RWA Lending
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RWA platforms allow users to represent real-world assets, such as stocks, government bonds, real estate, and commodities, as crypto tokens and trade them on the blockchain. $USDT and $USDC can be considered RWAs, representing the tokenized and on-chain versions of US dollars.
According to the Boston Consulting Group, the RWA market will grow from $1.5 trillion in 2024 to $16 trillion by 2030.
To help users leverage the growing RWA narrative, ZeroLend currently offers RWA stablecoins lending/borrowing. Learn more:
RWA market is projected to grow from $1.5T (2024) to $16T (2030)
Solves DeFi over-collateralization challenges
Enables tokenization of traditional assets (real estate, bonds, stocks)
Provides accessible financing options for businesses and institutions
Growth catalyst for developing countries: RWA-based loans are crucial in empowering businesses in developing economies like Kenya, Nigeria, and Uganda to underscore the potential for financial inclusion.
On-chain process and better repayment terms: RWA lending also eliminates the bureaucratic processes of traditional banks, offering the company a favorable repayment schedule.
Less collateral required for loans: In RWA lending, you can offer collateral that may be objectively valued at less than the borrowed amount. For example, a company seeking a $7 million loan might lack sufficient collateral for such a sizable loan. Through RWA lending, they can secure the necessary funds with collateral valued at $4 million.
DeFi lending heavily relies on over-collateralization. Borrowers must provide more crypto collateral than the loan's value. Overcollaterization limits mass adoption, as individuals or entities seeking loans might not have significant crypto reserves to provide collateral.
RWA lending solves this challenge. Borrowers seeking loans might not have massive crypto reserves. For example, an institution seeking a $1 million loan might not have over $1 million in crypto reserves. However, they might provide other assets, such as real estate, bonds, or gold, as collateral to secure the loan. RWA lending helps such borrowers tokenize their assets and secure loans.
Now that the concept and potential of real-world assets (RWAs) are established, it is useful to examine how ZeroLend implements these assets through its RWA Stablecoins Market.
This market enables users to lend and borrow stablecoins backed by various real-world reserves, offering a more diversified collateral and lending environment within the ZeroLend ecosystem.
