The $16 Trillion Opportunity: MANTRA's Vision for RWA Tokenization
Bringing RWA On-chain Starting with the Middle East and Asia
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Blockchain technology and cryptocurrencies were born from a vision of creating an alternative financial system independent of the traditional financial system. Yet, more than a decade after Bitcoin's inception, it's becoming clear that the mainstream adoption of crypto is not from replacing the existing financial system, but by integrating with it.
As blockchain technology matures, we're witnessing that traditional finance is increasingly embracing blockchain. This convergence of traditional finance and blockchain innovation has given birth to a revolutionary concept: Real World Asset (RWA) tokenization.
RWA tokenization promises to democratize access to previously illiquid assets, enhance market efficiency, and create new avenues for economic growth and financial inclusion. Larry Fink, CEO of BlackRock, the world's largest asset manager, captures this potential: "I believe the next generation for markets, the next generation for securities will be tokenization of securities."
How big is this sector and what is the potential disruption? The existing market projections show a significant opportunity. According to the BCG report from 2022, the market cap of tokenization of global illiquid assets is projected to be a $16 trillion by 2030, and represents 10% of global GDP.
In contrast, the more recent 2024 McKinsey analysis projects that the total tokenized market capitalization could reach around $2 trillion by 2030. The forecast ranges from $1 to $4 trillion and takes into account factors such as regulatory challenges, technical complexities, and the need for greater coordination among market participants to achieve widespread adoption of tokenization.
Ondo Finance is the leading RWA protocol where the price is 5x since its launch at the start of this year, but another RWA project had its price increased by over 30x in the past 1 year.
That project is MANTRA Chain ($OM), with a recent $11 million funding round led by Shorooq Partners, is positioning itself at the forefront of this revolution, focusing on constructing regulatory-compliant infrastructure and empowering developers to create RWA-focused applications.
In this report, we will explore MANTRA Chain as well as the following topics:
What is RWA Tokenization and its pros and cons
Deep Dive into MANRA Chain
Challenges and opportunities
Future implications of this technology on global finance
What is RWA Tokenization?
Before going into MANTRA network, it is important to be familiar with RWA Tokenization and its pros and cons. It is essentially the process of creating digital representations, or tokens, of physical or traditional financial assets on a blockchain to allow them to be traded, transferred, and managed more efficiently.
The scope of RWA tokenization is broad, encompassing various asset classes including:
Mutual funds
Bonds
Loans
Real estate
Commodities
And more
Early examples of RWA tokenization include cash and deposits, bonds, mutual funds, and loans/securitization. As the technology matures and regulatory frameworks evolve, we can expect to see a wider range of assets being tokenized.
Advantages of RWA Tokenization
RWA tokenization brings several significant benefits to the financial landscape. Let’s see what makes this innovation exciting.
Increased Efficiency: RWA tokenization enables 24/7 availability, instant global collateral mobility, near-instant settlements, and automated processes. This can significantly reduce the time and effort required for asset management and trading.
Enhanced Transparency: Shared ledgers inherent in blockchain technology reduce errors and increase visibility. This improved transparency can lead to greater trust and reduced fraud in financial transactions.
Improved Liquidity: Tokenization facilitates easier fractional ownership and has the potential to attract a broader investor base. This can make traditionally illiquid assets, such as real estate, more accessible and tradable.
Cost Reduction: By streamlining operations and reducing the need for intermediaries, RWA tokenization can lead to significant cost savings in asset management and trading.
High Potential: The programmability and composability of tokenized assets open up possibilities for new financial products and services, fostering innovation in the financial sector.
Regulatory Compliance: Ensures compliance with anti-money laundering (AML) regulations and facilitates easier integration with existing financial systems.
Challenges of RWA Tokenization
Despite its many advantages, RWA tokenization is not without its challenges. Let’s explore some of these considerations.
Regulatory Uncertainty: Many jurisdictions lack clear regulations regarding tokenized assets, creating potential legal and compliance challenges for issuers and investors.
Technical Complexities: Integrating tokenized assets with existing financial systems and ensuring interoperability between different blockchain networks presents significant technical challenges.
Security Concerns: The digital nature of tokenized assets introduces new risks associated with cybersecurity threats and potential vulnerabilities in smart contracts.
