Bringing Real World Assets to DeFi, Christian Santagata

bore you and be quite quick this is a brief exactly brief overview of what I'm going to go through so briefly touching on actually what rwa oranization is what defi is how they work together so what is the opportunity there and finally a very brief introduction about real but before getting into into that I want to understand a bit from you how much you are familiar with this topic so by raise of hand how much like do you know about rwa tokenization and today doesn't count so did you know about tokenization yesterday good how many of you would be able to explain it good not no bad not bad and what about defi have you ever heard about defi solid solid okay okay so we can move on we can I I'll not be that uh complex so the is for everyone don't worry so first real world asset or rwa what does it mean what oranization does mean it as simple as that it's basically taking physical assets or not like a house like watches like a bottle of wine or uh a of gold and bring it to the blockchain so basically they become tokens that are easily manageable tradable and I'll get to the implication of what that means in a bit like this is is an example I wanted to give you an example unfortunately is not that readable but uh like we have a protocol on deployed on real which is called tangible that is a Marketplace for real world assets so basically you can trade assets like real estate it's mainly for Real Estate like this is an example how the tokenization flow happen on the top there is like the legal side of it it's not the context of this of this talk but to give an example what actually tangible does is buying physical real estate and these houses are are actually rented out to people so there are tenants that live in the in this houses and you can go to the tangible application and buy a part or the Full House and basically if you hold the token in your wallet you get the right to receive the income that come from the tenants so like this that's I think a cool example how that actually happen in in practice moving on uh uh I wanted to give you a brief introduction what actually defy means compared to Trudi Trudi stand for traditional finance and it's basically the system that we use every day so like Banks cards and the financial system as we know we today while defi is basically the effort of creating the same financial application with some innovation in a the centralized way and that happen on the blockchain you can read through the brief description or I think the meme makes it a better picture of it anyway like some unique benefits of defi like that my my opinion are important for RW are like features that in this case like forw are very important like Global access like defi you can access defi application 247 every day and from anywhere in the world you don't need to be a specific country you can access it really from from any country I think that's very important like we are us it even if you know like in Italy or in the US We complain about financial system it's not that bad but think about underdeveloped countries in sou like in in South America or in Africa or in Asia like the those countries might not even have a financial system and defi is actually a big game changer also for those economies the second and third go together because the thing that as as we are building on the blockchain in a decentralized way we cut off middleman and how we cut off them by programmable smart contracts so defi application run on top of smart contracts smart contracts is basically the program so like when you go to a website like Amazon there is you know an a a system behind it if you go to a defi application there is another system behind it and that that goes through smart contract the cool thing is that these um these smart contracts basically set the rules of what will happen uh in the application and that's very clear like there a set of rules defined preset so you don't have to trust like a middleman or a bank you know or any other party to do what you want to do because it's programmed and final thing there is some sensor sensorship resistance I say some because I mean before the ideal of def5 was to you know the governments and you know we do whatever you want but we we we are at a point where there are developed products developed companies so they still have you know to adhere to some regulation uh especially in the US but at the end of the day you have much more yeah freedom to do what you want to do with your money in defi rather than trfi this is a comparison uh like by some features you can take a picture if you want I'm not going to go in detail through all of this but yeah just a a quick overview like in defa you have more control over your assets like you have to manage your asset it comes also with a bit of risk but it's up to you you know if you prefer to have more freedom rather than you know having the banks managing money for you intermediates we already covered that for transparency yeah as everything happen on the blockchain you can see actually where your funds go you can check the code of smart contract so you can check if you're a developer you can understand what is happening and that's really cool compared you know you know to the try system where that you don't know what is actually happening so that's aluan yeah and any um anybody can ask it from anywhere speed and cost is an interesting one because I put sometime sometimes great sometimes bad for both of them because I I don't want to S you that defi is you know the best thing in the world we still have work to do because like I want to give you an example of let's say you want to send some US dollars from the United States to Japan through the traditional Finance system that's probably going to take days and the fees are pretty high compared to defi where you can send basically stable coins in seconds and the chip is B now on every blockchain in sense so that's a great win but let's go with another example which is for instance with payments let's say you go to a restaurant with trfy you know you pay with your card or you know with Apple pay with your phone that system that's amazing at the moment we are still not there with like blockchain infrastructure because you know you you like even if there are cards that you know top up to from your wallet but even if you pay with that the infrastructure is just not there to support the amount of transaction that like Visa or Mastercard do so and even if we GA at the moment you know there are some blockchain congestion some sometimes you know do the transaction but it get rejected I mean it's not amazing you if you're at a restaurant and say you know wait a moment the blockchain is not working so this is to say we have still some work to do and finally another important point about security SL trust because as I told you like the security in defi comes from Smart contracts in try comes from trusting a centralized entity which at the moment I mean you still have to choose because smart contracts are hackable there are hacks and money get stolen at this time I believe that we are making great great progress in that and we'll get at some point that all the apps are completely safe but at the moment like you have to be aware of that but in my opinion security also means trust in this context because you trust in trfy your bank to act you know in a good way on your behalf while in defi when we get to a point where smart contracts are really safe I mean do you prefer to trust you know a a a centralized entity to do something with your money or do you trust you know like machines to do what they say they're going to do it's that's your choice so finally I think this is the most important part so actually Why Real World assets and defi are a perfect match for each other the first one is that what defi does for rwa is that defi creates a new market for