SharkTeam: On-chain Data Analysis for RWA Track

Real World Assets (RWA) refers to the process of tokenizing tangible assets with stable value and income, such as real estate, automobiles, artwork, etc., and utilizing or trading them on the blockchain.

RWA serves as a bridge between the real world and the DeFi sector, although initially, this track did not receive much attention within the industry. As early as the end of 2020, MakerDAO released plans and guidelines, formally recognizing RWA as a strategic focus. Aave also announced the launch of an RWA marketplace in late 2021, allowing collateralized lending with real-world assets. It wasn't until March of this year that three notable events occurred in the industry, further propelling the development of RWA: Citigroup released a report stating that almost everything of value can be tokenized. Binance announced its role as a node operator on the Layer1 blockchain Polymesh. Traditional finance institutions such as Goldman Sachs, Hamilton Lane, Siemens, and KKR expressed their efforts to bring their real-world assets onto the blockchain.

SharkTeam's statistics on some characteristics of DeFi and TradFi are as follows:

It can be seen that the transaction of actual assets on the chain greatly reduces the transaction cost of TradFi, and the use of point-to-point transactions on the chain reduces the participation of middlemen, and the transaction assets on the chain are transparent and open, which cannot be tampered with, which improves capital efficiency and reduces transaction risk.At present, there are more than 50 RWA projects on the market. The price of native tokens of some projects has increased by more than 10 times in the past 3 months, but most of them have not issued tokens.

1. RWA track analysisIn the report, SharkTeam conducts statistical sorting on popular series such as stocks, bonds and real estate, summarizes the models of each series, and selects top or featured projects for analysis as follows.

1.1 StocksSwarm Markets will be launched in October 2021. As of February 2023, Swarm will launch the world's first DeFi public investment product targeting Apple, Tesla and two U.S. Treasury bond ETFs. It’s worth mentioning that Swarm is decentralized but permissioned, and they link users’ wallets to their identities through a KYC process to enable user self-custody (decentralization), while providing anti-money laundering to law enforcement through KYC and information needed to counter terrorism (licensing and regulation). Users need to go through a process to be approved before the wallet can interact with the Swarm platform smart contracts.

Swarm Markets provides Swap, liquidity pool, pledge and other functions. Different from other exchanges, before Swarm conducts the first transaction, users will be reminded to set up their proxy contracts, and the first transaction will include the network fee for deploying personal proxy contracts, but Swarm will use the proxy in subsequent transactions Contracts are traded to save gas costs. Additionally, Swarm can also be redeemed for crypto vouchers. Swarm crypto vouchers are similar to gift cards but denominated in cryptocurrencies and are currently available in both WBTC and ETH. Users can use Yoti (a digital identity app that provides a secure way for individuals to prove their identity and age to thousands of UK businesses online and in person) and its partner free app Purchase vouchers after EasyID verifies identity. Swarm also provides decentralized over-the-counter trading (dOTC) services, enabling institutions to conduct large transactions on the chain. Through peer-to-peer (P2P) contracts, it will facilitate high-value transactions, reduce slippage and eliminate counterparty risk, while charging 0.3 % of transaction fees.SMT is a token based on the ERC20 protocol on the Ethereum blockchain. The distribution details of SMT are as follows:

The total supply of SMT is 250 million, of which 50% is allocated to the reward pool, 10% is allocated to the community pool, and 20% is reserved for future use. It is expected to be released linearly in 5 years.

1.2 BondsBonds are low-risk safe-haven assets and the main investment product for fixed income. Among them, U.S. Treasury bonds are generally recognized as the market's risk-free interest rate, but with changes in the market environment, the current overall performance is not satisfactory. In the encryption industry, take the lending projects Compound and Aave as examples. According to LoanScan data, in January 2023, the deposit interest rate of USDC on Compound and Aave dropped to 0.81% and 0.65% lower than the interest rate of US treasury bonds. In order to balance risk exposure, many crypto projects have turned to national debt. For example, MakerDAO previously allocated 500 million DAI to invest in U.S. treasury bonds and corporate bonds.In January 2023, Ondo Finance announced the launch of tokenized funds, providing users with the opportunity to invest in U.S. Treasury bonds and agency-grade bonds on the chain. It is understood that Ondo Finance has launched three types of tokens through large and highly liquid ETFs managed by asset management institutions such as Blackrock and PIMCO: U.S. Government Bond Fund (OUSG), short-term investment-grade bond fund (OSTB) and high-yield Corporate Bond Fund (OHYG). Ondo Finance will charge an annualized management fee of 0.15% (0.0125% monthly), which can be found on the fund's product page.