Adoption Barriers: RWA tokenization faces a "cold start" problem, requiring simultaneous adoption by both issuers and investors to gain traction.
Market Disruption: The shift to tokenized assets could lead to a loss of revenue for some incumbent players in the financial industry, potentially creating resistance to adoption.
Infrastructure Needs: Realizing the full potential of RWA tokenization requires the development of new technological infrastructure and industry-wide standards.
Privacy and Data Concerns: While blockchain offers transparency, it also raises questions about how to balance this with necessary privacy and data protection measures.
KYC Requirements: It is likely that RWA protocols require KYC. This potentially limits accessibility for some users, introduces centralized points of control and potential failure, and raises privacy concerns due to the collection and storage of personal information. For example, MANTRA Chain requires users to verify themselves before they can stake $OM.
What is MANTRA Chain?
MANTRA Chain was first known as MANTRA DAO and was launched in 2020 on a Polkadot Chain with the aim of being a comprehensive DeFi protocol focused on lending.
In July 2023, it evolved its focus and aimed to bring real world assets on-chain by building a regulatory-compliant infrastructure for the tokenization and management of tokenized real-world assets. The new chain provides tools and infrastructure for developers to create RWA-focused decentralized applications (dApps) and protocols. The chain is also looking to incorporate a sustainable yield engine to attract and reward participants in its ecosystem.
With physical offices in Hong Kong and Dubai, MANTRA is strategically positioned to tap into both Asian and Middle Eastern markets, focusing on emerging economies to boost market liquidity and foster growth in regions traditionally facing hurdles in entering established financial markets.
Key Features of MANTRA Chain:
For Users:
From day one of mainnet, users will have access to decentralized exchanges (DEXs) and yield-bearing vaults.
The platform also facilitates easy conversion between fiat currencies and digital assets through its fiat on/off ramp.
Additionally, MANTRA Chain provides a passportable Decentralized ID (DID) / Soulbound NFT system for KYC/KYB purposes, enhancing user verification and security. This also means that users only need to complete the KYC once to access various projects.
For Developers:
MANTRA Chain creates a developer-friendly environment that fosters innovation in the RWA space. Developers have access to a comprehensive set of tools and infrastructure for creating RWA-focused decentralized applications (dApps) and protocols.
The MANTRA Token Service SDK enables developers to create and manage tokens on the MANTRA network with ease.
Built on the Cosmos SDK, MANTRA Chain also offers interoperability and access to CosmWasm, simplifying the dApp creation process for existing CosmWasm developers. This also allows for seamless asset transfers and interactions with other blockchain networks.
For Institutions:
MANTRA Chain provides a KYC/AML compliant walled garden, ensuring all network participants are vetted according to regulations, thus reducing risks.
Institutions can enjoy reduced costs for compliance and onboarding thanks to pre-screened Decentralized Identifiers (DIDs), which eliminate the need for repetitive and costly processes.
MANTRA Chain opens up access to global markets, allowing institutions to expand operations compliantly on-chain, enhancing trust, auditability, and data-sharing abilities.
Institutions can leverage MANTRA Assets for real-world asset tokenization, ensure adherence to regulatory requirements across various jurisdictions through MANTRA Compliance, and utilize the Launchpad for capital formation in new RWA projects.
Ecosystem & Partnerships
MANTRA is actively building a robust ecosystem and forging strategic partnerships to strengthen its position in the Real World Asset (RWA) tokenization space. Let's explore some key MANTRA's ecosystem development and partnerships.
Partnership with Ondo Finance
One of MANTRA's significant recent partnerships is with Ondo Finance, a leader in RWA and institutional-grade blockchain-enabled investment products. This partnership includes:
RWA Savings Vault: MANTRA is launching an incentivized RWA savings vault featuring Ondo's USDY, a tokenized note secured by short-term US Treasuries and bank deposits.
USDY Integration: MANTRA will feature Ondo's USDY as a genesis asset upon its mainnet launch, expected later in 2024. This integration aims to provide a fungible interest-bearing base layer of liquidity.
Incentive Structure: Early adopters who remain invested until MANTRA Chain's mainnet launch will receive additional rewards in the form of Ondo (ONDO) tokens and mainnet OM coins.
