What is Tokenization of Real world Assets

On June 20, 2023, Dr. Ravi Chamria (CoFounder & CEO, Zeeve) and Alik, Blockchain Professional, conducted an insightful webinar on “Tokenization of Real-world Assets.”
Dr.Ravi started by giving an overview of what will be in the webinar. Some of them include:
Tokenization of real-world assets, a trending concept.

Digital technologies like Real Estate Investment Trusts and exchange-traded funds. The potential disruption that tokenization can bring to the asset management industry.

1. Tokenization of
Real World Assets
(RWAs)
Dr. Ravi Chamria

2. What To Discuss?
Things we have in the real world, what if we
could move them to the BLOCK?

What if we Tokenize everything?

3. The Potential Market
For Today's Discussion
Tokenized RW Assets Could Be
A $16T Market by 2030
•This represents a growth of more than 50,000%
compared to $310 billion in 2022
•Furthermore, tokenized assets are expected to
comprise 10% of global GDP by the decade’s end.
BCG Report
So, it's worth discussing…

4. Tokenization of global liquid assets estimated to
be a $16 Trillion business opportunity by 2030

5. Is This Something Very New?
No.
Asset fractionalization has already existed for several years, before even the advent of blockchain.

6. Problems?
Low Liquidity Inaccessibility Lack of Monetization
The Solution = Assets Tokenization

7. But Before We Jump Into Tokenization,
Let's brush up
our knowledge
on Tokens..

8. The Token Economy
Everything mentioned here are transferable.
Means, you as an owner enjoys all the benefits.
But you can pass on that to others. Hence,
Tradable in nature.

With the emergence of Decentralized Societies,
a new type of NFTs emerged that are
non-transferable and attached to one's souls:
Hence Soul Bound Tokens.

This public-verifiable digital token can serve as
a representative of the social status of an
individual on web3, a CV kind of.

The non-transferable NFTs can offer the
foundation for developing web3 networks
which do not rely completely on
money-centric frameworks.
Use for services, access
and subscriptions
NFTs for identity and ownership
(decentralized identity)
Direct expression of
crypto-liquidity. Used for
payments
Used to represent (on-chain)
off-chain assets
UTILITY TOKEN SECURITY TOKEN
PAYMENT TOKEN SECURITY TOKEN
FUNGIBLE
NON-FUNGIBLE
Asset tokenization
Asset token
Token =
A Unit of Value in the Blockchain

9. What Are Tokenized Assets?
What can't be tokenized?
Asset tokenization is the process by which an issuer creates digital tokens on a distributed ledger
or blockchain, which represent either digital or physical assets.
Traditional Assets
Digital Assets
Fiat Currencies
(or other means of
payment/trade)
Payment tokens

- Cryptocurrencies
-Stablecoins
-CBDC
Use values
(i.e. vouchers, tickets)

Utility tokens

- Access to services
- Access to use a platform
Assets/Securities
(i.e. equity shares, debts/bonds)
Assets/security tokens

- Equity tokens (i.e. stocks)
- Debt tokens (i.e. bonds)
Tokenization Tokenization Tokenization
Evolution of Digital Assets
What can be tokenized, will be tokenized in a few years from now.

10. Types of Asset Tokens
Exist and can be traded on-chain and off-chain Exist and can be traded on-chain.
•Financial assets: any conventional security
transferred on DLT

•Non-financial assets (i,.e. real estate, art etc.)

•Commodities (i.e. gold, silver)

•In theory, everything
•Financial assets issued on DLT

•Debt securities (easier as bearer instrument)

•Equity securities

•STOs marketed as “regulatory compliant” successor
of ICOs, depending on the specific issuance.
Defined by their existence on the ledger, independent
by the external market
Token Representing a Pre-existing Real Asset Tokens Native to the Blockchain
Backed by real assets existing outside
the ledger

11. What Are Real World Assets?
Real World Assets (“RWAs”) are assets that exist off-chain but are tokenized and brought on-chain to be
used within DeFi.
Any real-world asset that has a well-defined monetary value can be represented by RWAs
Examples of real-world assets
Tangible Assets Intangible Assets
Real Estate
Art and Luxury Items
Commodities
Sports teams & Collectibles
Brand Equity
Government/Corporate Bonds
Rights/Quotas
Intellectual Properties

12. Benefits of Real-World Assets
RWA tokenization opens up
investment opportunities to
a broader range of
investors, including those
with limited capital.

