Top Real World Assets (RWA) tokens by market capitalization

Maker (MKR): Maker is a DAO overseeing the Maker Protocol, which allows the minting of the stablecoin DAI through collateral asset lockup. Initially utilizing Ethereum as collateral, the protocol has expanded to accept various crypto assets. MakerDAO has explored tokenized real-world assets as collateral, potentially bringing assets like real estate and commodities into the DeFi space for DAI minting. Synthetix (SNX): Synthetix is a decentralized protocol for creating synthetic assets (Synths) that track real-world asset prices. Synths can represent currencies, commodities, stocks, and more, created by staking SNX as collateral. Users can thus gain exposure to real-world assets without holding the actual assets, enabling diverse DeFi investment and trading options.

Tokenizing RWAs can enhance market liquidity, allow fractional ownership, lower entry barriers for investors, and streamline transactions. It also creates new investment opportunities and markets previously inaccessible.

Tokenized Real World Assets can be traded on platforms supporting digital assets, such as cryptocurrency exchanges or DeFi platforms. These platforms facilitate buying, selling, or trading tokens representing RWAs with other users or through smart contracts.

The value of a tokenized RWA usually reflects the underlying asset's market value, determined through appraisal, market comparables, income potential, or a combination. Accurate and transparent asset valuation is essential for fair trading and investor trust.

Smart contracts are key in automating tokenization processes, executing transactions, enforcing rules, and verifying ownership or compliance with predefined conditions. This automation streamlines token issuance, trading, and management, reducing intermediaries and boosting efficiency.

To issue tokens for RWAs, an accurate asset valuation, often via independent appraisal, is needed. A digital token representing part or all of the asset is created on a blockchain. These tokens are then issued to investors, granting them ownership or a stake in the asset proportional to their token holdings. Compliance with relevant regulatory and legal requirements is essential throughout the process.