Sustainable Rewards: A "ratcheting" reward schedule has been implemented to prevent reward dilution as more users participate.
This partnership demonstrates MANTRA's strategy of working closely with leading RWA projects to create a liquid Layer 1 blockchain purpose-built for RWAs.
Source: MANTRA Chain
Partnership with MAG Group
MANTRA has recently partnered with MAG Group, a Dubai-based real estate developer, to tokenize $500 million worth of real estate assets. This marks one of the largest RWA tokenization projects till date outside of treasury tokenizations.
Key aspects of this partnership include:
Phased Tokenization: The assets will be tokenized in multiple tranches, with the first tranche including the Keturah Reserve residential project in Meydan, Dubai, and a $75 million mega-mansion at 'The Ritz-Carlton Residences, Dubai, Creekside' development.
Yield Generation: Investors will earn yields through stablecoins and MANTRA's OM tokens, with expected yields of 8% from stablecoins and additional OM token allocations.
Ongoing Discussions: The specifics of the yield, including the choice of stablecoin and the amount of OM to be allocated, are under discussion between MAG and MANTRA.
Market Impact: This partnership represents a significant step in MANTRA's real-world tokenization efforts, following its $11 million fundraise in March for this purpose.
This collaboration demonstrates MANTRA's commitment to bringing substantial real-world assets onto the blockchain, potentially influencing the broader RWA landscape.
Source: Coindesk
Partnership with Lumia
MANTRA has partnered with Lumia (previously Orion DEX $ORN), which is a liquidity layer that leverages capital-efficient liquidity from various sources, including on-chain and on centralized exchanges. This would potentially enhance liquidity for RWA dApps building on MANTRA Chain.
Key aspects of this partnership include:
Liquidity Access: dApps on MANTRA Chain can easily access Lumia's multichain liquidity, improving capital efficiency and reducing the need for large capital deposits in smart contracts.
RWA Liquidity Aggregation: Lumia is working to aggregate real-world assets and data into its comprehensive liquidity layer, providing immediate liquidity to RWA projects from diverse sources.
Diverse Liquidity Sources: The partnership connects MANTRA Chain projects to liquidity from centralized exchanges (e.g., Binance, OKX, Kucoin) and decentralized platforms (e.g., Uniswap).
Complementary Technologies: MANTRA's security-first Layer 1 blockchain, built on Cosmos SDK, offers modularity, customization, and interoperability, which aligns well with Lumia's liquidity offerings.
Regulatory Compliance: MANTRA's Compliance & Guard module ensures a secure environment for RWA innovation, providing thorough KYC/KYB and AML checks.
Identity Verification: The Guard module facilitates identity verification across dApps within the Inter-Blockchain Communication (IBC) framework using passportable Decentralized Identifiers (DIDs).
By partnering with Lumia, MANTRA Chain can allow its users to access more liquidity, improving their experience when trading RWAs. This can help RWAs to transition onto the blockchain and overcome traditional liquidity sourcing challenges.
Source: MANTRA Chain
Partnership with Zand Bank
Another significant partnership in MANTRA's ecosystem is its collaboration with Zand Bank, which is a bank licensed by the Central Bank of UAE. This partnership aims to boost the UAE's digital asset landscape and develop robust regulatory frameworks for RWAs. Key aspects of this partnership include:
Regulatory Compliance: The partnership focuses on defining clear frameworks for RWA tokenization in compliance with the Virtual Asset Regulatory Authority of Dubai (VARA).
Digital Banking Integration: Zand Bank, as the UAE's first licensed digital bank, brings extensive experience in financial services and digital innovation, complementing MANTRA's blockchain expertise.
RWA Adoption in UAE: The collaboration aims to remove hurdles and foster trust, confidence, and widespread adoption of RWAs across the UAE region.
Technological Synergy: Zand Bank plans to leverage MANTRA's RWA-focused blockchain to enhance their financial offerings, providing clients with greater control over investments and improved transaction clarity.
Standard Setting: The partnership aims to establish industry standards for tokenization in the Middle East, potentially influencing the broader RWA landscape.