this for these assets like think about real estate you can only sell it you know in the local market with very few people that usually can access it or in the right place at the right time to buy it what about bringing these assets to the blockchain it creates an entirely new world of opportunity on on one side because yeah we have you know it's permissionless anybody can access from anywhere in the world but also because of fractionalization so let's say you want to have some exposure to real estate so you want to yeah you are managing your Investment Portfolio you want to have some real estate exposure you don't have to buy a full house but you can buy you know a fraction of the token so like 10% 20% so that like in the case of tangible you will get you know the um the related share of the of the rental income and again it creates new opportunity new liquidity and at the end what Market are about is liquidity so basically this asset that are very illiquid they become very liquid on the blockchain the second point is that I mean for what I've told you before it's very clear that defi is just a much better trading infrastructure for RW and as I told you because I mean the thing that there are no middleman it basically bring cost down and because you're on the blockchain the settlement so the speed of the asset come become very high so this you know a house or like a you know trading a watch is is a very slow thing to do it's actually become fast in def5 and the final point I think it's an interesting one that is I think a lot of time overlooked because you know we always try to sell what defi does for the rest of the world but we also should look things the other way around so what actually rwa do for defi like I can tell you I've been working in this industry for like more than three years now and we have been mostly known for you know speculation memes and I mean I get if you you if you try to explain to some family members what Bitcoin is they'll say you know it's scam or whatever at the end of the day I think that bringing Earth W so assets that creates value in the real world to defy brings money yeah brings Capital but more most importantly it brings legitimacy it brings the fact that we can say yeah we can show to everyone that this system works is better so we can actually go to mass adoption this is an example some charts of what looks now so RWS on defi you cannot read it but the first one basically um they both show the total value of real world Assets in in defi the first one excludes stable coin second one includes stable coin in the first one we are about in 15 billions range the second one is 200 billion range like I I I have the two chart because some people argue that stable coins are not RW in my opinion they are a lot RW because at the end they are backed by us treasuries and and cash and that's an asset that usually will not be on the blockchain and I think the second chart some people say you know it's not great because we only have stable coins I think we have not been here for a lot of years and stable coins are actually one of the few products that really work and you can tell from this chart so what's the opportunity there I mean on the left you can see that you know there are some research that say yeah we're going to get to 10 15 trillion of Market of tokenization by 2030 I would say take these numbers with a you know grain of salt what is more most important here in this case is the meme because like in my opinion like AWA Andi work so great together that RWS can be the troan horse into the traditional Finance system so you know if we get this right we can basically bring defi to mass adoption to the system where other otherwise we will not have Defi and I think that's an amazing opportunity that is much more important than yeah getting whatever number of uh trillions on on on defi but I mean what's missing to to to go there uh I will start here saying that you know there are two kind of audiences that are at the moment that could be interested in rwa C defy I'll start from the middle one so onchain Capital this here we talking about like funds asset manager treasuries Dows so Foundation that are blockchain native they started on the blockchain and they raised capital on the blockchain so they they did not come from offchain they are already on chain I think that these entities that manage you know billions they are actually the only one at the moment incentivized to have aw in their in their strategy the thing the reason is that like defa users which is the second category they they are us it to make life-changing money in in Defi and for them five or 10% yel yearly yell on onw it's just not enough it's not attractive to them and that that's actually a problem um and in my opinion what will happen there is that at the point there will be a convergence between trf LS coming into Defi and defiel actually lowering as more Capital more people and more um more security comes into into the space so you can yeah in The Other M you can see that I mean there's a concept of risk adjusted return that is I mean in try you have to not just you know give um provide returns you have to provide it in a very safe way in defi there is not such a concept so that's the average def users on the other side we have offchain Capital so you know institutional investors people yeah with a lot of money or average people that you know don't manage their money on on Defi and I mean what what do we need to bring these people on on on chain as boring as it is is just compliance regulation security standards because you will not get funds that manage you know hundreds of billion of money on on defi if they're not sure that you know there are regulation that cover in case or you know in case of fups and in my opinion that's not probably going to happen before two five years maybe a bit more and hopefully when we have regulation comes also with good rules so what do we do we we wait no in the meantime we keep building so that's why we created real which which basically brings the best of both word together because um as said is real is a layer two blockchain so built in the ethereum ecosystem and the goal is basically to bring offchain Ys offchain um real world assets to the chain and merge it with something that defa users like a lot you know all these application where you can lend a token and borrow some other or you can you know there are a lot of yel games where you can compose with basically your asset and of course leverage because defa users love to leverage and I mean at the end I think it's it's is an interesting application because aw LS at the moment are boring for defa users they become interesting on real because you know they are actually plugged in into an interesting source of ecosystem so finally then what we are trying to build is a sustainable ecosystem because real world outset can mean real yel is a bit more technical we are going um step by step so at the end like um the the governance token of the real ecosystem which is rwa is the first L2 token that actually capture the value of the chain and give it to its older so basically 100% of the chain profit which is in a blockchain transaction fee they are completely returned to users and all the protocol these are like these are some protocol deployed on the Chain they all share a revenue um a part of their revenue with rwa holders and all these Fe are all these fees are paid in ethereum which is I mean a good currency to pay people within blockchain instead you know some newly launched token or meme coins that you know go to zero and a bit so at the end what we are trying to build is a sustainable ecosystem we trying to get away from you know The Narrative of building stuff that is made to to you know make people reach quick we're trying to build for the long term and I'm sure we will get there thank you if you want to get in touch that's my code