Ludovico Rossi - The Bold Truth about RWA

company in 2020 when there was the complete desert. Not even a cactus was out there knowing about tokenization and everybody was talking not about RWA this term wasn't existing yet but everybody was talking about securities no and securities for the customers because at the end we are making business no theory no philosophy we are making business so we need customers they are scared about the word security because security implies a lot of legality and Here all of us we want to escape from legality. No. So in the far west when you had the choice between securities or utility guess what everybody was going to utility right and still we have out there people I mean uh perceiving the value in utility like oh I'm owing a piece of equity of that uh uh company right that project. So when the people is saying yeah I home part of that company actually is not true if it's not a tokenized equity correct.

So the thing is in the inception that we are still in inception of this market the people was really going to utility. So one day few years ago RWA pop up popped up and changed everything. So when we now pitch to our clients, we don't even mention tokens by the way, but RWA are really soft. Okay, pass really in a better way and that's changed everything because RWA is not only security, but it's really more I mean including every everything so going overall. So thank God for this new term that really made our life way simpler.

And now what is the definition of RWA? So a lot of people is saying okay it's a physical assets right but we can see that it's tangible or intangible offchain assets no that are brought on chain by tokenization okay this makes a lot of sense because it's not only real world asset again physical assets but now we can tokenize contracts any kind of contracts and this is the beauty of it right so thanks to this Following this uh definition now we can go to characteristics of those. So IWA the real gold characteristic is not that is an offchain asset is not that is represented by a token but is that it's legally enforcable and this finally changes everything because it's not a utility. Okay. So this really is bringing value of real assets on the blockchain and this is the huge difference and yes we cannot escape legality.

So we have to go through lawyers. Another thing I want to talk about receiving a call is that uh I want to pass from romanticism to the B reality. Okay. So when we all talk about RWAs is like yes everything can be tokenizable of course yes but actually makes sense to tokenize everything or today what makes sense to be tokenized actually. So we should also ask to ourself about that.

No, what kind of assets we want to see on chain? What what kind of asset we want to invest in? What kind of asset we want to trade? Right? So is everything tokenizable?

Yes. But then we have to be I mean a little bit pragmatic and realistic about it. So reality is a little bit different. a big shift in this in RWA it's also about ownership right because uh this is a vain company I'm sure that the majority of you they know it so the thing is when you tokenize a real estate everyone is talking about ownership no okay so yes I can be owner of a little piece of this real estate for example but are you at the end of the day a real owner I mean if you go to the public registry where all the ownership of the assets real estate in this case out there is uh keeping track of I mean are you a real owner or not? What are your rights on that assets at the end?

So by the way a piece of real asset yes maybe but in reality you are signing a contract okay and that contract it's different it's not about ownership but it's more about rights and usually our economical rights okay so the thing is are we or we will get there where we can be owner just by buying a utility tok utility a token tokenized uh asset in this case real estate in the future. Yes, but we need the public registry in every country to be aligned with that using blockchain technology and we are in Italy, I'm living Spain, whatever, but there are countries that are not at the forefront of this technology yet. Okay. So, this happen is happening actually only in Dubai where they tokenize the real estate deeds. Okay.

Directly but nowadays can we tokenize assets? Of course, yes. And what we are going through in tokenizing is a signing contract actually you know a signature I mean majority of you working use for example the signature tools and that's accepted by European or other jurisdiction. So when you are buying and investing in tokens tokeniz RWA in general now we will go over over it you are signing a contract and again be careful yesterday last night I had an interesting conversation with Tulio I don't know if he is in the in the room and uh he and his partner were talking asking to me yeah but I mean a smart contract is not recognized as a contract it's like yes but a smart contract a different thing. I mean what we are doing here tokenizing is actually taking this contract uploaded and registering on the blockchain into the metadata of the smart contract.

Okay. Sorry if I'm talking about defy whatever but this is the reality. Okay. So the thing is today we can tokenize this house. Yes.

Now how can we do it? No. Yeah. The house is there. Maybe the house is yours awfully.

No. Yeah. So the thing is you want to tokenize it first of all why you should do it and what is the reason no actually the beauty of tokenization is extracting liquidity from a liquid assets no this is the first big thing so you don't have to sell the house that is really expensive but maybe you can recover just a bit selling a portion okay then you will offer to the crowd some interest of something really sexy now we will talking about sexiness uh in the future but the thing is you will offer some rice okay in order to don't sell the asset. But now you as a physical person can you tokenize this asset? The answer is not is no.

So the asset should be owned by a company. Okay. Can be an SL here limited company here in Italy. Yes. Okay.

So the thing is we need a company owning the asset and then issuing a contract. So we need lawyers, legal partners and then the investor will sign digitally a contract. Can they sign just by purchasing the assets and signing the transaction with the wallet? Yes. Why?

Because it's connected with the KYC. Okay. And again the beauty of our WAS is that it's legally enforcable. This means that if tomorrow you run away with the asset because you can sell it because even if they purchased a part of it on the public registry that is your your name, you are the full owner of it. Right?