OUSG, a treasury bond fund designed to appreciate in value as interest increases, had a token price of $96.83 as of May 29.

In order to increase the liquidity of the national bond fund OUSG, Ondo Finance specially launched the decentralized lending agreement Flux Finance for it. Flux is a fork of Compound V2. Like Compound, Flux follows a peer-to-peer model and aims to bridge the gap between on-chain and off-chain yields. In Flux, users can earn a certain percentage of interest and obtain fUSDC rewards within the first 30 days after the recommended users use it by sharing a unique referral link. fUSDC is obtained by users (lenders) by lending their stablecoins on Flux, and borrowers can borrow stablecoins with OUSG as collateral. Flux provides two layers of rewards: the baseline layer (20% reward rate) and the promotion layer (30% reward rate). For example, when the level is 20%, if the Flux depositor recommended by the user earns $6,000 of stablecoin interest within the first 30 days of use, the user will receive a fUSDC reward of $1,200. To qualify for the Boost Tier rewards, users must refer users who have accrued at least $20,000 in interest within the first 30 days.

1.3 Real estateThrough the tokenization of real estate, RWA converts real estate into NFT for transactions or as collateral for loans; real estate on the chain can fragment housing sources, allowing multiple users to hold part of the ownership, which is generally very beneficial to retail investors.Tangible Protocol leverages real estate-backed native yield stablecoin Real USD (USDR), providing users with access to tokenized and segmented RWA real estate through its marketplace. On Tangible, anyone can use USDR to purchase valuable physical goods from the world's leading suppliers. USDR is a US dollar-pegged stablecoin launched by Tangible in 2022. It can be minted with TNGBL or DAI at a ratio of 1:1, and can be redeemed at any time by converting it to DAI at a ratio of 1:1. Using the redemption function will generate 0.25% cost.

TNGBL is the governance token of the Tangible market with a maximum supply of 33,333,333. TNGBL can be used as a reward Token to encourage the use of the market and subsidize USDR income. At the same time, it has a sharing mechanism (incentives lock TNGBL), and can also be used as USDR support, which can be used to mint USDR. The initial distribution plan promises to distribute the majority to the DAO and the community (70.8%). The rest is mostly reserved for the team, investors, advisors, and Tangible Labs. Another 1.25% will be sold via PeakDeFi’s IDO in April 2022.When users browse and purchase goods on Tangible's market, they will start to mint TNFT ("Tangible non-fungible token"), which represents the real thing. The physical item is then sent to Tangible’s physical vault and the TNFT is sent to the buyer’s wallet; when a user purchases an item from another user on Tangible’s marketplace (i.e. the secondary market), the existing TNFT is transferred to the purchase in the recipient's wallet. At the same time, USDC tokens are sent from the buyer's wallet to the seller's wallet. Smart contracts handle the associated transaction fees, item purchase fees, and storage fees. The item will remain in the warehouse unless the buyer decides to redeem it. Tangible charges a market fee of 2.5% per trade. 33.3% of it is used to purchase and burn TNGBL, and the remaining 66.6% is allocated to TNGBL holders (3,3+ NFT holders).

2. On-chain data performanceAccording to the statistics of ChainAegis, SharkTeam's on-chain analysis platform, let's analyze the real performance of the RWA track on the chain.

2.1 Top 10 RWA Cryptocurrencies by Market CapBelow are the top 10 RWA tokens ranked by market capitalization:

$MKR issued by Maker DAO is currently the largest RWA token, with a 24-hour transaction volume of 11.45M; $POLYX issued by the regulated institutional-level Layer1 blockchain Polymesh ranks second, with a 24-hour transaction volume of 6.3M. Ranked third is $CFE issued by the credit agreement Centrifuge, with a 24-hour transaction volume of 382.55K.

2.2 Changes in the number of RWA token holders on EthereumThe figure below shows the changes in the number of RWA token holders on Ethereum. In general, the number of token holders has continued to grow, an increase of about 72.53 times compared to the initial period. Among them, on January 11, 2022, November 22, 2020, and July 26, 2022, the top 3 daily growth volumes are 1899, 1546, and 1525 respectively.

