Real-World Assets (RWAS) Tokenization in Web3: Transforming Finance and Ownership

Phulchand Saraswati ()
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Phulchand Saraswati: RWTH Aachen University, Department of Mechanical Engineering

A chapter in Tokenizing the Future, 2025, pp 215-226 from Springer

Abstract: Abstract The world is currently undergoing a remarkable transformation, driven by technological advancements that were once impossible. The evolution from Web 1.0 to Web 2.0 has played a pivotal role in shaping today’s digital landscape. We are at the forefront of Web 3.0, a paradigm with boundless potential to create a more promising future. Web 3.0 introduces several key features, including decentralization, smart contracts, data ownership, privacy protection, and decentralized applications (DApps), creating a more precise, efficient, and interconnected web environment. Within this evolving digital landscape, Decentralized Finance (DeFi) stands as a revolutionary force in the financial sector, aiming to establish an open and decentralized ecosystem for various financial activities. At the heart of this transformation is tokenization, which represents ownership of tangible assets as digital tokens on blockchain ledgers. This innovation has harnessed the power of blockchain technology to digitize real-world assets, encompassing real estate, equities, bonds, art, and commodities. These digital tokens are divisible, transferable, and programmable, enhancing liquidity, reducing friction in asset transfer, broadening the investor base, and infusing greater fluidity into the market. Transparency and security are crucial advantages of Real-World Asset (RWA) tokenization. Embedded smart contracts within tokens automate dividend distributions and compliance enforcement functions, eliminating the need for intermediaries and extra charges. The RWA tokenization market is still in its infancy stage but exhibits promising signs of growing adoption and an increasing total value locked (TVL). As of June, RWAs have climbed to the 10th position in DeFi sectors, up from 13th place just a few weeks earlier tracked by DeFi Llama. According to a report by BCG, tokenized assets are projected to reach a market valuation of US$16 trillion by 2030. In summary, integrating RWAs into the Web 3.0 landscape signifies a profound shift in the financial paradigm. Tokenization, along with the principles of Real World DeFi, holds the potential to democratize access to wealth, foster financial inclusion, and reshape conventional notions of ownership and investment. As we continue on this transformative journey, the global financial landscape is at the tipping point of an era where the benefits of tangible assets become universally accessible, transcending geographical and socioeconomic constraints.

Keywords: Web 3.0; Decentralized finance (DeFi); Real-world assets (RWAs); Tokenization; Total value locked (TVL); Blockchain technology (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/978-3-031-91405-8_15

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