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Real-world Assets: The Next Frontier for DeFi Growth
DeFi (Decentralized finance) industry has been at the forefront of financial innovation in the past few years. However, many people are still indecisive about taking their first step or investing in DeFi due to the uncertainty associated with cryptocurrency or DeFi protocol.
In this article, we’ll clear the fog around DeFi and the uncertainty associated with it. So, without further ado, let’s get started!
A Major Shift In DeFi
From lending and borrowing platforms to stablecoins and tokenized BTC, the DeFi ecosystem has built an expansive network of integrated protocols and financial instruments. It has opened a new democratized financial domain that enables anyone to lend or borrow loans, earn interest, rewards, and much more without any centralized institutes such as banks or intermediaries. Nevertheless, DeFi has been witnessing a little uncertainty in recent times due to the current market situation.
Well, it isn’t unknown that, the crypto tokens within the DeFi ecosystem facilitated transactions, provided liquidity, and much more. In short, DeFi has seen immense growth initially. However, with time, the DeFi space has evolved and matured, and new opportunities have emerged. One of the most promising trends in the DeFi space today is the integration of real-world assets into the DeFi ecosystem. This represents a significant shift in the way DeFi operates and opens up a whole new world of possibilities.
- Real-world Assets in DeFi provide massive returns uncorrelated to the greater cryptocurrency market.
- Asset owners can use real-world assets as collateral to access funding through the DeFi marketplace.
- Retail investors can independently explore a rapidly-expanding financial sector by investing in asset classes from established commodities to niche products.
- DeFi investors will benefit from both incomes generated by the collateral and interest payments made by borrowers.
Here presenting how real-world assets are used in DeFi:-
- Stablecoins: Stablecoins are cryptocurrencies pegged with real-world assets like gold, precious metals, US dollars, and other fiat currencies that provide the stability within the DeFi realm. For example, in DeFi, users can deposit any crypto asset into a DeFi protocol which means the passive income users generate from DeFi will highly fluctuate, making everyone unsure about investing in DeFi. Nevertheless, stablecoins backed by real-world assets not only ignite trust factors within the community but also control extreme fluctuations in prices.
- Synthetic Assets: Synthetic Assets are basically a replication/fabrication of real-world assets. A duplicate copy of real-world assets that are built on derivatives, which are combined with Synthetic Assets. Derivates are smart contracts and they get their value from underlying assets that are commodities (gold), currencies, stocks, and bonds. With these Synthetic Assets, investors can invest in new and emerging commodity classes and earn rewards or yield by staking or holding on to an asset for an extended period of time.
- Lending: Another amazing use-case of real-world assets in DeFi involves its lending functionality. In DeFi, anyone can easily obtain a loan with their real-world assets as collateral from someone else in an investor pool without any intermediary. On the other hand, lenders who provide finances/loans also receive a stable and secure return. Besides that, anyone can lend a loan to numerous different projects to access the global high-return market, earn coins or staking rewards, and more.
This shows that the integration of real-world assets into DeFi adds a renewed level of stability, equality, and accessibility that will allow mass adoption. It is quite certain that, real-world assets will substantially impact the entire industry and will be an essential part of the future of DeFi.
Aconomy is a DeFi platform that aims to tokenize real-world assets with its cutting-edge technology. It benefits both investors and asset owners by empowering them to trade assets on a decentralized exchange, which provides increased accessibility and liquidity.
We at Aconomy are always on the lookout to connect with like-minded individuals, strategic collaborators, and partners who wish to be part of our journey. To get in touch, please feel free to reach out to us on
Aconomy | $PNDR | Twitter | LinkedIn | Telegram or shoot us a mail: support@aconomy.io
FAQ’s
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What is DeFi (Decentralized finance)?
DeFi stands for Decentralized Finance and refers to an ecosystem of financial instruments and protocols that operate without centralized institutions like banks. It allows users to lend, borrow, earn interest, and participate in various financial activities through decentralized platforms.
How do real-world assets play a role in the DeFi ecosystem?
Real-world assets, such as gold, fiat currencies, stocks, and bonds, can be integrated into the DeFi space in various ways, including stablecoins, synthetic assets, and lending. By pegging or replicating real-world assets, DeFi can provide more stability, reduced volatility, and expanded opportunities for investors.
What are stablecoins and how do they bring stability to DeFi?
Stablecoins are cryptocurrencies pegged to real-world assets like gold or fiat currencies. Their value remains stable in comparison to other volatile crypto assets. Within the DeFi ecosystem, stablecoins backed by real-world assets can help reduce extreme price fluctuations and enhance trust among participants.
How do synthetic assets in DeFi work?
Synthetic assets in DeFi are replicas or fabrications of real-world assets built on derivatives. These derivatives are essentially smart contracts that derive their value from underlying commodities, currencies, stocks, and bonds. This allows investors to gain exposure to various asset classes without actually owning the physical asset.
How does lending with real-world assets in DeFi differ from traditional lending?
In DeFi, users can secure loans using their real-world assets as collateral without relying on intermediaries like banks. This peer-to-peer lending allows for greater accessibility, equality, and potentially higher returns for lenders, while borrowers can tap into global high-return markets.
About Aconomy
Aconomy is a decentralized asset tokenization platform that empowers individuals to seamlessly tokenize and trade their real-world assets on-chain. With a vision to foster a parallel on-chain asset economy, Aconomy enables its users to tokenize real-world assets ranging from vintage watches and luxury art to rare books. As an asset tokenization company, Aconomy is revolutionizing interactions with tangible assets by democratizing on-chain asset ownership through the dematerialization of RWAs. With the focus on enhancing liquidity in real-world asset classes, Aconomy enables the asset validators to stake their validator collateral (if required) in USDT in asset-NFT to not only validate & vouch for the asset's authenticity but also transform them into Pi-NFT (with 1:1 backing & induced liquidity). This transformation opens up a pathway for numerous asset trading opportunities on-chain like selling, auctioning, lending, swapping, and redeeming - all in a secure and transparent manner, which are not often available in the traditional economy.