By reducing the minimum
investment size and
enabling fractional
ownership, individuals can
now participate in markets
that were historically
reserved for institutional
investors or HNIs
Blockchain technology
ensures transparent
ownership records, reduces
fraud, and enhances
security.

Every transaction and
ownership transfer is
recorded on an immutable
ledger, eliminating the need
for intermediaries and
increasing trust in the
system.
Smart contracts, integral to
RWA tokenization, automate
asset management
processes, streamlining
transactions and reducing
administrative overhead.

These self-executing
contracts enable automatic
distribution of dividends,
facilitate the payment of
rental income, and simplify
the transfer of ownership.

Tokenizing assets unlocks
liquidity by enabling
fractional ownership and
allowing investors to
buy/sell smaller portions of
assets.

This fractionalization
unlocks liquidity and
broadens the investment
potential for a wider range
of individuals, eliminating
the barriers associated with
high capital requirements.
Increased liquidity Enabled Accessibility Transparency & Security Automation & Efficiency

13. How Do Real World Assets Work?
The process of RWA tokens becoming legitimate bearer assets can be conceptualized as three phases:
(1) Off-Chain Formalization (2) Information Bridging (3) RWA Protocol Demand and Supply.
Information
Bridging
Off-Chain
Formalization
RWA Protocol Demand
and Supply
Tokenization
Representation of
Economic Value
Origination of RWAs
Regulatory
Technology/Securitization
Ownership & Legitimacy
of Title
Facilitate Demand
for RWAs
Oracles Legal Backing
Initial Coordination with
Off-Chain Formalization
Real World
Assets
RWA Token

14. RWAs Tokenization: Real-Estate
RealT Real Estate RWA
RealT, a platform that creates a DeFi market
around fractional ownership of US real estate
properties. Investors on RealT are able to obtain
exposure to real estate investing, without
owning the entire property.

Real estate owners on RealT, can sell fractional
shares of ownership in their properties to
diversify away from complete ownership.

15. RWAs Tokenization Moves by Traditional Institutions
EY launches EY OpsChain ESG, to provide a trusted platform for emissions and
carbon credit traceability through tokenization
Developed on the Ethereum blockchain, the new solution will provide a single,
verifiable view of CO2 emissions (CO2e) to address the needs of enterprises that
struggle to accurately measure and track their carbon footprint.

With net-zero targets under more scrutiny than ever before, this solution presents
enterprises with the opportunity to tell their organization’s ESG story on a digitally
trusted platform.

16. TWAs Tokenization Moves by TradeFi Institutions:
Goldman Sachs launched €100
million digital bonds
Siemens issues first
digital bonds
Goldman Sachs has launched its digital asset tokenization
platform, GS DAP, with the issuance of a €100 million ($104m)
digital bond for the European Investment Bank (EIB) on the
private GS blockchain.
The 2-year syndicated bond issuance was settled instantly
in a delivery versus payment transaction that used
experimental central bank digital currency (CBDC) tokens
issued by the Banque de France. The bond and the CBDC
tokens live on different blockchains.
Goldman sachs believes, most institutions are comfortable
with permissioned blockchains as of today, as regulations
provide more clarity, they will move towards public
blockchains because of greater liquidity and a larger
investor base.
First digital bond on a public blockchain in accordance with
Germany’s Electronic Securities Act (eWpG)

The bond has a volume of €60 million and maturity of one
year and sold directly to investors (Classic payment via
bank account)

For instance, it makes paper-based global certificates and
central clearing unnecessary. What’s more, the bond can be
sold directly to investors without needing a bank to function
as an intermediary.


Digital Bond:

17. RWAs Tokenization Moves by TradeFi Institutions:
Physical Equity:
Individual investors can now access Hamilton Lane’s
flagship direct equity fund, Equity Opportunities
Fund V through a new Securitize feeder fund
tokenized on Polygon.

The new tokenized fund will significantly increase
access to this historically high-performing asset
class, with minimum investments reduced from an
average of $5 million traditionally to $20,000 →
democratization of the private markets
Hamilton Lane's $2.1 Billion Flagship
Direct Equity Fund

18. RWAs Tokenization Moves by TradeFi Institutions:
Alternative
Investment
SWIFT is experimenting
Tokenized Value Transfer
KKR is a leading global investment firm that offers
alternative asset management as well as capital
markets and insurance solutions.

KKR's Health Care Strategic Growth Fund II ("HCSG II")
tokenized on the Avalanche public blockchain.

This is the first time KKR's alternative investment
strategies has been offered in a digital format in U.S.