So in that case you can run away with the house and the money from the house plus your money. Yes, you can do it but you can go in front of a judge and find him I mean fine and denounce him in front of that and the judge will give you the reason. Okay. So scam is always around you can do it make the rule made the rule made the scam right the solution but actually this is the beauty of tokenization no we can now I mean be more efficient and now we will talk about that but the thing important thing is that a smart contract is not the contract you sign you sign a proper contract that has a legal enforcement and now what is sexy because here we have a lot of traders. We love to talk about DeFi.

I don't know how many people invested in meme coins etc. And I personally this is not sexy to me. I don't know for some of you is that sexy? No. Okay.

This is the average return on real estate basically. So now that we are like yeah RWA is the future. We want to tokenize everything but every time every time I I listen someone talking about RWA is yeah what do you would you like to tokenize real estate it's like yeah but then is not sexy to anyone. So why should we tokenize real estate then? Is this sexy?

Yeah. Is that realistic? No, maybe we have some lucky guy here, but I saw no lambos out there. So, uh yeah, the thing is uh this is not realistic at all. And we have been speculating.

Yes, let's speculate. I'm the first one speculating not to meme coins, but it's speculating. Okay, so the thing is actually this is sexy. This is realistic. This is doable and this is something that we never had access before because I mean uh real finance professional finance is offering them is playing with those uh returns but before for us I mean we go to the bank the bank is offering even less than this and the real estate to do that it's like oh great but you need a huge capital right so the thing is now we can get have access to this okay what is this if we do real estate for example can be like flipping.

Someone knows about flipping. What is this? Okay, flipping is when you buy house, you restore it, you sell it. Okay, you can make an operation in under one year. Yes.

And you can make really great margins like 40%. I know people are making 40% on that. Okay. In less than 12 months. So now if you have the opportunity to participate in it with 100 bucks or maybe less.

I mean I always suggest more but maybe less you can have access to maybe 25% 25% return and that's good in 12 months it's secured it's enforcable it's way lower risk no risk and return always goes align right so the thing is this is the reality and what we want to bring on chain because also I'm tired of receiving leads with me and my team I mean uh having people Yes, I want to tokenize and raise million. Okay, but why you want to tokenize? No, because tokenization is the future. It's like, okay, great. Do you have a strategy?

No, but I'm tokenizing. It's like, mate, life is not so simple. And tokeniz raising capital or tokenization is even more difficult. So why are you bring it? Probably your shitty assets unchained.

I know because had problem to fund raise in the default world, you know, in the trade system. So the thing is uh okay so why are you tokenizing no this is uh the solution it's like no mate I mean we need to bring on chain sexy assets that's the the thing we have to do okay and now going a little bit back on what is an RWA we said also that is intangible no so I mean I'm more and also that the asset should be owned by a company so when we issue a contract of that actually we are choosing what kind of contract we are issuing can be equity. So I can sell typically equity and participation of my SPV register in VVI or whatever. Okay. Or I can issue depth loans, corporate bonds.

That's good actually. That's really interesting. And when we are talking about corporate bonds, maybe we can starting to work not with retailers but with professional institutions actually financial institution. So basically I'm a real lover of private credit and I love to work with professionals. So now startups, retailers etc.

you can use our product with from 29 per month. Yes, cool. Use it. But if you guys there is someone professional in finance in this room. I mean we can really tokenize any kind of financial instruments and if you offer something like that that's sexy.

Okay. So I have less than five minutes. So let's run a bit. It's all about efficiency. I mean uh tokenization is nothing new.

I mean we didn't invent anything. Uh the world will change but actually is not a big change. It's a ch a big change in efficiency. But there is nothing new. I mean blockchain is a technology is allowing me or allowing us and all the financial system to be really more efficient and this is the revolution because when we have a I don't know a financial institution issuing a bond in less than two weeks raising a million having the settlement in less than 24 hour I mean that's beautiful and then in a secondary market that now this is a big bold true uh you can exchange in peer-to-peer from after 24 hours.

I mean that's beautiful. Okay, but it's not sexy like DeFi and everything. The thing is this is the bold truth about RWA not nothing anything new but it's just more efficient. So allows bank and all the big uh guys out there to really be more efficient and decrease by 70 80% maybe more their operative cost. That's the real value proposition.

And that's why ah by the way secondary market I forgot this line. Okay. Another thing is oh yes I can trade that asset in a secondary market. I maybe can list it on Binance. You no you cannot not yet.

Uh the thing is doesn't exist the secondary market yet. It's an inception uh of this sector. There is a lot of demand is growing. Everyone is uh getting more professionalized about it. The legal frameworks are evolving by the way today.

Let's trust finger cross to Trump signing the clarity hack act that would be really great actually uh because more people will follow than other countries. So again I mean secondary market is not out there yet. It's possible in a private way like peer-to-peer yes but it's you still building your market. Soon we will see the sex centralized exchanges jumping in with the licenses and able to trade shares like for example our friend Robin. Okay, so wrapping up, I have to close.

We are seeing finally the big guys, the professional financial institution jumping in because they see an opportunity and the opportunity is about efficiency and finally we will see regulation but also big players, our players like Bit maybe and other players getting license licenses to actually allow us to trade equity, bonds or other financial tools. Thank you very much and if you want to talk more with me, I will be out there.