🗺️Market Overview

Addressing the Challenges and Transformative Opportunities in Real World Assets Investment

Investing in Real World Assets (RWA) has always been a reliable way to preserve and grow wealth. Whether it's real estate, commodities, or business ventures, these assets offer tangible value. However, traditional investment methods come with significant challenges that keep many potential investors on the sidelines. Let's dive into these challenges and explore how blockchain technology is transforming the landscape.

The Hurdles of Real World Asset Investments

High Entry Barriers: Getting into the RWA market usually requires a hefty initial investment. Whether you're looking at real estate or company bonds, the financial commitment can be daunting. According to PricewaterhouseCoopers, over 83% of people who don't invest in real estate cite a lack of funds as the main obstacle (PwC, 2022).

Limited Liquidity: RWAs are notoriously illiquid. Unlike stocks or bonds, you can't quickly sell a piece of real estate or a business investment without incurring significant costs and delays. The National Association of Realtors states that even under the best conditions, closing a property sale can take 30 to 45 days (NAR, 2023).

Opacity in Transactions: Investing in RWAs often involves navigating a maze of hidden fees and complex legalities. This lack of transparency can be off-putting, making it difficult to understand the true costs and values involved. It's no wonder many potential investors are hesitant.

The Liquidity Issue

Liquidity is a major concern when it comes to RWAs. Converting these assets into cash quickly and without a significant loss in value is nearly impossible. Procedural delays, market dependencies, and high transaction costs only make things worse. The McKinsey Global Institute has highlighted that RWAs are among the least liquid asset classes because of their physical and regulatory complexities (McKinsey, 2022).

Lack of Transparency and Centralization

The traditional RWA market is often opaque, with critical information hidden from investors. This problem is compounded by the centralized nature of transactions, controlled by brokers, legal teams, and banks. These intermediaries not only slow down the process but also add layers of bureaucracy and cost, which can eat into investor returns.

Enter Blockchain: A Game Changer for RWAs

Blockchain technology is poised to address many of these challenges, offering a fresh, more efficient approach to investing in RWAs.

Decentralized Transactions: By using a decentralized ledger, blockchain eliminates the need for middlemen, speeding up transactions and reducing costs.

Greater Transparency: Blockchain's transparency ensures that all parties have access to the same information, reducing the opacity that currently plagues the market.

Tokenization of Assets: Blockchain allows for the tokenization of RWAs, breaking them down into smaller, more affordable units. This not only enhances liquidity but also democratizes access, enabling more people to invest. According to the World Economic Forum, by 2025, 10% of the global GDP will be stored on blockchain, with a significant portion likely represented by tokenized assets, including RWAs (WEF, 2021).

Looking Ahead

The integration of blockchain into RWA investment offers a promising path to overcome traditional barriers, making the process more accessible, efficient, and transparent. As this technology continues to evolve, it will open up new opportunities for investors worldwide, fundamentally changing how we approach RWA investments.

Sky Hause is committed to being at the forefront of this transformation, exploring new avenues beyond real estate to bring even more value to our investors. Stay tuned for exciting developments as we expand our horizons!