What Is RWA? Real World Assets Guide

Real World Assets (RWA) is the general name for financial products that represent physical assets like gold and silver. In the cryptocurrency market, RWA covers a wide range from tokenization of assets to protocols that generate returns from various economic activities.

What are Real World Assets (RWA)?

Real World Assets (RWA) refers to virtual financial products that represent real-world assets in decentralized finance (DeFi). In other words, RWA is the on-chain representation of physical assets. Tokenized assets, for example stablecoins, are the most common RWAs in the crypto world. These are cryptocurrencies backed by physical assets. Properties tokenized through NFT technology can also be counted among popular RWAs.

Moreover, the scope of RWAs has expanded over time. Now, assets that can be definitively proven (e.g., digital music downloads) and generate income reflected in company balance sheets are also considered within the scope of RWA. These income streams can be brought on-chain through various protocols. Additionally, RWAs, especially stablecoins, are also used by crypto lending and borrowing protocols. In this respect, RWA tokens and RWA coins form the foundation of many DeFi protocols.

Stablecoins as RWA

Stablecoins, which are among the most popular cryptocurrencies, are also the best example of the RWA type. Stablecoins, whose prices are pegged to physical assets like euros, dollars, Turkish lira, and gold, offer price stability for cryptocurrency investors. These types of cryptocurrencies also facilitate access to physical products. Here are a few examples of stablecoins backed by real-world assets:

• Gram Gold Token (GRAMG): GRAMG, tradeable for Turkish lira on Bitlo, is a stablecoin backed by physical gram gold. GRAMG, whose price is always equal to gram gold, can also be seen as the cryptocurrency equivalent of gram gold.
• Cropto Wheat Token (CROW): CROW, backed by wheat, one of the most important agricultural products, eliminates storage costs for those wanting to invest in agricultural products while offering speed and accessibility. This stablecoin, available on Bitlo, is one of the rare RWAs pegged to an agricultural product. You can access all Cropto Agriculture Tokens, including CROW, by clicking here.
• LiraT (TRYT): TRYT, tradeable for Turkish lira on Bitlo, is a stablecoin produced against real Turkish lira.

Real World Assets (RWA) Use Cases

Everyone wants an Andy Warhol painting, but only a collector could buy one. At least, that's how it used to be. But now you can convert a Warhol painting into financial products and sell your shares to multiple people!

In recent months, a company called Freeport tokenized several Andy Warhol paintings by dividing them into shares. Each painting consists of 1000 tokens representing 1000 shares. Thus, anyone who buys these tokens can own a share of a Warhol painting. This is an example of Real World Assets in use!

As we can see in this example, RWAs can facilitate access to physical assets. Even a rare product can be distributed among many people, and shareholders can earn income from every commercial activity of this product.

A similar situation applies to financial products. The aforementioned Cropto Wheat Token (CROW) helps everyone invest in wheat. When you buy 1 CROW token, you purchase an asset equivalent to 1 kg of wheat. Moreover, the company producing CROW tokens actually holds physical wheat in their warehouses equal to the amount of CROW in circulation. Therefore, CROW is a financial asset that represents a physical asset and is collateralized with this asset. It is a real world asset, an RWA. When someone buys CROW, they invest in an asset that operates on blockchain but is collateralized with physical wheat.

Real World Assets and Crypto Lending Protocols

Real World Assets (RWA) also play an important role in the working mechanism of some DeFi crypto lending protocols. Such DeFi protocols allow tokenized real estate, artwork, commodities, and other assets to be used as collateral for obtaining credit.

What are the Advantages of Real World Assets (RWA)?

RWA coins and RWA tokens, especially stablecoins, provide many important benefits for both traditional investors and cryptocurrency investors. These benefits include efficiency, disintermediation, transparency, low cost and high liquidity.

Efficiency

Tokenized real world assets, or RWAs, increase efficiency by allowing high-value assets to be divided and traded 24/7 on digital exchanges, eliminating intermediaries, and enabling large-scale global transactions to be completed quickly. This facilitates processes such as cross-border agreements and automatic income/profit distribution.

Disintermediation

One of the most important innovations of blockchain technology in finance is eliminating the need for a trusted intermediary. Consensus mechanisms and smart contracts allow RWAs, like all blockchain assets, to be bought and sold without needing a trusted intermediary. All real world assets from gold to silver and from dollars to agricultural products can benefit from blockchain's intermediary-free transaction advantage by being tokenized, i.e., converted into RWA tokens.

Transparency

Blockchains are public and all transaction history can be viewed by everyone. Naturally, transactions made on blockchain are transparent. RWAs ensure transparency of transactions by bringing physical products to blockchain. Additionally, the immutability of blockchain records definitively shows the ownership of assets operating on blockchain.

Cost

Eliminating intermediaries reduces traditional transaction fees and documentation costs. Therefore, RWA ownership and RWA transactions require extremely low costs unlike storing or transacting with traditional assets.

Liquidity

RWA tokens or RWA coins can always be easily bought and sold. Trading and transfer with assets operating on blockchain is possible 24/7. Naturally, this increases the liquidity of real assets.

Where to Buy Real World Assets (RWA)?

RWA coins and RWA tokens can be purchased through centralized or decentralized cryptocurrency exchanges. Bitlo, one of Turkey's established cryptocurrency exchanges, lists dozens of RWA coins and RWA tokens from CROW token to GRAMG, from USDT to TRYT. You can easily buy/sell RWA with Turkish lira through Bitlo.

Frequently Asked Questions About Real World Assets (RWA)

What is RWA?

RWA are digital financial products that represent real world assets, with prices pegged to these assets and backed by the same assets.

What are the Most Popular RWA Coins?

Among the most popular RWAs are stablecoins like Cropto Wheat Token (CROW), Gram Gold Token (GRAMG), LiraT, and TRYT.

How to Buy RWA Coins?

Like all cryptocurrencies, RWA coins are listed on cryptocurrency exchanges. In Turkey, you can buy and sell dozens of different RWA coins with Turkish lira through Bitlo.