Hashkey Capital, Folius Ventures, Stellar Development Foundation, and others. In April 17, 2024, it merged with Arf, focusing on real-world asset tokenization-related PayFi.

Contributors utilizing the Huma Points tracking protocol. Currently providing cross-border payment financing, digital asset-backed credit cards. This is achieved through various liquidity pools, such as Arf-Cross-Border Payment Financing Pool (based on USDC instant settlement, simplifying cross-border payments); Rain Accounts Receivable Pool (assisting entities like DAOs in managing expenditures through salary card); Jia Pioneer Fund Pool (providing decentralized financing for small businesses, rewarding borrowers who repay with ownership. i.e., "Small Business Credit") and other liquidity pools to facilitate cross-border payment financing.

This article is contributed content and does not represent the views of BlockBeats.