Inker Dao
I think from the institutional side and retail side, education and slow adoption maybe at the beginning is critical, but it’s totally inevitable. And this space, you compare to the other scenes and the hotspots, they come and go, when they come, they come in the sprint of rush, right? And they sort of wilt away, they faded away. If we were caught a while ago, some of the mean things come in a week and they’re just gone, right? And play to earn probably lasted a year and gone. And why they’re like, they’re fast food. You get tired of them quickly. And the RWA, based on its very nature, the potential is huge. I mean, as all the guests have spoken here is that blockchain itself does offer a very, very unique technical advantage to carry this type of assets. So we recognize this and it’s just a matter of getting it done. And the sectors of RWA are just so many and in each sector, you all want to go to the originators to sort of teach them how to bring their valuable assets on chain. And behind this effort, I think institutional leadership is critical. There are two advantages. And one is that they have done this, the real world assets, they have done it in real world, right, gazillions of times. So that’s the first advantage. They know how to process these things. And the second part is that they are very, very regulatory sensitive or regulatory aware. So they know the procedural integrity and for them to lead this movement, the chance of stepping in the landmine is less than as if a whole bunch of people who have never done this before and for them to lead the thing. So leadership from the institutional side is critical. Then I do believe there’s another issue is that the net inflow, funds inflow to blockchain from the traditional Web2 world is very important as well. If you look at what’s going on right now with the crypto winter, right now we’re all in. The money that’s been circling within this ecosystem, they’re just chasing hotspots from one to another. For instance, we all know why Treasury T-bill, why T-bill out of it is here because there is a rates arbitrage, right? So you go to RV, you go to this collateralized, algo driven type of DeFi, you want to earn an interest. There is a clear arbitrage. So that arbitrage, that opportunity is really not presented to anyone outside of the crypto world. It’s just we the crypto people, if I have 10,000 USDT, I want to earn something. Obviously 5% is a lot better than 2.8. So that is still within the ecosystem because money is being sloshed around between these as a classic support. Now it appears that it has its advantage as a yield spread and also risk-free. To make this a real continuous sort of sustainable growth, we need Web2 money to be on blockchain. So once again, because there are assets without the blockchain, that kind of money cannot touch. And that is the fundamental, right? So blockchain itself stands out as the distribution network, right? That can bring money and that can bring assets together with the least hurdle. I think that needs to be an industry-wide effort. It will not be a surge, it will not be a sprint to say this would just somehow get hot and die down. We all hope it’s not the case and we have reason to believe that is not the case. So this is a long-legged trend. It has legs because institutions are behind it and bit by bit, the retail investors will be in this space. So later on, if I can have the opportunity, I want to share what we have seen from some of the biggest of Web2 players that are not even financial institutions, right? That kind of a trend is very supportive of this RWA, if you want to call it a theme. That’s a very great idea to bring more Web2 players and flow come to the Web3 world so we can have more liquidity and make the scope even bigger.
Get MD Mustak’s stories in your inbox
Join Medium for free to get updates from this writer.
So many top RWA projects concentrate on originating specific assets classes. So it’s leaving a plethora of potential assets untapped. E-finance is not positioned as such a specific assets origination projects, but we are making a customized framework for any originator of a wide range of RWAs. It integrates some of the most critical and common elements in the tokenization process, thus embedding integrity and credibility as a part of tokens to be minted. So how do you guys perceive such a distinctive approach? What potential outcomes do you think this infrastructure might bring to the RWA landscape? Let’s start with Matt. Yeah, as we sort of touched upon before regarding the question with DeFi protocols being the facilities for distribution of RWAs as well as trading on secondaries, I think we’re gonna see kind of a custom tailored approach in which the teams that are willing to change up their current offering to be fully regulatory compliant for these RWAs and STOs and OCAs, sorry, there’s so many acronyms these days, will probably get more adoption, at least from institutions, because at the end of the day, institutions, probably the biggest thing in their minds is just being compliant within their own regulatory framework and it’s been an interesting exercise as we worked with these institutions the past two years, just seeing how every compliance team within these large banks, tradFi brokerages, asset originators, et cetera, they all differ. There isn’t a uniform set of compliance practices and so that’s, in my mind, something that, hey, if there is gonna be a big winner within this space specifically, they have to be able to adhere to different custom requests from large clients and that kind of fits in my mind as to what Inc. Finance and you guys are doing over there. Thanks, Matt. Abhishek? Yeah, I broadly agree with Matt. I think, but I also like the strategy being followed considering, I think, like, I look at it this way. Every ecosystem for its development needs enablers and I think Inc. Finance can act as an enabler that sort of moves the RWA ecosystem forward. And any developing and growing ecosystems, enablers are a piece that not only help the ecosystem grow but also accrue a big chunk of the value as the growth takes place. So just by that logic, I do appreciate the strategy being followed. Thank you, Abhishek. Tony? Thank you, Matt and Abhishek. You two gentlemen are, you know, thank you for your kind words. And as a founder, I personally, and on behalf of our team, I want to extend our gratitude toward both Avalanche AVAX Lab and Avalanche AVAX Finance.
