Practical DeFi - Tokenizing Real-World Assets for Real-World Problems - TOKEN2049 Dubai 2024

good morning everybody well I'm feeling privileged to have a very good uh colleagues of the industry but more than that friends of mine here on the stage and the first one in Dubai I'm I have 38 feverg right now I know feel very well but this guy going to give me the best energy but let's talk about real world assets um but before that I would like that each of you introduce yourself and let's start with the ladies Anna who are you uh I'm here only for gender equality so anyway I'm head of BD at Co gra accelerator and upcoming VC uh I'm looking for new startups and we've been so skeptic for lwa for many years but for the past couple years climate changed industry changed and now we are very bullish and happy to support invest and promote real world asset thank you so much and now let's go with the host and the founder and SE of c c stay show we cannot get better than that so um thank you for the introduction Andreas so as he said uh I'm the founder and CE of zebu um at zebu we're all about tokenizing real world assets and uh most importantly bringing consumptive use uh to web 3 right so earlier the liquidity that was flowing around in web 2 uh at zbu we are actively uh converting that and uh over the past eight months we have done so for about $1.5 billion in transaction which would have otherwise happened through trafi uh in the past eight months it's happened through D5 so that's what we're all about at zebu amazing I'm talking about real world assets and construction especially now with everything that happened yesterday let's introduce Robin from propain I know you're building something with real world assets and uh real estate yeah yeah the real world Assets in real estate was not the best to be in here in Dubai over the past few days because we have uh LED ourselves into severe damages on the properties but uh co-founder of the prop chain ecosystem in the prop chain ecosystem we are focused on the tokenization of real estate assets but more importantly the infrastructure behind it of bringing real estate data on chain and that goes quite Broad and happy to shine a light on that during today's panel thank you so much Ro and of of course we have one of my um good friends from the industry bugar he's not only the Chief Operating Officer of Bigg but he has an amazing podcast what kind of competition in the podcast industry oh we help each other you've been guest at mine I have been guested at your I invite you but yeah am I losing on a competition or winning you better get me on the show yeah I am wer Chief Operating Officer of bitet one of the largest exchanges we handle more than10 billion worth transactions every day and serve 25 million customers across the globe and definitely I'm very excited about real world assets and how technology can take things to the next level especially from The Exchange point of view it's very important because real world assets represent a huge value and transactional value and I believe that there's a huge opportunities I want to discuss today and I'm very keen about deepin projects and I think we can also shed light on that thank you so much and I didn't introduce myself so my name is Andre men the cency of OG Media Group where we specialized to help um the top projects the top exchanges and ler ones together message right to the right people and grow the industry that's it so let's dive in um real real world asset oranization has been one of the hottest narrative this year and it's also one of the that will nominate dominate the next Bull Run I remember two two or three years ago I remember when I was talking to Robin about eight months ago it wasn't that hot any back then but now it's getting hotter not popular so but not popular let's start with Rush tell us how you think uh real world talization can revolutionize the defi era and what do you expect to witness in this year and the next so let's start with Rush what what do you think will be the revolution of real world assets right um look there's a there's a a few things to talk about there uh my focus is always on consumptive use uh when it comes to blockchain technology and uh converting real world assets that might be even let's say receivables as an example right because real world assets don't always have to be tangible uh they can be virtual in a sense as well so think about an invoice that's due in 90 days 45 days or six months that has a floating value itself right now anytime someone brings that on chain uh maybe pays an interest against borrowing it or simply uses blockchain technology to transact against that invoice that's essentially tokenizing a real world asset right and whatever fee they pay in that case actually becomes a consumptive use it's similar to let's say taking an Uber right when you take an Uber you pay the guy let's say $20 you're not expecting to get that $20 back so from my perspective for web 3 uh real world assets bring revolution in the sense that it brings consumptive use and it brings in liquidity that will stay within web 3 it won't just be SP speculative okay let's let's dive a little bit more into this because I know probably not many people know about what is C does but this is really important I stud telecommunication engineer all of us we use our phones all the time you know but there is a lot of background behind there's a lot of carriers uh you have to pay a lot of fees between carriers but can you explain what C does and how uh how you're going to help the industry with real world assets right so most of the people in the room with us today uh might not be completely aware uh of the function of a telecom carrier right so if you look at Telecom service providers there's the infrastructure providers which is the towers Etc and the submarine uh fiber cables that are underwater there's the cell phone service providers which are the operators and then there's the self uh there's the Telecom carriers zebu specifically caters to Telecom carriers they're the ones that connect with let's say AT&T