Multicoin Capital: Most discussions about RWA are wrongly framed

Author: Kyle Samani, co-founder of MMulticoin Capital; translation: Golden Finance 0xxz

There's been a lot of talk about RWA lately. I find that most of these discussions are framed wrong. Like NFTs, RWAs are a fairly horizontal term that refers to many different things.

  1. The PFP is obviously very different from the music NFT, and the music NFT is very different from the sword in the game. These are all NFTs, but their go-to-market methods (GTMs) are completely different.

  2. RWA is similar in this respect. RWA includes fiat-backed stablecoins such as USDC and USDT, treasury bonds, bonds, stocks, commodities, etc.

  3. How they go to market has largely nothing to do with each other, consider Provenance, for example, the most mature and focused attempt to bring the entire bond market on-chain.

  4. Bringing the bond market to the chain is not issuing bonds (some customized versions have appeared on Ethereum in the past 5 years).

  5. Bringing the bond market on-chain is a matter of standards, and you need to get all parties involved to agree to the new standard: issuers, underwriters, fund managers, auditors, buyers, sellers, brokers, banks, etc.

  6. My point is that bringing bonds on-chain is a *really* hard problem. Getting all parties to agree to use a new standard is not easy. This requires a lot of focused effort.

  7. Get all parties in the bond market to agree that the new blockchain standard has nothing to do with other categories of RWA. The path to market is completely different.

  8. Another interesting problem with RWA is synthetic assets. There are many assets that are easier to synthesize and introduce on the chain, such as using perpetual swap contracts.

  9. Synthetic assets cannot completely replace RWA, but in many cases, synthetic assets > spot assets.

  10. Real estate, for example, is “super” difficult to tokenize individual real estate. Parcl makes it relatively easier for people to trade a composite index of a city and, I think, more useful.

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