2.3 Swarm MarketsSince the beginning of this year, the TVL of Swarm Markets has been rising all the way. On April 5, the TVL reached a record high of US$1.9267 million, and then showed a downward trend. As of May 31, 2023, Swarm Markets TVL is US$933,000, of which 64% is provided by SMT, 14% is from WETH, and stablecoins USDC and DAI account for 12% and 9% respectively.

On August 8, 2021, not long after Swarm Markets went online, its market capitalization rose to US$33.3778 million, and its trading volume on that day was US$842,500, a decrease of 122.62% from the previous day (the highest trading volume in history was US$1.6493 million). Since then, the data on the chain has performed mediocrely. The average TVL in 2022 is 1.28 million US dollars, and the average transaction volume is 11.9239 million US dollars. From March 2023, the market has improved slightly. On April 6, the daily trading volume was 1.2076 million US dollars, and the TVL reached 10.5134 million US dollars, a record high in the past year.

As of May 31, the total number of SMT holders was 2,309. The following figure shows the top 10 addresses on Ethereum ranked by currency holdings:

It can be seen that addresses 0x4a...36b5 hold about 100 million coins, ranking first; addresses 0x85...70f6 hold 50 million coins, ranking second. The total amount of currency held by the two reached 60%.

2.4 Ondo FinanceOndo Finance launched on-chain bonds in January this year. On May 20, TVL hit a record high of US$138 million, and has since declined slightly. As of May 31, TVL was $103 million.

SharkTeam’s statistics on the top 10 holders of fUSDC on Ethereum are as follows, among which the top3 addresses account for 72.88% of the total currency holdings.

Address 0x86...AB37 holds 494 million coins, accounting for 47.59%, ranking first; address 0x7F...74a9 holds 164 million coins, accounting for 15.86%, ranking second; address 0x98.. .3718 holds 98.101 million coins, accounting for 9.43%, ranking third.

2.5 TangibleTangible’s performance has been mediocre since its launch. Until February 3 this year, its TVL began to grow continuously. As of May 31, it reached US$33.3168 million, an increase of 370.95 times compared to February.

From February 2023, the market value and trading volume of USDR will show a trend of substantial growth. On May 12, the trading volume reached US$3,417,400, a record high since its launch, and the TVL on that day was US$23,197,300. On May 30, TVL reached a historical peak of US$31.3644 million. In just half a month, TVL rose by 35.2%.

The figure below shows the APY changes of USDR on the Polygon chain. Annual Percentage Yield (APY) refers to the amount earned by compounding interest (interest + principal) in one year. It can be seen that the current APY has not changed much compared with the initial stage of launch, and has a slight downward trend, with a decrease of 5.78%.

As of June 1st, USDR was issued on the Polygon chain, with a total of 251 holders. Among them, addresses 0xa1...3e1f hold 17.471 million coins, accounting for 55.8%, ranking first; addresses 0xaf...4d4b hold 13.672 million coins, accounting for 43.67%, ranking second; The total proportion of the two is as high as 99.47%.

3. Influence and controversyRWA lowers the barriers between TradFi and DeFi, and the way of tokenization attracts more traditional funds into the DeFi market, adds more types of assets available to the DeFi market, and promotes the interoperability between traditional finance and the encryption industry . At the same time, RWA reduces the cost of financial transactions, avoids complex intermediaries and handling fees, and breaks geographical restrictions, allowing assets to circulate globally, forming a faster and simpler transaction system. It is worth mentioning that RWA is not a new concept. The common stablecoins USDC and USDT are essentially RWA, which is a mapping of the real US dollar on the chain.There are many benefits of RWA, but only compliant RWA can sustain large-scale development. The biggest criticism of USDT at present is the superficial centralization, and the core assets are still opaque. How to put real assets on the chain, how to ensure the authenticity and legality of assets while on the chain, and prevent money laundering and other illegal activities are difficult problems that RWA needs to solve. This will also involve various legal, regulatory and technical requirements.

About us

SharkTeam’s vision is to comprehensively protect the security of the Web3 world. The team is composed of experienced security professionals and senior researchers from all over the world. They are proficient in the underlying theory of blockchain and smart contracts, and provide services including smart contract auditing, on-chain analysis, and emergency response. It has established long-term cooperative relationships with key players in various fields of the blockchain ecosystem, such as Polkadot, Moonbeam, polygon, OKC, Huobi Global, imToken, ChainIDE, etc.Official website:


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