and do to transfer Voice SMS and data AC cross borders because AT&T and do aren't directly interconnected hence they need to work with these Telecom carriers um and what zebu does is we provide them crossb um transaction Services uh within 10 minutes or so which originally took 3 to 16 days wow okay so you're speeding the things up entirely okay that's amazing now let's go from telecommunication let's go to um real estate Robin when we talk about real world problems which we H conquer through tokenization uh what the first one that comes to your mind and what do you think it has been a major problem in the real world and also what are you views I know you're bu into real estate and real world asset with in real estate yeah yeah so we have specifically chosen for Real Estate because I believe that if you're looking at the current rwa space now um there's a lot of shortcuts I believe if you look at what is being tokenized today then you're looking currently generally speaking speaking at treasury bills Securities and so forth that already benefit from a globally recognized system right so looking at that and comparing that to private markets like for example real estate like art like wines and so forth um you're not benefiting from a globally recognized system yet if you look at tokenization in the basics they are always preaching the USPS of tokenization being liquidity and being the transferability of assets but taking that to that private Market environment is not making any sense um tokenizing a real estate asset here in Dubai or somewhere else in the world doesn't necessarily mean that today now all out of a sudden everyone is interested in that piece of that real estate asset right yeah so what we are trying to do is seeing tokenization of rwas especially of private market rwas like real estate as only like 10 or 15% of our operation what is a lot more important than where we are focused on with prop chain is to bring that actual real estate data on chain which is going to solve a lot of problems that we're facing in real estate having a real estate background myself from traditional Finance sit from financing real estate developers and placing Capital uh what I see is that due diligence for example is taking us uh in amounts of time if we are acquiring a commercial asset or whatsoever it's taking us four months five months sometimes even to get all of that data um it's also costing us a lot of money on average when we are doing an acquisition you're looking at somewhere in the range of 100 to 400k Dollar that we're spending on the due diligence by now taking that data out of silos and kind of combining all those different elements of due diligence around real world assets like fiscal due diligence Financial due diligence legal due diligence and so forth and then bringing that on chain making it immutable brings our due diligence timelines back to only 10 20 minutes and is also bringing our cost back by like 80% so that's kind of what we are solving when it comes to real world Assets in private markets that are now living offchain or non-digital so to say thank you Robin um talking about risk management and due diligence Anna you you Le the qu graph accelerator you probably have seen thousands of projects thousand of uh tokens so according to you what the risk associate with investing in tokenized Real Worlds assets through D5 platforms when it comes to accelerators like uh coin Telegraph what are the key factors that look into for any real world asset tokenization initiatives that's the tricky question so we are in the VAP tree will live in our space we have our own taxes taxes and we like to feel ourselves crypted Banks and we can avoid governments real world asset this is a field where we have to say hello to the real world and this is the field where we have to do due diligence not only with web 3 analytics that we have at coin Telegraph we have around 12 due diligence team members and uh we track from 3,000 projects over the year talking about real world asset you have to rely on web 2 legal as well if we talking about web three we have to be secure about technology I don't believe in real world asset teams that appeared two three months ago without no proper experience in this field we have to track uh uh smart contracts and it might be reliable chain I work with base closely I work with propy team so if we are talking about real world asset we have to pick uh trustable chains trustable partners that big boys from Wall Street can rely on even we are from Bap tree I would mention these two key factors and you have to rely on uh VAP to Legal team because we have to track real treasure gold even stable coins everything yeah so real world asset due diligence is the most expensive one that's why we were trying to stay a little bit away from this kind of pro longer anymore not longer anymore finally we're going I don't know if you have a question about legislation but like we can talk about technology as long as we need another panel for that I mean it's not the right panel but I know that you've been ready for from technology perspective like two three years ago but we experienced a beer Market we experienced a lack of trust to to conization in common world right finally we've got MAA I I I always said that bad legislation is always better than no legislation at all so I expect for more real world Assets in U in Europe not us sorry I'm so sorry for proy propy yeah yeah so now they're exploring new markets because of an un us legislation and uh with Dubai with Bali which is two major markets for real world assets you launch those projects it's not scalable yet it's from Project to project very manual handmade structured contracts so if we are talking about real world asset as a huge vertical for investment perspective we have to talk to governments and we have to get support from them at the moment it's still uh a little bit Shady Zone it's high risk zone for everyone who jumped into real wordss contracts deals who who put money on it investors clients Tech part right so it's still a little bit casino but hopefully