RWAs: You need to know this! Not all tokens are created equal.
As the tokenization of real-world assets (RWAs) narrative begins to gain traction in the cryptocurrency space, it’s crucial to grasp the nuances and terminology associated with this exciting new trend. If you’re new to this subject, I suggest reading our “Understanding the tokenization of RWAs” article first to get acquainted with the basics.
Here at StrikeX, we have little doubt that the tokenization of real-world assets will be the major contributing factor to crypto mass adoption. But to truly grasp the potential of this technology, you need to know that not all tokens are created equal…
Synthetic RWAs vs Tokenized RWAs.
Synthetic
A Synthetic RWA token is an on-chain token that gives the holder exposure to the price of a real-world asset. Holding a synthetic asset token does not afford ownership rights to the underlying asset. Simply put, you do not own the real thing.
Tokenized
In contrast, Tokenized RWA tokens offer a digitised replica of the real-world asset, which can provide token holders with ownership rights, such as voting and dividend payments. In short, you own the token; you own the real thing.
Collateralisation is another crucial aspect to consider. The true value of any token, whether it is synthetic or tokenized, depends on the quality of the asset it’s collateralised with. For instance, a synthetic stock token might be collateralised by a cryptocurrency, which can vastly increase the risks and volatility of the token’s value. In contrast, Tokenized RWAs are collateralised by the real-world asset itself, which gives intrinsic value to the token’s value and dramatically improves stability.
At StrikeX, we are at the forefront of developing an ecosystem that allows for the tokenization, transaction, and trade of tokenized real-world assets in a secure and compliant manner. Our primary focus is on the tokenization of global stock markets, which have enormous potential to transform the financial landscape.
We believe that although synthetic tokens can play an essential part in decentralised markets by facilitating price exposure-based trading for investors, the future of financial markets is rooted in the utilisation of fully collateralised and compliant tokenized real-world assets. By adopting this approach, we can ensure that the value of the token is inherently linked to the underlying asset, providing a sense of security for participants that their holdings are fully backed and collateralised by tangible real-world assets. This level of confidence is essential for widespread adoption.
The StrikeX tokenized RWA ecosystem
Learn about the StrikeX ecosystem and how we are harnessing the power of tokenized RWAs to deliver a suite of products & solutions ready to dominate the tokenized economy.
https://tradestrike.io/RWArevolution
StrikeX 2023 Q2 Newsletter
As we move into the second quarter of 2023, we take a look back at what we have already achieved at StrikeX so far this year and look to the quarter ahead to see what’s in store as we continue to build, launch, and innovate in the fast-paced space of blockchain technology.
— The StrikeX Team
Learn more about our project on www.tradestrike.io
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