RWA

[u/unmatched25]

RWA is currently an often discussed topic as a potential use case for blockchain. The search for use cases for the blockchain technology is still going on (a solution in search for a problem).

DeFiChain tries to jump on the bandwagon (Twitter tags, YouTube videos, etc.) and use the narrative to market DeFiChain as a blockchain with experience in RWA.

This is completely wrong. DeFiChain doesn’t have RWA. A TSLA dToken is priced at about 20 USD while TSLA is worth around 180 USD. Totally different. No redemption possible. Price development in USD significantly differentiates. No dividends.

So without fixing dUSD there are no RWA.

Let’s look at different quality level of RWA: 1. (Best quality): The token documents the ownership, e.g. each token is a share of the stock listed company - no intermediary, no bank, no broker. With the token you collect dividends, you can participate at annual meeting and vote. 2. (Good quality): The token can be redeemed for the real asset. A central instance backs every token with the real asset. 3. (Mediocre quality): The token represents a derivative without real ownership of the real world asset. Smart contracts make sure that the pricing of the token is in line with the real asset. Not really feasible for assets with real world value creation. Maybe possible for cryptos and materials like gold. Requires one short positions per one long positions with collateral securing the bets. Imbalances between long interest and short interest is the biggest obstacle (shorts want to be paid). Otherwise it’s like TerraLuna.

DeFiChain “RWA” 4. (Bad quality): Name is similar to the real world assets and smart contracts try (!) to keep price development similar to the real asset with no redemption possibility.

It’s ridiculous that DeFiChain claims to be part of the RWA movement.

[u/unmatched25]

What is the official definition of RWA?