Real World Assets (RWAs) are assets that exist off-chain, but are tokenized and brought on-chain to be used within DeFi.
To bring real-world assets into DeFi, the value of an asset must be “tokenized” – a process of converting something of monetary value into a digital token so that its value can be represented and transacted on the blockchain.
RWAs are, in this way, simply tokens representing the value of a real-world asset, which is brought on-chain so that it can be utilized on a DeFi protocol.
Any real-world asset that has a well-defined monetary value can be represented by RWAs.
RWAs can represent tangible assets, such as gold and real estate, as well as intangible assets, such as government bonds or carbon credits. Below includes a non-exhaustive list of real-world asset classes that can be brought onto the blockchain through the RWA vehicle.