From cointelegraph by Victoria Li

  “At some point, the RWA market will consolidate, leaving only a few clear winners. Dealing with compliance and licensing is no easy task. But for RWAs to really boom, it’s not about overcoming the regulatory burden,“ said John Patrick Mullin, CEO and co-founder of MANTRA, during the recent Cointelegraph X Spaces, “it’s about finding ways to implement technology and automation within progressive regulatory frameworks.“

Mullin pointed out that tokenizing something doesn’t solve the problems:  “In many cases, people come to us with low-quality assets and expect that creating a token will magically make it more valuable. But it’s critical that you create tangible, real value for both the issuer of the tokenized product and the end buyer.“

According to him, value creation can take several forms, from fractionalized access for retail investors to increased liquidity and composability for institutions. “If you take those three fundamental things - high-quality product, value creation for the issuer, and value creation for the end-user - those are the things we look at,“ he said.

MANTRA, a layer 1 blockchain built specifically for RWA tokenization with a focus on compliance, launched its mainnet in October 2024. Through its network with built-in robust security and compliance, MANTRA offers institutional investors the ability to deploy capital on the chain and execute large RWA transactions while others access traditionally illiquid assets. The OM token is used for staking to validators, participating in the delegated proof-of-stake consensus mechanism, as gas for transactions, governance, and within various applications in the Mantra ecosystem.

“Our goal is to be the ledger of record for asset issuance or RWAs,“ Mullin emphasized. “We believe that licensing and regulatory enforcement are more effective at the application layer, not the protocol level. So we work with licensed venues and tokenization platforms because they are the ones who are actually doing the regulated activity. MANTRA is just software, a technology that helps support RWAs and asset organization with compliant partners.“

He continued: “It’s critical that for RWA mass adoption at a retail or more mass market level, we need public blockchains that are composable into a broader DeFi ecosystem. But at the same time, we at Mantra have built a permissionless layer that allows asset issuers, tokenization platforms and regulated venues to easily, simply and compliantly issue, distribute and manage RWAs.“

Mullen acknowledged that the user experience for onchain activity is still challenging and needs improvement. For RWAs, Mantra has developed a system called the Mantra Token Service (MTS), which allows for the burning, freezing and reminting of tokenized assets to maintain proper governance and protect tokenholders and investors.

Currently, MANTRA has a presence in Hong Kong, Singapore, and several other regions, with a primary operational focus in the Middle East, particularly Dubai. “We work within the regulatory framework and regulatory constructs, but at the same time we engage in conversations with regulators to help them with updates and improvements,“ said Mullin. MANTRA’s partner list also includes BlackRock, SwissBorg, Ondo, Chainlink, Kelpr and Google Cloud, among others.

The speaker also noted MANTRA’s work to expand its DApp ecosystem, which includes secondary marketplaces, a soon-to-be-licensed onchain RWA liquidity hub called Omega, and collaborations with various DeFi providers for lending, borrowing, and fractional real estate products. He also mentioned explorations in private credit, payments and carbon credits.

In addition, Mullin revealed that they are also in the process of exploring intellectual property: “These things are highly emotional for individuals and have a large captive audience. Whether it’s your favorite musician, artist, or sports team, there’s a lot of IP and content that can be curated around it and turned into financial value if it’s in a tokenized form.“

Looking ahead, Mullin outlined a three-phase approach to developing the RWA space: “Right now, we’re in phase one, where we’re focused on the supply side, getting high-quality assets on the chain. Phase two will focus on liquidity and secondary market venues, while the final stage will unlock the composability of RWAs, allowing them to be used in different DeFi applications. For example, if you have a house title in your name in tokenized form, you can go to a lending protocol and borrow against it permissionless, which is a really novel use case.“

He has ambitious plans for MANTRA: “I want us to have $100 billion in RWA TVL by the end of 2026. Right now, we’re literally teaching one person at a time how to do things on the chain, which is pretty slow. But we’re legitimately bringing in new money, new capital, and new users who have never done it before. That’s a really powerful thing. Over time, it will snowball into something that will take us to kind of the pinnacle of RWA where we want to be. But it will take time.“