Michael Chan, CEO of Zand, emphasized the potential of this collaboration to "redefine how we transact and manage ownership" through blockchain technology.
Source: MANTRA Chain
Upcoming Protocols
MANTRA just finished its first hackathon, focused on real world asset (RWA) tokenization, attracting over 200 developers in Jaipur. The event highlighted several innovative projects built on the MANTRA Hongbai Testnet, demonstrating the potential of tokenized RWAs.
Here are some of the standout projects:
1. Augmentium: A 1:1 collateralized, synthetic gold-backed stablecoin pegged to real-time gold prices, offering stability and reliability. This is similar to PAXG with a market cap of about $430 million.
2. RWA Stockholm: A comprehensive platform for buying, selling, and trading RWAs, featuring a marketplace, RWA swaps, liquidity pools, and staking.
3. DeFi Land: Enables fractional ownership of real estate through NFTs based on RWAs, democratizing real estate investment.
4. Real Estate RWA Marketplace: A decentralized platform for secure, transparent, and efficient on-chain property transactions, aiming to eliminate intermediaries.
5. Auctionator: An on-chain auction platform that enhances transparency, security, and efficiency in the auction process for RWA trading.
6. Real Vault: Converts RWAs into digital tokens for fractional ownership, listing them on an exchange to improve liquidity and investment opportunities.
7. Real Lend: Facilitates lending and borrowing using RWAs as collateral, addressing challenges in providing tangible collateral for loans.
The hackathon's success demonstrates the growing interest in RWA tokenization and its potential to revolutionize traditional asset markets. By leveraging blockchain technology, these projects aim to increase liquidity, improve transparency, and democratize access to various asset classes.
The innovative solutions developed during this event have the potential to significantly expand the utility of tokenized RWAs and add value to the MANTRA ecosystem. As these projects continue to evolve, they may play a crucial role in bridging the gap between traditional finance and decentralized systems, paving the way for broader adoption of blockchain technology in real-world asset management and trading.
Potential Future Partnerships
While specific details of other partnerships are not provided, given MANTRA's focus on RWA tokenization and regulatory compliance, we can speculate on potential types of future partnerships:
Traditional Financial Institutions: Banks, asset managers, and investment firms looking to tokenize their assets.
Regulatory Bodies: Collaborations to ensure compliance and potentially influence the regulatory landscape for RWAs.
Other Blockchain Projects: Partnerships with projects focusing on different aspects of DeFi or RWA tokenization to create a more comprehensive ecosystem.
Technology Providers: Collaborations with firms specializing in areas like KYC/AML, cybersecurity, or blockchain analytics to enhance MANTRA's offerings.
Real Estate Firms: Given the potential for real estate tokenization, partnerships with property developers or REITs could be valuable.
MANTRA Chain's approach to ecosystem building and partnerships appears to be focused on creating a comprehensive, compliant, and liquid environment for RWA tokenization. By collaborating with established players like Ondo Finance and potentially others in the future, MANTRA is positioning itself as a key player in bridging traditional finance with blockchain technology.
Tokenomics
Disclaimer: Any strategies or trading ideas below are purely hypothetical and based on assumptions, and are not financial advice.
MANTRA Chain started with a 5-year schedule which is now almost 4 years in and over 90% has been distributed. As a quick overview, the original tokenomics was 51% public and 49% non-public which consisted of private sale, team & advisors, grants, and reserves.
Tokenomic Revisions
Due to its new focus and transition from being a DeFi protocol to its own chain, the MANTRA token ($OM) underwent a significant tokenomics upgrade to support this shift.
The key points of the new tokenomics are:
Total Supply: The total supply will increase from the current 888,888,888 OM tokens to 1,777,777,776 OM tokens. These tokens will be minted for various purposes related to the launch and growth of MANTRA Chain.
Elastic Issuance (no capped supply): Beyond the fixed supply, there will be an elastic issuance of new OM tokens to accommodate the increasing complexity of OM as a chain token. However, there are plans in place to reduce OM inflation over time, eventually transitioning to real yield staking once the RWA ecosystem is sufficiently developed.
A clear breakdown is not provided, just that the new tokens will be allocated as follows:
OM Upgrade (Fixed): Reserved for existing Sherpa community, who are users contributing content to the ecosystem, offering up to a 1.35x multiple on their stake.
