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Exploring the RWA Tokenization Opportunity

What is RWA Tokenization?

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Market Opportunity | What is RWA Tokenization? | Why Do We Need It? | From ACATS to RWA Tokens | What Can Be Tokenized? | Latest Developments in RWA

What is RWA Tokenization and How Does It Work?

RWA tokenization is the process of creating a digital representation of real-world assets on the blockchain.

An issuer would acquire real-world assets, hold it in a holding company, and create tokens that are linked to the aforementioned real-world assets. Every token is backed by and pegged to the value of the underlying real-world asset.

In short, RWA Tokens are crypto backed by real-world assets. With RWA Tokens, investors can:

  • Take a stake in exclusive asset classes such as private equity and venture capital
  • Buy anytime, anywhere
  • Get started with low minimums
  • Sell to realize profits or hold till Liquidity Event

Mercury RWA Token ($MER)

For instance, take Borderless.Fi's Mercury RWA Token ($MER). We took a stake in a company called Mercury Technologies, Inc., a fast growing fintech startup based in San Franciso. We held it in a special-purpose vehicle, and created a token called $MER that is linked to the stake in Mercury Technologies, Inc.

In short, $MER is a tokenized representation of preferred stock in Mercury Technologies, Inc. When you purchase a token of $MER, you hold a unit of the underlying real-world asset – in this case, preferred stock in Mercury Technologies. Inc.

Investors can buy $MER on a decentralized exchange anytime and anywhere. You do not need a broker; all you need is access to the internet, a wallet and USDT. $MER can be sold anytime too. Unlike traditional private assets that do not have a secondary market, investors can sell $MER on automated market makers that offer instant liquidity at <1% fees.

Lastly, $MER operates on a fractionalization ratio of 1:10,000, where each token represents a fraction of the underlying real-world asset. In this case, when you hold one token of $MER, you hold 1/10,000th of the preferred share of Mercury Technologies, Inc.