In Brief:
- Centrifuge’s Real World Asset (RWA) market goes live on the Aave Protocol.
- Users will be now able to earn yield against stable, uncorrelated real world collateral.
- RWA Market will help in bringing traditional finance (TradFi) closer to decentralized finance (DeFi).
The Real World Assets (RWA) market goes live today. The RWA Market is built on Centrifuge and the Aave Protocol.
The RWA market is also the first diversified real world asset market on the Aave Protocol that helps connect DeFi to the limitless potential of the real world. Opened up with seven more markets, The RWA Market already allows liquidity providers to deposit USDC.
With this development, Aave users who were only allowed to lend against crypto native assets earlier can now earn yield against stable, uncorrelated real world collateral.
As for its working, the Aave Protocol enables money markets to be created so that people can borrow tokens by depositing collateral. Based on the utilization of the market, interest rates fluctuate and go up and down.
END_Labs provides services to RWA Market and helps businesses to finance their tokenized Real Estate Bridge Loans, Branded Inventory Financing, Cargo & Freight Forwarding Invoices, Trade Receivables, and Revenue Based Financing using crypto. As a result, users can also bring a lot of varieties in their portfolio with uncorrelated, stable assets.
RWA Market will help in boosting the progression of traditional finance (TradFi) towards decentralized finance (DeFi).
One can directly borrow from any RWA Market investors. For instance, with this market, if a pool needs capital the issuers can opt for both i.e., accepting direct investments but also depositing the pool tokens in the Aave protocol.
The seven other markets that have opened up are New Silver, Fortunafi, ConsolFreight, Harbor Trade Credit, Branch, database.Finance, and Cauris Global Fintech.
Holders of Aave’s native governance token, AAVE will enjoy an extra perk as they can also propose and vote to add more markets.
Elaborating on the vision of Aave, Stani Kulechov, Founder & CEO said, “The RWA Market is a much needed building block not only for protocols such as Aave, but across DeFi as a whole. Knocking down barriers of entry and making DeFi accessible to all is part of the Aave Companies’ vision, and we are excited to be fulfilling this through the collateralization of real-world assets, made possible by Centrifuge.”
Speaking of Aave’s popularity, SEBA had reportedly submitted a proposal to it for adding SEBA Bank as a Whitelister to Aave Arc which will provide an opportunity for them to access DeFi yields while remaining compliant with their regulatory obligations.
