deRWA Tokens Shake Up Centrifuge

Centrifuge (CFG) just released something really cool for DeFi – a new way to bring real-world assets to the blockchain. And they have invented what they’re calling a deRWA token, essentially a supple wrapper for tokenized securities.

The idea here is simple: more money, more openness to risk, and less concern about who the issuer is, while being able to make their rally work in DeFi wallets would drive more volume to these assets for whatever it is they do (whether that’s lending, trading or yield mining).

And while this may sound like just another crypto acronym to wrap your head around, these deRWA tokens are unique in that they can play friendly with existing DeFi infrastructure from the get-go.

If you’re an issuer that has been bound by what are essentially prison bars on your real-world assets, this unlocks a world of distribution and trading possibilities. Additional eyeballs on your assets should imply better liquidity and more dependable yields.

Bhaji Illuminati, CEO of Centrifuge, explains that, if true, this could be a massive trigger in making real-world assets work in DeFi.

Think about taking something like real estate or invoice financing and plugging it straight into any money market protocol, without cumbersome bridges and without the need to develop custom solutions.

And they’re arguing that it offers more transparency than traditional off-chain arrangements. So you want to use these tokens for trading or borrow them as collateral? Now you don’t have to jump through hoops.

And these tokens are quite versatile - you can put them up as collateral for loans, trade them on decentralized exchanges or even park them in user-friendly savings products for interest payments.

It’s about establishing a bridge between traditional finance and DeFi. People have been chipping away at this puzzle for years, but usually run into a series of regulatory headaches or technical roadblocks.

Centrifuge believes it has a way to make it work without leading to frustration for users.

If this gets off the ground, we might witness enormous institutional players finally start dabbling in DeFi with real assets - property titles, bonds and more.

Also see: Reactive Network: Cross-Chain Swaps Without the Hassle

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