SEDA Twitter Spaces - The Future Of Asset Tokenization

In SEDA’s Twitter Spaces which took place on February 20, 2024, Dazai hosted Peter from SEDA, Allmils from Polytrade Finance, and Chris Yin from Plume Network to discuss real-world asset tokenization, innovations, challenges, solutions in blockchain integration, and more! Read our notes below to learn more.

Background

Dazai (Host) – Contributor at SEDA protocol

Peter (Guest) – Co-Founder of SEDA Protocol

Allmils (Guest) – Contributor at Polytrade Finance

Chris Yin (Guest) – CEO of Plume Network

SEDA protocol – an intent-based, modular data layer that allows any blockchain to configure & interact with custom data feeds for price data, RPC data, or any available API endpoint

Polytrade Finance – a platform that enables the discovery, tokenization, and liquidity of real-world assets through its marketplace

Plume Network – a modular L2 blockchain dedicated for all real-world assets (RWAs) that integrates asset tokenization and compliance providers directly into the chain

Redefining Crypto: RWAs Integration

Peter shares updates from the SEDA team, mentioning a code freeze and the initiation of audits for the SEDA chain codebase and token migration.
Chris introduces Plume Network, a new chain designed to facilitate the integration of RWAs into the crypto ecosystem. He mentions Plume’s objectives to ease asset deployment and create a DeFi ecosystem around RWAs.
Allmils describes Polytrade as a marketplace for RWAs, aiming to facilitate discovery, trading, and investment across chains. He highlights the importance of cross-chain protocols and the partnership with Plume Network.
Peter recounts his entry into crypto and the evolution of SEDA as a data layer solution for protocols. He explains SEDA’s role in enabling access to external data for blockchain environments and mentions the support of over 230 layer-1 and layer-2 networks.
Chris talks about RWAs as real-world assets tokenized and put on-chain, explaining their resurgence due to high inflation and the attractive yields from real-world treasuries compared to depressed on-chain yields. This shift brought attention and capital to RWAs on-chain.
Chris explains that the interest in RWAs was reignited by the ability to generate income and yields on-chain, expanding the scope beyond traditional T-bills and institutions to include any real-world touchpoint, advocating for a broader understanding of RWAs beyond just tokenization.
Chris describes RWAs as a bridge between the real world and crypto, highlighting their role in attracting regular people to crypto through familiar assets like Pokemon cards or sneakers, thereby enhancing accessibility and participation in crypto’s benefits.
Chris categorizes RWAs into physical and non-physical assets, using whiskey as an example of a physical asset that requires mirroring in the digital realm to ensure ownership and representation on-chain, highlighting the challenge of bridging real-world assets with their digital counterparts.
Chris explains the importance of mirroring both physical and non-physical assets on the blockchain to maintain their real-world value and conditions.
For physical assets, he highlights the necessity of tracking their location, ensuring their condition remains updated, and allowing for redemption by the owner. This involves regular verification and updates from storage locations to reflect the asset’s current state.
Non-physical assets, such as green energy, are easier to manage due to their less tangible nature, focusing more on ownership documentation and regulatory compliance.