KKR's HCSG II Fund, to which the Fund provides
exposure, invests in innovative health care
companies in North America and Europe with proven
products and services that are seeking a partner to
commercialize and scale.
SWIFT will collaborate with more than a dozen major
financial institutions and FMIs to test how firms can
leverage their existing Swift infrastructure to
efficiently instruct the transfer of tokenized value
over a range of public and private blockchain
networks.

Australia and New Zealand Banking Group Limited
(ANZ), BNP Paribas, BNY Mellon, Citi, Clearstream,
Euroclear, Lloyd's Banking Group, SIX Digital
Exchange (SDX) and The Depository Trust & Clearing
Corporation (DTCC) taking part in the initiative.

19. RWAs Tokenization Moves by Crypto-Native Platforms
MakerDAO Adopts Real-World Assets The Aave Market for Real World Assets
MakerDAO investing $500 million worth of stablecoin
DAI into US Treasurys and corporate bonds. Voters
agreed to 80% of the funds would be allocated to US
short-term Treasurys and 20% into
investment-grade corporate bonds.

This proposal was an attempt for the DAO to
generate yield from its DAI holdings with
professional bond managers and to diversify
counterparty risks, ultimately strengthening the
DAO's balance sheets.

Embracing real-world assets can help maintain
DAI's peg to the US dollar.
RWA Market on Aave allows businesses to finance
their tokenized Real Estate Bridge Loans, Trade
Receivables, Cargo & Freight Forwarding Invoices,
Branded Inventory Financing, and Revenue Based
Financing using crypto.

20. RWAs Tokenization Moves by Crypto-Native Platforms:
Agriculture Harvest Tokenization: LandX
LandX allows farmers to obtain capital in exchange for a percentage of the future production from their
fields.
In other words, they can tokenize their future harvests and sell these tokens as they see fit.

Insurance Tokenization: Opium Finance
Opium Insurance offers tradable, tokenized insurance position against smart-contract hacking or against
stablecoin default.
Tailored for DeFi traders, Opium insurance covers smart contract exploits, credit default events, stablecoin
custodian insolvency, impermanent loss, price volatility, SAFT risks & off-chain risks.

21. Industry-Wise Demand RWAs:
Fiat-based stablecoins are the original and by far the most notable underlying instruments for RWAs.

Beyond stablecoins, the asset class which serves as the most popular underlying for RWA is real-estate.
This is followed by climate-related underlyings (e.g. carbon credits) and public bond/stock underlyings.
Next, emerging market credit (mainly corporate debt) underlyings and so on.

22. Popular RWA Tokenization Platforms Across Industries

23. Various Token Standards for RWA Tokenization
The information collected in the Off-Chain Formalization phase is translated into code and represented by
the metadata of a digital token.

This metadata can be accessed via the blockchain, providing full transparency into an asset’s economic
value and ownership. As previously mentioned, this process is called “tokenization.”

As shown below, there are numerous token standards to create a DeFi standard for asset tokenization.
Proposal
ERC-20
ERC-721
ERC-3643
ERC-2222
ERC-4626
Asset Coverage
Broad
Broad
Securities
Dividend-Bearing
Yield-Bearing
Features
Most popular standard in tokenizing assets. Wide DeFi support.
Lacks legal specificity.
Commonly used to represent unique goods ex. Art.
Some adoption in DeFi.
Specific to assets that are deemed as securities.
Has encoded compliance.
Standard for assets that are claims on future cash flows.
No legal compliance.
Standard for assets that use DeFi's yield bearing vaults.
No legal compliance.

24. How A Tokenized Asset Marketplace Looks Like:
Network-agnostic tokenization platform
Tokenization Platform Distribution Network
The ERC3643 smart contract
Aggregate Date
Manage
Connect
EVM
Networks
Centralized trading platforms
Decentralized exchanges
DeFi Protocols
Front-end
Back-end
All the platforms
on the same
network of the
digital securities

25. Where Zeeve Fits Into The Picture
We provide the backend infrastructure, the automation needed to tokenize virtually anything…be it
on permissioned or permissionless protocol.
Access enterprise grade RPC Nodes for over 30+ public & permissioned protocols, popular
app-chains, blazing fast APIs, Distributed IPFS storage, all with an access to our team of experts
Tokenize the RWA you want, without worrying about the complexity of web3 infrastructure. Let us
handle that for you.
Visit Zeeve.io today.
We are the bridge that connects you to the blockchain of your choice…
Let's begin your journey to the world of Tokenization!

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