๐กReal World Assets (RWAโs)
Unlocking liquidity and new financial market solutions
Last updated
Unlocking liquidity and new financial market solutions
Last updated
Product-Market Fit
Aggregating, standardizing, and structuring a loan pool through securitization enables lenders to secure financing at a reduced rate (X%). Consider a scenario where a lender has originated 100 $1 million loans, each with a yield of 10%. In a securitized format, the senior debt may take the form of a $70 million tranche with a yield of 4%, while the junior debt represents a $30 million tranche with a yield of 15% (a common target for hedge funds). As previously explained, investors find this arrangement appealing because it provides them with a diversified pool of assets, enhanced liquidity, and a better alignment with their preferences. However, these asset pools are now funded by banks and hedge funds at a weighted average cost of capital of 7.3%.
How It Work?
Decentralized finance (DeFi) protocols, exemplified by Centrifuge, are emulating the fundamental operations of Real World Assets (RWAโs). This involves aggregating payments, breaking them down, and distributing them among investors through the utilization of a public ledger, smart contracts, and stablecoins. Although a blockchain-powered RWAโs engine necessitates interaction with a parallel traditional system, our unique position as crypto-natives with profound credit and professional finance expertise positions us among the very few globally capable of executing this seamlessly at present.
Isn't it thrilling that LRT tokens (yBNB) not only generate native yield but also create an additional revenue stream by investing in Real World Assets (RWA's), resulting in a combined 20% APY on top of the existing 8% native yield?
Yield24 has forged a strategic alliance with Centrifuge's protocol, aiming to deliver a streamlined experience for holders of Bluechip tokens like BTC, BNB, ETH, or stablecoins. This partnership facilitates a seamless transition for investors, enabling them to enjoy optimal yields on tangible real-world assets. In essence, it mirrors the user-friendly interface of popular trading platforms like Binance, but with a distinctive twistโbehind the scenes, users are actively participating in genuine real estate transactions.
This integration represents a paradigm shift, where blockchain technology is harnessed to offer true real-world utility. By connecting the efficiency of blockchain to real-world assets through Centrifuge's protocol, Yield24 provides investors with a unique opportunity to engage in the high-yield environment of real estate transactions while leveraging the familiarity and convenience of popular tokenized assets. This collaborative effort thus exemplifies the convergence of cryptocurrency trading and tangible asset investments, marking a significant advancement in the utilization of blockchain technology.