Real world assets.
According to investor Santiago Santos, it is a topic that was “heavily discussed” at the Blockworks Permissionless II conference. But he wonders whether the phrase contains a real story or is just the latest addition to the industry’s ever-growing collection of meaningless buzzwords.
On the Empire podcast (Spotify/Apple), Santos reflects on his conference experience, observing a “renewed interest in DeFi,” with a particular emphasis on the concept of real-world assets. Despite the attention, not everyone agrees the category will survive, he says.
Blockworks co-founder Jason Yanowitz quotes a conference panel discussing the topic, with Qiao Wang, founder of Alliance DAO, claiming that the concept of real-world assets is a “fake story.”
“His point was,” Santos replies, “stablecoins are real-world assets.”
“The way we characterize and describe real-world assets is an all-encompassing term,” says Santos, who argues that industry leaders need to be “a little more discerning” when discussing the broad topic.
Santos suggests that many different classifications and potential “buckets of real world assets” could gain traction over time, while others will fail.
“Certain real-world assets lend themselves more to on-chain traction than others,” he says, adding that many potential assets don’t deserve “even to have a crypto-native ‘wrapper’.”
Yanowitz suggests that the technology’s selling point is its ability to “import” yield in various forms, including stablecoins. He points to Maker as an example of a company that carries out the process by valuing assets off-chain and then importing value into the blockchain.
“In the coming year or years we will find and develop more ways to import yield into the chain.”
In crypto we always get the nomenclature wrong
One frustration with the term “real-world assets,” Yanowitz says, was explained at the conference by Superstate CEO Robert Leshner. The phrase “real world” – as a means of distinguishing the assets of others – implies that on-chain is logically not the real world, he explains.
“There are traditional assets and there are crypto assets,” says Yanowitz. “Or there are assets outside the chain and there are assets in the chain [assets].”
“We always get the nomenclature wrong in crypto,” Santos smiles. “As a sector we do certain things very well, but nomenclature is not one of them.”
Santos reflects on the industry’s past failures in real assets, noting that the topic is “very polarizing because it failed before.” He cites the example of Harbor, a “super-hyped” tokenization platform for real estate funds that failed to gain traction after obtaining a broker-dealer license in 2019.
“It hasn’t lived up to its promise,” he says. “It was a good idea. It was like it wasn’t the right time. It was too early. The infrastructure wasn’t there,” he says. “That’s the state of crypto today.”
“It’s just important to take into account things that have been tried in the past [and] Take another look at some of them,” he says, “because the infrastructure has come a long way.”