Genesis Airdrop & Incentivized Testnet (Fixed): To promote MANTRA Chain usage and incentivize testnet participation.
Core Contributors (Fixed): To reward and incentivize key stakeholders in the MANTRA Chain ecosystem.
MANTRA Association (Fixed): Strategic reserve for protocol development and ecosystem support.
Ecosystem Initiatives (Issued): To support ongoing growth through developer programs, hackathons, and events.
Staking Rewards (Issued): To distribute block rewards to validators securing MANTRA Chain.
Community Pool (Issued): Reserved for community-driven grant proposals.
While MANTRA's tokenomic revisions aim to support its transition to a chain-based model, doubling of total supply is a significant increase and the shift to an elastic issuance model may raise questions about token value dilution in the long term.
The lack of a clear breakdown for token allocation could lead to concerns about transparency and the long-term distribution of tokens among different stakeholders.
We could potentially see a repeat of the downtrend from 2021 to 2023 if the new token inflation and subsequent selling pressure is not managed properly.
Staking Rewards
Previously users could stake OM and, depending on which chain, earn between 14% to 40% APR from token inflation. However, with the revised tokenomics, these staking rewards have now been discontinued to prepare for a new staking program.
In the new staking program, instead of earning OM as staking rewards similar to other PoS chains, staking OM now gives you up to a 1.35x multiplier, based on how long you have staked, when the new OM token is released.
Meaning if you have staked since the beginning of this program, and the new OM tokens are released, you will effectively have 1.35x more OM tokens.
It is not clear if this is vested or not, but these new OM tokens will be distributed on MANTRA Chain itself.
There might be a potential cash and carry trade where you stake OM and short OM to earn the OM rewards while earning OM funding rate, however, this is strictly not financial advice.
More information about their new staking program can be found here.
Price Chart and Projections
Source: tradingview.com
Let’s take a look at the price chart to understand how the token has performed.
The token launched in 2020 and followed the market cycle of 2020 and 2021s. The large down trend from 2021 to 2023 was likely due to selling pressure from token unlocks as discussed in the previous section.
After announcing their shift to RWA in July 2023, the price spiked up but ultimately continued its downtrend which bottomed around September.
It has increased by over 30x from the lows of $0.02 to the current price of around $0.66, in less than a year.
To see possible retracement areas, I am using fibonacci retracements based on linear (red) and log scale (orange), we see that there’s decent support confluence around the 0.382 fib retracement on the linear scale around $0.65, but it is still far from the 0.382 fib retracement on the log scale around $0.24 which is around 65% lower from the current price.
Using the fib extensions, the first resistance at 0.382 is around $1 which is near its previous highs as well, with the next resistance at 0.618 which is around $1.25, around 84% higher from the current price.
As the price is around the support now, there’s a good risk/reward ratio above 6 if you set stops below $0.6 and take profit at $1.0. As always, none of this is financial advice.
Now let’s look at the token holders.
Token Holder Analytics
Now let’s take a look at the $OM token holder analytics. The token exists on 3 different networks, with most of it on Ethereum so we’ll look at that version.
Based on the Dune Analytics dashboard provided above which shows the distribution of small (at least 1 token), medium (at least 1,000 tokens), and large holders (at least 100,000 tokens) over different time periods, we can observe several key metrics.
Holder Distribution:
There's a healthy distribution of tokens across different holder categories. The presence of large holders (whales) is balanced by a significant number of smaller holders, suggesting a diverse investor base.
Unique Holders:
The number of unique holders steadily increased in 2023 even though the price action was strong and had a 10x from September 2023 to March 2024. The number of holders spiked after March 2024, pointing to growing adoption and interest in the project, potentially due to the strong RWA trend in crypto.
MANTRA Chain vs Ondo: Comparing Key RWA Players
Now that we’ve explained MANTRA Chain, let’s see how it stacks up against Ondo.
Ondo Finance can be viewed as a decentralized investment bank and asset management platform that focuses on bringing institutional-grade financial products to the blockchain. Ondo v2 was launched in 2023 with the aim of accelerating DeFi adoption among mainstream investors.
