IX Swap Meetup Recap: RWA Tokenization May Transform Finance
Web3 industry leaders highlighted that tokenization is enabling faster transactions and greater liquidity across financial markets, fundamentally altering how value moves within economies.
These were highlighted at the Tokenization Manila | 2024 event held on May 29, 2024, at the PDAX office.
Panelists include:
- Nichel Gaba, PDAX CEO
- Tracy Li, Chinabank AVP – Emerging Technologies Lead
- Chris Verceles, XC Labs CEO
- Julian Kwan, InvestaX and IX Swap CEO
- Aaron Ong, IX Swap Co-Founder
Key points discussed:
- By leveraging blockchain technology, tokenization facilitates near-instant settlement of transactions, eliminating traditional delays and reducing costs associated with intermediaries.
- The KOLs noted that this innovation promotes a more liquid and accessible financial market, democratizing investment opportunities and enabling broader participation from the public.
Key quote:
“The way tokenization is transforming our financial services is that, first and foremost, it allows money to move faster than ever before. With that it can potentially create a market that is more liquid and more accessible by the general public.”
Tracy Li, AVP – Emerging Technologies Lead, Chinabank
Use cases of Tokenization:
Accelerated Transaction Speeds:
- Enables money to move faster than traditional banking methods
- Near-instant settlement transactions
Enhanced Market Liquidity and Accessibility:
- Creates a more liquid market
- Allows for easier exchange and transfer of tokenized assets
Composability:
- Tokens can represent various assets such as real estate or securities
- Allows these tokens to be combined or stacked
- Provides flexibility and allows creation of new financial products or services
Unlocking Trapped Value:
- May unlock value from assets that are traditionally illiquid or difficult to exchange
- Enables easier trading of assets, potentially releasing capital for reinvestment and economic growth
Democratization of Investment Opportunities:
- Makes investment opportunities more accessible to a broader range of investors
- Enables fractional ownership and lower entry barriers
- Allows more individuals to participate in investment markets globally
However: The panel emphasized that these opportunities also come with risks.
Scams and Security:
- Retail investors are prone to scams in tokenized assets
- Public chain platforms are vulnerable to hacks
Economic and Market Risks:
- DeFi participation introduces economic risks like temporary loss in liquidity pools
Information and Regulatory Challenges:
- DeFi lacks regulatory oversight and investor protections
- Access to comprehensive information like audited financials is limited
Important note:
- Choosing licensed platforms with robust security measures and compliant practices is vital.
- Conducting thorough due diligence on platform operations and regulatory compliance is necessary to mitigate risks.
What to watch: Future developments may expand the application of tokenization beyond financial assets, potentially revolutionizing sectors like real estate, art, and intellectual property.
Go deeper: Real World Assets (RWA) tokenization is an emerging blockchain use case focused on digitizing physical assets like real estate and commodities.
- This process enables transparency in asset valuation and fractional ownership, while also allowing tokenized assets to serve as collateral in decentralized finance (DeFi) protocols.
- RWA projects may offer potential airdrops as incentives for engagement with their platforms.
This article is published on BitPinas: IX Swap Meetup Recap: RWA Tokenization May Transform Finance
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