hopefully we will agree at least with man Norwegian government we will agreed with Indonesian uh government we will show good cases to the world and we will scale real world asset as a huge trustable vertical not only for the investment but also for the consumers thank you Anna thank you Anna talk we come from defi uh now let's talk about uh crypto exchanges Bard so concerning exchanges how would you contrast the rate of user growth with other sectors such as gaming and m coins right in your opinion how solid The Narrative surrounding real world assets concerning token Utilities in central exchanges I love how you put like something with no assets at all like meme coins versus like a real world asset but like to begin with I believe like just because we can put things on chain it doesn't mean we have to for example the old school record keeping was on a paper then it became in a printed in a A4 format today we all get like a digital copy of title Deeds for example if you buy today real estate which comes to your email but still it's in like a A4 format and I think when when Anna mentioned like it's very important to involve governments to you know to participate in this with smart contracts but if we get into again back to A4 and it will be another version of you know this digital smart contract that isn't actually machine reading it means we're going to fail another important aspect from the transactional value perspective that real world assets are really expensive they represent a huge money but again if you look at the transaction cost or value ad cost there isn't much actually happening because again if you today want to buy a real estate there will be a lot of cost that associated with the government but what maximum gets the real estate agent 2% and that's it it's not like a huge representation or even like a bank transactions doesn't represent much therefore I think we have to understand even though we're going to put real world assets into blockchain and smart smart contract what kind of value we going to add and when it comes from an exchange perspective when we list projects why I mention like a deep in project in the beginning because I believe there's a value that can be added for example you are you have I don't know electric car and ideally or probably you also have a charging station in front of your house but usually you don't use it during the day when you commute to the work maybe you want to rent that charging station to your neighbors and having it on chain could definitely help to have a faster transaction add more value and actually make a better use of that real World asset and there are some project that already do this and I definitely see there's an value add on top of tokenizing this real world asset if you just go and basically convert that PDF contract into smart smart contracts probably we won't be adding much value therefore I think it's very important to understand what kind of value we are adding by bringing project on chain and how it can benefit the entire industry because otherwise there will be a lot of kind of onchain money happening without industry actually benefit in and by adding real world assets we can I don't know 100x the market but it won't necessarily increase the market it won't increase the bitcoin's price and so on because still transaction will happen on usdt and things just will pass through us without us adding value or us gaining value and when we talked about mobile operators for example everyone uses the same Tower no matter you have the $10 phone or, phone you are a billionaire you are an average person everyone use the same infrastructure and I think that's one place where like a mobile or telecommunication industry lost it a lot that you know there is no much add value and everyone uses the same towers and probably today in UAE there are like three operators and all use the same towers and there isn't much benefit at it therefore I think we have to be super smart on the world assets we are tokenizing and why we are doing that thank you so much I'm talking being a smart uh russan Robin you're very smart because you jump into real world assets before everybody body else right so we have Telecom and real estate but gentlemen where where else we can find substantial growth of real world any other industries that you can think about yes I mean uh look at any dividend producing micro security there is out there right um traditionally company builds out its valuation they either get an investment Bank to underwrite them or take them on on a best effort basis take them public on a stock exchange they get aors it's a very very extensive process right incredibly expensive to bring real world assets on chain always now let's say you're post Malone um a lot of these music artists uh like to sell their albums and masterit eventually at some point in their lives simply because they live expensive Lifestyles and they want to continue funding it um they lose out on a lot of future revenue and um you know royalty income over time because they sell the entire Master rights at a time some private Equity Firm like Blackstone comes in picks it about a good value builds a nice 10 to 15 year uh royalty value for themselves with asset tokenization uh they wouldn't need to take the long route of going with an investment Bank somehow taking the asset public or OTC um they could simply partner with a you know Securities nft issuer uh take 40% of that asset and give you know retail investors retail everyday investors access to assets um that they never had access to before right because if you even look at the Beatles album I don't I don't even know how old uh The Beatles are now older than you um they've produced about an average of 11% return annualized year overy year uh since you know the Beatles became a thing really that beats inflation in most markets you know so um music real estate uh oil fields refineries all these micro Securities under 4 to 500 million that are dividend producing have a lot of scope uh to be tokenized on a part basis um also for asset owners themselves