Some of its investors includes 1kx, Arete Capital (digital asset hybrid fund), Coalition Operators, Coinbase Ventures, and CoinList.
Their key features and offerings include:
Tokenized Products: Ondo offers tokenized versions of traditional financial instruments, such as USDY (a yield-bearing stablecoin backed by short-term US Treasuries). They also offer Ondo Vaults, which allow users to earn yields on various cryptocurrencies.
Institutional Focus: Ondo primarily targets institutional investors and aims to bridge traditional finance with DeFi. The project places a strong emphasis on regulatory compliance to attract institutional participation, and participants have to go through KYC first. To boost confidence, they have also taken proactive steps towards regulatory compliance, including registering with the SEC as a transfer agent.
Multi-Chain Presence: Ondo has expanded its operations across multiple blockchains, including Ethereum, Polygon, and Arbitrum, enhancing accessibility and reducing transaction costs. To better deliver on their multi-chain goals, they developed a feature called Ondo Bridge, which is a cross-chain bridge that allows users to transfer Ondo’s tokenized assets between different blockchain networks to enhance interoperability and liquidity across various chains, making it easier for users to access Ondo's products regardless of their preferred blockchain.
Key Differences between MANTRA Chain and Ondo Finance
1. Infrastructure Level: Ondo operates primarily as a platform and product provider on existing EVM blockchains whereas MANTRA is building its own blockchain on Cosmos specifically for RWAs. This offers MANTRA more customization but also faces greater development challenges.
2. Target Audience: Ondo seems more focused on institutional investors and traditional finance integration whereas MANTRA targets a broader audience, including developers, institutions, and retail users.
3. Product Offering: Ondo specializes in creating tokenized versions of traditional financial products and are live with hundreds of millions of TVL, whereas MANTRA aims to provide the underlying infrastructure for a wide range of RWA applications and is still being developed.
4. Geographical Focus: Ondo appears to have a stronger presence in Western markets whereas MANTRA is actively pursuing partnerships in Asia and the Middle East.
5. Regulatory Strategy: While both prioritize compliance, Ondo has taken more visible steps towards regulatory alignment in the U.S., which could impact their respective market penetration strategies.
TVL Comparison
Ondo Finance (ONDO) has a Total Value Locked (TVL) of $547.77 million while MANTRA DAO (OM) does not have an accurate TVL as they are still in development.
The existing TVL of DeFillama consists of $OM staked on Ethereum that have not yet migrated to MANTRA Chain, and staked governance token is not counted as TVL.
Price Charts
While both ONDO and OM (MANTRA's token) are part of the RWA sector, their price movements may not always be directly correlated due to their different focuses and market perceptions.
As of writing, Ondo has a market cap of $1.6 billion with an FDV of $11 billion, while MANTRA's market cap is $546 million with an FDV of $1.176 billion.
At the moment the tokens appear to be ranging against each other.
It's important to note that while both projects operate in the RWA space, they are not direct competitors but rather complementary players in the ecosystem. This is evidenced by their recent partnership, where MANTRA is integrating Ondo's USDY product into its ecosystem.
Both Ondo Finance and MANTRA are playing crucial roles in the development of the RWA tokenization space, albeit with different approaches. Ondo's focus on creating institutional-grade tokenized products complements MANTRA's efforts to build a comprehensive blockchain infrastructure for RWAs. As the sector continues to evolve, both projects are likely to play significant roles in shaping the future of tokenized real-world assets.
Investors interested in the RWA space might consider both tokens as part of a diversified portfolio, recognizing that they represent different aspects and approaches within the broader RWA ecosystem.
Challenges and Opportunities
Challenges:
While MANTRA's vision is ambitious, it faces several challenges.
Unclear Value Accrual Mechanism: The pathway for value to accrue to the MANTRA token is not yet clearly defined. This lack of clarity could deter potential investors who seek a clear understanding of token economics. The recent doubling of the token supply cap may raise concerns among investors about potential dilution. MANTRA Chain needs to better articulate how token holders will benefit from the growth of its ecosystem.
