What are RWAs? Real-World Assets Explained Simply

Have you felt a little loss trying to Understand all the buzz around real World assets also called rwas I get it The crypto world has a language of its Own but don't worry I'm here to decode It for you so what are tokenized real World assets well as the name says these Are real world assets that exist in Traditional Finance think real estate Art Commodities transformed into digital Tokens this process is called Tokenization tokenization allows both Physical and intangible real world Assets to live on a blockchain in the Form of crypto tokens that can be easily Bought and sold and also traded so for Example say a real estate investment Firm owns a 20-story downtown office Building worth $20 million with Tokenization they could create 20,000 Digital tokens representing ownership of The building with each token valued at $1,000 just like you can own 0.5 Bitcoin You could own 50 tokens representing Part ownership of the office building Even though the asset itself isn't Changing Hands the token can be easily Traded 24/7 on exchanges now that you Understand what it is let's discuss how Assets are Tokenized so first the asset is Evaluated to determine its value and all The legal and compliance paperwork gets Straightened out boring but mandatory

Now comes the blockchain magic smart Contracts come in to handle the token Creation process choosing which Blockchain depends on the asset and Voila digital tokens are boring they Represent ownership rights over real World assets these tokens then start Trading on the blockchain so why bother With all of this well tokenization Enhances liquidity allowing 24/7 trading Like crypto tedious paperwork and fees Are hugely reduced too making investing More accessible of course it's not all Rainbows regulations security risks and Custody Solutions still pose challenges But the benefits make it an exciting Ride into the future of Finance now Let's talk about why real world assets Are so crucial in defi these assets Build a bridge between traditional Finance and crypto they provide Stability and Def as crypto tokens are Volatile diversification becomes key Reducing risks and attracting Traditional investors with yield Generating opportunities automation Through smart contracts makes it all run Smoothly additionally tokenization also Enables greater Financial access Barriers that excluded people from Markets come tumbling down all right What hurdles still lie Ahead well regulations remain complex And inconsistent across regions safe

Asset custody Solutions are still being Formulated too will also need active Marketplaces and liquidity for Sustainability and accurately valuing Digital assets brings its own challenges Despite the road bumps the future looks Bright investor confidence and Interoperability between networks will Continue improving and Innovations on The horizon could redefine Finance alt Together and that concludes our video Today so whether you're a total Crypton Newbie or a Season Pro I hope this video Helped you understand the hype around Rwas