since they're not selling the entire asset they can leverage a a certain percentage of it to build out their second asset rather than having to leverage the entire amount as a loan they're actually bringing on additional partners with them so I think that's where most of the value for real world asset lies but along with that as I mentioned earlier it's not just tangible assets it's also virtual ones with shorter uh ltvs right um You Look At You Know speaking about uh cell phone service providers Tower infrastructure uh Telecom operators today um they sign up with these uh Tower companies right they don't pay the tower companies for 90 days 6 months at a time so once the towers are built up the tower companies don't pay their vendors for you know 90 days 6 months at a time so there's a large value in factoring those invoices and bringing them on chain as well um with the current inflation the return on that on an insured basis is about 14 to 15% um and uninsured factoring is about 18 to 24% now that's another product that retail has never had access to before it's been highly institutionalized so tokenizing that makes a lot of sense also I think like the best to toonize is like a human time because a gig economy creators economy any transaction that happens to peer top right you take a kareim right to this place it's a between driver and you and definitely it can be tokenized and it's a real world asset your time or your favorite Creator or even like an upcoming artist you don't have to just sell your you know like all your library but also you can support the upcoming artist by tokenizing or like investing in their future and having pece of what they going to create in future and I think that's the I think that's the most exciting part because taking the real world asset real world asset for me like they're very mature already they have the value that like it's like a real estate in London you know it doesn't take a smart man to go in invest because 99% you are right by investing if you have enough money but up investing in an upcoming neighborhood investing in an empty plot land and when after like 20 years it spills something I don't know a palm in Dubai I think like talking ing that and adding value is much a longer vision and can create more investment opportunities and I think that's what excit like us from the centralized exchange point of view otherwise for example like I I can give you an example right you have this project with exciting tokens you invest early on and token price goes up and then there's a usdt transactions that they're like a very minimum everyone compet no one actually earns much and I don't want us end up in that usdt real world assets part and therefore I think we need to be very creative like how we can put next Airbnb on chain and it's still about the real world asset with added value thank you and Robin anything else I know the guys they took the book no I think that I think that most have been said but where we are really focused that in in what we are doing and what I believe that the whole Space now in rwa should be doing is is starting with the bottom line result right before you start building something you should really ask yourself is what we're going the build really making sense and is it actually optimizing uh the bottom line result so if you look at that in the current security space as I mentioned in the beginning of the panel I mean that's where we actually see bottom line result right to like a traditional Securities curve let's say mortgage back Securities we're looking at around 13 14 servicers to that particular set of Securities by tokenizing the majority of that you can already leave eight of them out you know so there's true tangible uh result bottom line result when tokenizing these assets I fully agree with real estate for us personally the focus has never been to now really tokenize a market and trying to bring the fractions of those assets to the marketplace because we do realize that in general I mean these models exist we have crowdfunding I mean these things are around for a decade right the reason why we believe we needed to take that step of tokenizing the assets and building an app so that people can actually by fractions of real estate in a tokenized manner within let's say three or four minutes is to prove our case right that the digital Revolution is taking place and the biggest struggle that I personally see now in rwa why it's not picking up is because people go into the rabbit hole of building applications again that are really focused on a web tree crowd that doesn't make sense you know I mean you're going to service and optimize portions of the Curve but the big volume is in web 2 still so what we are really focused on is building those bridges between web 2 and web 3 so that we get that adoption we prove our case and further down the line when that time comes that everything digitizes and also private Market assets find their globally accepted framework then we can actually see the real result like liquidity and being able to just take your real estate asset which is already on chain which is recog recognized by the oracles that we have connected to the government for example with the land Registries Dubai is really Advanced here and we can take that asset and lend against it and spend it wherever we like I mean that's the future state but we have a long route to go I think we're looking at at least five to 10 years more of development before we will find that framework for a globally accepted Market I want to add that also Real World um real world asset uh they are us de patched yeah and uh if you're talking about VCH Capital perspective we in the VAP tree we are hunting for yet another unicorns we are hunting for 10xs more so the it's not a problem it's a challenge uh at the moment 98 99 even per all asset dedicated to USD as uh as far as crypto will gain mature once people will believe in Bitcoin in ethereum salana whereever once people will be ready to patch their businesses to crypto coins we will have where more cases where people can earn