Development Complexity: Developing a custom blockchain is significantly more complex than building a protocol that can exist on multiple chains. This approach requires more resources and will slow down time-to-market. It also requires a strong focus in attracting developers to build on the platform, or else it can turn into another ghost chain. Additionally, while building on Cosmos provides interoperability with other Cosmos chains, MANTRA needs to develop and maintain bridges and protocols for cross-chain asset transfers with chains that are not IBC-compatible.
Market Education: There's a significant need to educate potential users and institutions about the benefits of both RWA tokenization and MANTRA Chain. This education process can be time-consuming and costly, potentially slowing adoption rates. MANTRA Chain must effectively communicate the advantages of its platform over traditional financial systems as well as other RWA protocols that exist on more easily accessible and popular chains.
Competitive Landscape: The RWA tokenization market is becoming increasingly crowded with both blockchain-native and traditional finance entrants. MANTRA Chain needs to clearly differentiate its offering and demonstrate unique value propositions. As MANTRA chain is looking to implement universal KYC for all users, it could pose a barrier to entry for some cryptocurrency users accustomed to pseudonymous transactions, resulting in privacy concerns and a competitive disadvantage.
Opportunities
However, these challenges also present opportunities.
First-Mover Advantage in Compliance and KYC: By prioritizing regulatory compliance, MANTRA Chain could position itself as the go-to platform for institutional RWA tokenization. If all users have to be KYCed, a fully KYC'ed user base could enable MANTRA to offer services that other chains cannot, particularly in areas where regulatory compliance is crucial, and could lead to partnerships with major financial institutions seeking compliant blockchain solutions.
Trusted Environment for RWA Transactions: A fully KYC'ed ecosystem could create a more trusted environment for RWA transactions, potentially reducing fraud and improving the overall security of the platform. This could be particularly attractive for high-value RWA transactions where counterparty risk is a significant concern.
Alignment with Global Regulatory Trends: As global regulations around cryptocurrency and blockchain technology trend towards greater KYC and AML requirements, MANTRA's approach could position it ahead of the curve. This alignment could make it easier for MANTRA to enter new markets and form partnerships with traditional financial institutions.
Emerging Market Expansion: MANTRA's focus on Asia and the Middle East could tap into rapidly growing, underserved markets in terms of banking and finance. These regions often have less entrenched financial systems, potentially making them more open to innovative solutions.
Future Outlook of MANTRA Chain and RWA
With its recent funding and clear strategic focus, MANTRA is well-positioned to play a significant role in the growing RWA tokenization sector. The success of its upcoming Hongbai Incentivized Testnet and its ability to attract institutional partners will be key indicators of MANTRA's potential to realize its ambitious vision.
The RWA tokenization market, projected to reach a staggering $16 trillion by 2030, promises to reshape the very fabric of global finance. In this context, MANTRA's emphasis on regulatory compliance, developer empowerment, and global expansion, particularly in emerging markets, could set it apart in an increasingly competitive landscape. The potential pioneering of a fully KYC'ed blockchain could unlock doors to institutional capital that have remained firmly shut to many blockchain projects.
However, the path ahead is not without challenges. MANTRA, like all players in this space, must navigate a complex regulatory landscape, overcome technical hurdles, and earn the trust of both institutional players and retail users. It faces stiff competition from other well-funded L1 chains also vying for dominance in the RWA space.
Moreover, the recent decision to double the token supply has raised concerns among investors, potentially impacting MANTRA's ability to attract and retain capital. Its long-term success will hinge on its ability to execute its vision effectively, balancing innovation with compliance, technical excellence with user accessibility, and token economics with investor confidence.
As we look to the future, the implications of successful RWA tokenization extend far beyond market capitalization figures, potentially transforming everyday lives. Imagine a world where a young professional can invest in a fraction of a prime real estate property, earning rental income that was once reserved for wealthy landlords, or a small business owner accessing working capital by tokenizing their inventory, bypassing traditional bank loans, or easily rebalance their portfolio across global assets with the click of a button.
These scenarios illustrate a future where financial inclusion becomes a reality, market efficiency reaches new heights, and innovation flourishes in ways we're only beginning to imagine. Whether MANTRA will emerge as a leader in bringing this new paradigm to life remains to be seen, but one thing is certain – the future of finance is being written today, and it's a future full of promise and potential for individuals across the globe.
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