Real world assets in DeFi: Buzzwords or the real deal?

Industry leaders need to be “more discerning when it comes to talking about real-world assets,” Santos says

article-image

robuart/Shutterstock modified by Blockworks

share

Real world assets.

It’s a topic that was “discussed heavily” at the Blockworks Permissionless II conference, according to investor Santiago Santos. But he wonders if the phrase carries a genuine narrative or is just the latest addition to the industry’s ever-growing collection of meaningless buzzwords.

On the Empire podcast (Spotify/Apple), Santos reflects on his conference experience, observing a “renewed interest in DeFi,” with a particular focus on the concept of real world assets. Despite the attention, not everyone agrees that the category will endure, he says.

Blockworks co-founder Jason Yanowitz cites a conference panel that discussed the topic, with Alliance DAO founding partner Qiao Wang asserting that the concept of real world assets is a “fake narrative.”

“His point was,” Santos replies, “stablecoins are real world assets.”

“The way we characterize and describe real world assets is a catch-all phrase,” Santos says, arguing industry leaders need to be “a little bit more discerning” when discussing the broad topic.

Santos suggests that many different classifications and potential “buckets of real world assets” might gain more traction over time, while others will fail. 

“Certain real world assets lend themselves more to gaining traction on-chain than others,” he says, adding that many potential assets don’t deserve “to even have a crypto-native ‘wrapper.’”

Yanowitz suggests the technology’s selling point is its ability to “import yield” in various forms, including stablecoins. He points to Maker as an example of a company that is carrying out the process by valuing off-chain assets and then importing value to the blockchain. 

“In the coming year or years, we’re going to find and develop more ways to import yield on-chain.”

We always get the nomenclature wrong in crypto

One frustration with the phrase “real world assets,” Yanowitz says, was explained by Superstate CEO Robert Leshner at the conference. The phrase “real world” — as a means to differentiate the assets from others — implies that on-chain is, logically, not the real world, he explains.

“There are traditional assets and there are crypto assets,” Yanowitz says. “Or, there are off-chain assets and there are on-chain [assets].”

“We always get the nomenclature wrong in crypto,” Santos smiles. “We do certain things very well as an industry, but nomenclature is not one of them.”

Santos reflects on past industry failures in the realm of real-world assets, noting the topic tends to be “very polarizing, because it failed before.” He mentions the example of Harbor, a “super-hyped” real estate fund tokenization platform that failed to gain traction after receiving a broker dealer license in 2019. 

“It didn’t fulfill its promise,” he says. “It was a good idea. It was just like, it wasn’t the right time. It was too early. The infrastructure was not there,” he says. “That’s the state where crypto is today.”

“It’s just important to be mindful of things that have been tried in the past [and] revisit some of those,” he says, “because the infrastructure has come a long way.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

ao cover.jpg

Research

Arweave recently launched the testnet for AO computer, a new messaging protocol that will sit atop a PoS network and aims to become a scalable global compute platform through parallel processing and modularity.

article-image

Ore’s price more than tripled as the supply of new tokens paused

article-image

I spend an unhealthy amount of time thinking about crypto securities law — and I can’t see how ETH is now a securities offering under Howey

article-image

Regulators in South Korea, Japan and Singapore could follow Hong Kong’s lead as Asia responds to spot bitcoin ETF approval in the US

article-image

Martin Grant worked with the Fed for roughly 30 years before leaving his position in 2022

article-image

BitGo CEO Mike Belshe shared his thoughts on the halving and bitcoin ETFs in an interview with Blockworks

article-image

Crypto markets were largely the only ones open over a tense weekend, and they took a beating for it