money still doing this real world assets yeah that's my takeaway I I was going to ask you a question I saw you answer already I was going to ask you how do you see real world asset for the next few years from entrepreneur or investor point of view my for maybe longer than 5 years uh we still at technology stage and we still practice uh how it will work how people will use Smart contracts how people will uh use their Wallin how they will transfer coins from one account to another one uh but I don't expect yet another unicorns in this field to be honest Maybe I'm Wrong yeah whatever yeah but in 5 10 years I think it's yet another um unicorn space and if you have Deep Pockets if you're ready to wait if you can invest for this Runway that's is something that I will definitely bullish on not only real estate I guess me neither I'm more bullish on the infrastructure honestly because I think that that is what will drive it um and then we will see all the use cases on pop uh as you're saying I also believe that 5 years is the minimum that we will need in order to find the base layer of that uh the reason why we see it obviously pick up heavier in in traditional Securities like treasury bills and stuff is because the infra is to a certain extent already there on a global scale um which is also the reason why we decided not to go there because I think the opportunity for growth as you're saying with Deep Pockets you can reach far um is bigger in the private markets than that it is in in the currently existing markets you see it as well now in the adoption right you see the huge search in stable coins which are backed by treasury bills now for example and you see still that the private markets are really struggling to get volume and pvl collected uh which is perfectly fine because for us again it's only like a small portion of our Focus thank you guys I have the final question for all of you and especially we have a um early adopters and people that woke up really early to come and see you um I well I can see people here are industry leaders at their oil space I want to ask you let's start with Robin then go all the way to rush as an industry leader um let's for your for real world assets or whatever you're working right now what your ultimate goal um to help the industry Robin My ultimate goal to help the industry po I think that for us the ultimate goal is is to establish is a collaborative nature in the industry where we are focused on I mean uh what I always like to say is that I think that it's pure egoism if you believe that as a company you're going to digitize the industry that you're trying to digitize on your own if you looking at real estate then where we are active in I mean you're looking at probably one of the biggest asset classes worldwide so we believe that everything starts with collaboration collaboration with governments collaboration with the big four let's say of Real Estate state but also with Auditors Banks you name it so for us uh my ultimate goal is to create an ecosystem where the players from my industry can collaborate and can come together to build on that Grand Vision of digitizing the entire value chain of real estate thank that's my goal thank you I think in my opinion the most important especially for the audience who woke up today and came here is to kind of a catch the next gem or next big thing and as I mentioned from the calized exchange point of view there's a huge opportunities to invest in decentralized infrastructure projects and at bitg we already listed several deep in project and I think going and checking them out and trying to understand how real world assets are already being tokenized in different project and maybe investing in them can be a great way to start especially the ones that have their own tokens and they're not usdt Peg it might be definitely risky but also there's a lot of innovation that is happening we can zoom in and try to understand how they work thank you Anna my ultimate goal to extract real value from blockchain in crypto bring it to the people uh divide scam from nut scam help to educate people from coin Telegraph pages and my personal pctures and panels and uh um I experienced war in Ukraine and crypto helped us to collect Millions within ours and we give fat money in 12 hours since the beginning of the war I've seen the beauty of our technology so I want to scale this beauty hopefully not through warse situations but from more peaceful thank you Anna and the host yeah Mr SIU so going back to um Robin's earlier point and Anna's as well that real world asset toiz you know for it to be properly integrated and adoption to go all the way we're still 5 to 10 years away right uh but I believe there's a faceby face process to it so going back to another one of Robin's earlier points um a lot you know majority of the volume today dollar volume today is in web 2 so I think the first step really is to bring that dollar volume over to web 3 and make it as consumptive as possible so the liquidity sticks there needs to be a service provider and there needs to be a service consumer um so at zebu that's really what we're all about um we want to bring in real world services that were initially being rendered through dravi and we want those services to be activated on web 3 um hence we've gone after Telecom carriers as an example right because uh their margins were struggling they were struggling to actually make payments uh there was a big uh problem with you know uh pre-credit it systems with the operators they didn't have enough working capital bringing them to web 3 and giving them instantaneous payments access ACC to lending Services creating lending vaults I think that was the first step to real world asset tokenization of actually bringing web to liquidity and converting it to web 3 so I I believe the first phase of rwa is really converting web to liquidity to web 3 thank you so much ladies and gentlemen thank you so much for coming so early and thank you so much for the speakers Round of Applause for everybody and thank you for hosting us today thank you guys yourself