Unlocking Real-World Assets with Blockchain: Trends, Challenges, and Solutions

Allmils adds that RWAs include a broad range of off-chain value sources, from physical items like Pokémon cards to financial instruments and digital gaming assets.
He identifies three main drivers for the increasing interest in RWAs: institutional interest, with examples like MasterCard‘s involvement; retail interest from emerging markets seeking assets denominated in stable currencies; and the monetization of previously non-monetizable assets, leveraging Web3 for broader community engagement and financial opportunities.
Allmils highlights the blockchain’s critical role in managing RWAs by providing a single source of truth, reducing transaction and settlement times, and enabling immediate asset transfer and yield generation.
He points out the economic efficiencies blockchain introduces, such as reduced custody and reconciliation costs, and the potential for automated tax reporting. The interoperability offered by blockchain technology facilitates novel financial activities, like using collectibles as collateral for loans.
Chris mentions the significance of bringing RWA onto the blockchain, highlighting the success of stablecoins like $USDC as an example of the demand for such assets in various regions due to their stability compared to local currencies. He mentions that this showcases the potential of blockchain technology in facilitating cross-border use and growth in DeFi.
Dazai asks how SEDA integrates into the real-world assets on the blockchain, facilitating trust in transactions.
Peter explains the importance of trust in Web3 and how SEDA aims to improve it by allowing the creation of intents for requesting data, such as the price of a bottle of whiskey or a Pokemon card’s exchange rate. He highlights SEDA’s focus on enabling real-world asset projects to concentrate on their core offerings by providing quick, efficient, and secure data on-chain.
Peter discusses SEDA’s role in standardizing data transfer in Web3 and the challenges of relying on the third-party reputation for data accuracy. He advocates for a permissionless network where real-world asset data can be integrated efficiently.
Allmils highlights the role of education and simplification in enabling individuals to tokenize and leverage their real-world assets. He discusses the importance of grading and reliable price feeds from Web2 for certain asset classes, like watches and diamonds, to facilitate collateralized lending. He notes the challenge of achieving liquidity for less common assets on-chain.

Challenges and Innovations in Real-world Asset Tokenization

Chris stresses the difficulty of acquiring quality data for RWAs and its impact on the development of the RWA space. He discusses the potential for speculative markets based on real-world events and the complexities of bringing such data onto the blockchain.
Chris highlights the challenges faced by Oracle providers in this process and the importance of solutions that can streamline data integration for RWAs.
Chris explains that Plume’s mission involves simplifying the tokenization process for RWAs, which has been a significant barrier to their on-chain integration. He shares his personal investment experiences in art-related projects and the common challenges encountered, highlighting the need to streamline logistical and foundational aspects of tokenization.
He explains the importance of creating an ecosystem that facilitates the on-chain representation of real-world data, making it accessible for developers to innovate with these assets.
Chris highlights the aim to ease the process for capital deployers to engage with RWAs, thereby enhancing liquidity in the sector.
Chris says that fostering a collaborative environment for RWAs presents a substantial opportunity for growth and innovation, given the nascent competition and the collective benefit derived from sector expansion.
Dazai stresses the necessity for adoption-focused development to simplify entry into Web3 for newcomers, which in turn benefits the broader ecosystem.
Allmils mentions the potential of Layer 2 solutions focused on RWAs to spur innovation by abstracting complex infrastructure elements. He distinguishes Polytrade as operating above the tokenization layer, aiming to aggregate and facilitate access to RWAs across various domains.
He highlights the creation of a unified platform for RWA discovery and trade, akin to what OpenSea provides for NFTs, to address liquidity challenges and enable easier entry and exit points for investors in RWAs.
Allmils discusses the importance of standardizing tokenization for RWAs to foster an ecosystem conducive to leveraging and indexing these assets, introducing their own standard to harmonize the process across different token types.
He mentions Polytrade’s goal to facilitate cross-chain transactions for RWAs, aiming to reduce friction and make these assets globally accessible and interoperable across various blockchain platforms.

RWA Beta Progress: Gamification, NFTs, and Chain Integration

Allmils explains they are still in beta with 15,000 whitelisted users, seeing a split in interest by asset class. Professionals and institutions show more interest in technical financial RWAs, while retail interest leans toward collectibles and luxury products.
He mentions plans for gamification to further engage retail users and anticipates a journey for retail to embrace financial assets.
Allmils shares upcoming project updates, including an NFT collection linked to rewards in their marketplace, the launch of single-sided staking for their tokens, and a major announcement about a new chain integration.
Chris highlights the transition from a private DevNet to an open incentivized testnet, encouraging community participation.
Peter reflects on the evolution of the RWA space and the role of their infrastructure in supporting future RWAs. He announces SEDA’s code freeze and upcoming audit, indicating preparation for a mainnet launch.

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Show Information

Medium: Twitter (Audio)
Show: SEDA Twitter Space
Show Title: SEDA | RWAs The Future Of Asset Tokenization w/ Plume & Polytrade
Show Date: February 20, 2024