Week in RWA: Interest Slows While Interest-Bearing Stablecoins Grow

TL;DR…

• Mantra (OM) and XDC defy the trend: While the broader RWA sector struggles, Mantra (OM) and XDC Network have stayed in the green over the past week, showing resilience amid market losses.
• Chainlink leads RWA development: Chainlink dominates RWA development, with over 500 developer events in the last month, outpacing projects like Synthetix and Centrifuge.
• Tokenized tequila distillery sells out fast: Blocksquare's tequila distillery project in Mexico sold out in under 48 hours, highlighting growing investor demand for tokenized real-world assets.
• RWA sector poised for big growth: With more assets like fine art and carbon credits set to be tokenized, and improving macro conditions, the RWA industry is on track for rapid expansion and adoption.

The RWA sector is currently experiencing a slump in interest, with RWA tokens shedding value faster than many other altcoins.

But as the RWA sector continues to evolve, new opportunities are on the horizon, driven by both innovation and upcoming favorable economic trends, a turnaround might be just around the corner.

Let’s dive into the RWA sector to get a better understanding of the current picture:

RWA News Roundup

As one of the most actively developed sectors right now, there is always an assortment of updates and news to keep an eye on.

Catch up on all the latest RWA news with our brief roundup:

• Libre launches on the NEAR blockchain: Libre, a tokenization firm backed by Brevan Howard, has been deployed on the NEAR Blockchain, allowing users to access several digitized funds. NEAR's cross-chain signing feature will then enable these assets to be transferred to other chains without a bridge.
• Tokenized tequila distillery sells out: Blocksquare's latest tokenized tequila distillery project in Jalisco, Mexico, sold out in less than 48 hours. The marketplace pool offers investors fractional ownership in real-world assets through blockchain technology, combining real estate with tequila production
• Chainlink leads RWA by developer activity: Per a recent report from Santiment, Chainlink is currently the most active RWA project by number of developers, with over 500 ecosystem development events in the last 30 days. 2nd place is held by Synthetix with 233.93 and 3rd place is Centrifuge with 96.1.
• Infineo tokenizes $100 million+ in life insurance policies: Infineo, an early-mover in the life insurance industry, has now minted over $100 million in life insurance policies on the Provenance Blockchain. This milestone, which was achieved in just 3 months, is the fruit of a collaboration by Infineo and Provenance Blockchain Labs.

Relative Performance Analysis

The broader cryptocurrency market has now been on a downtrend for almost six months. In this time, the total market capitalization of all cryptocurrencies has slipped from $2.77 trillion down to $2.00 trillion today.

As you might expect, the vast majority of altcoins have seen significant losses during this time, with most down 30-50% over this period.

But how has the RWA sector held up in recent times? Let’s take a look.

According to DeFiLlama’s narrative tracker, the RWA sector is down 0.46% over the last 30 days, which is worse than the market average. Zooming into the last 7 days, we find that all sectors are in the red, with the RWA sector roughly middle of the pack at a 6.1% loss in this time.

But while most RWA tokens are struggling during this time, a couple have managed to largely resist the downtrend.

These include Mantra (OM) and XDC Network (XDC), which have been slightly in the green over the last 7 days.

Here’s how the global positioning has changed for the top 10 RWA coins by market cap over the last 30 days:

• Avalanche (AVA): ➖rank 12 to rank 12 (no change)
• Chainlink (LINK): ▲ from rank 15 to rank 14
• VeChain (VET): ▼ from rank 41 to rank 44
• Maker (MKR): ▼ from rank 34 to rank 49
• Ondo (ONDO): ▼ from rank 64 to rank 70
• Mantra (OM): ▼ from rank 68 to rank 73
• Quant (QNT): ➖rank 76 to rank 76 (no change)
• Synthetix (SNX): ▼ from rank 112 to rank 114
• IOTA (IOTA): ▼ from rank 116 to rank 119
• XDC Network (XDC): ▼ from rank 118 to rank 125

As we can see, the vast majority of RWA tokens have slipped down the rankings in the last month, further confirming weak relative performers to other sectors.

What Comes Next

The RWA sector is expected to face a mix of challenges and opportunities in the coming months.

U.S. Treasury bill–backed stablecoins (otherwise known as tokenized secured notes) are gaining popularity, offering investors a stable, yield-generating option amidst volatile market conditions.

Image: Ondo’s USDY token

These stablecoins provide a direct bridge between traditional finance and the crypto world, potentially attracting more institutional interest. But are yet to meaningfully erode the market share of traditional stablecoins like Tether (USDT) and USD Coin (USDC), and currently lack meaningful DeFi integrations.

The tokenization of new asset types is also on the horizon. Beyond real estate, life insurance, and commodities like tequila, we can expect to see an expansion into more niche assets, including fine art, intellectual property and carbon credits.

These new tokenized assets will further diversify the RWA sector and appeal to a broader range of investors — while helping to further highlight the advantages of tokenized assets to institutions and regulators.

Macroeconomic factors are expected to take a positive turn in the coming months, with improving labor market conditions and several rate cuts expected throughout the year, risk-on assets like RWA tokens and cryptocurrencies, in general, will likely see more interest.

This may be further bolstered by the development of a robust regulatory framework for real-world asset tokenization, providing clear guidelines for participation and alleviating the uncertainty that may have reduced the adoption of RWA technologies.