Why Are Crypto Investors Excited About "RWAs"? Analyzing Maker and Frax
Are RWAs the next iteration of DeFi?
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Real world assets (RWAs) have been a hot topic of late, and was one of the main points of discussion at Token 2049.
Both Maker and Frax have been exploring and utilizing RWAs in the form of cash-equivalent assets as collateral for DAI and FRAX. While Maker has amassed approximately $3.5 billion in RWA collateral, Frax recently entered the fray with the establishment of FinresPBC and the introduction of sFRAX. This move to RWA-backed collateral seems to be a growing trend amongst stablecoin protocols that aim to offer a more diversified, less volatile asset base while channeling yield from yield-bearing assets like U.S. Treasury bills back to end-users.
Is this pivot a forward-thinking move towards DeFi's future, or a tactical maneuver to solidify their foothold in a fiercely competitive landscape? Is this the key to making Maker and Frax even more sustainable businesses moving forward?
In this week’s report, we will dissect this and more as we dive deeper into Maker and Frax.