How does CESS promote the development of RWA through infrastructure efforts?
The multi-layer network architecture of CESS and the innovation of DeOSS facilitate the large-scale application of RWA.On November 30, 2023, the Web3 Foundation announced an investment of $1 million in Real World Assets (RWA) through Centrifuge. The Web3 Foundation aims to promote the development of a user-friendly, decentralized internet by supporting projects focused on privacy, security, and user control. The collaboration between the Web3 Foundation and Centrifuge will help bridge the gap between traditional finance and the emerging decentralized finance space, facilitating the on-chain development of real-world assets. It is evident that RWA tokenization has become a hot topic and a new focal point for capital inflow recently.
As a deep partner in the Polkadot ecosystem, CESS adopts a multi-layer network architecture to support the on-chain storage of resources, providing a usable storage infrastructure for RWA on-chain/tokenization. This article will focus on the development and realization of RWA, introducing how CESS acts as a decentralized storage and CDN infrastructure to facilitate the widespread adoption of RWA.
Definition and Development Potential of RWA
RWA: Real World Assets can be broadly categorized into tangible assets, functional assets, and financial assets, such as real estate, art collectibles, intellectual property, mineral rights and extraction rights, carbon credits, franchises, stock options and futures, corporate and government bonds, funds, and index funds. RWA on-chain/digitalization/tokenization refers to the process of converting real-world assets into digital tokens through blockchain technology. The core of this concept is to represent valuable assets from the real world in digital form, making it easier to trace, verify, establish rights, trade, and circulate on the blockchain. This new form can enhance asset credibility in traditional industries, gain more liquidity, accelerate financial technology innovation in traditional finance, and provide social groups with higher low-risk returns and new opportunities for value acquisition, promoting more traditional sectors to enter the Web3 world.
RWA allows for the storage and transfer of assets without a central intermediary, with value mapped to the blockchain for trading and circulation; at the same time, real-world assets (RWA) existing off-chain can be brought on-chain through tokenization (Tokenization or NFT), serving as an important source of real yield for the crypto market's U-based assets. The emergence of RWA not only opens a pathway for traditional assets to enter the digital world, but also provides asset owners with more diverse investment and management options.
- Current Development Status of RWA
Looking back at the development of RWA, the attention it has received was already foreshadowed. As early as the beginning of 2023, traditional financial institutions and crypto-native organizations began to lay out their strategies in the RWA space. At the start of the year, Goldman Sachs announced the launch of its digital asset platform GS DAP; in April, Binance announced it would become a node operator for the Layer 1 blockchain Polymesh; DeFi protocols such as MakerDAO, Aave, and Maple Finance have been exceptionally active in the RWA field, making RWA a favored track for capital this year.
RWA better bridges traditional finance and crypto finance, with numerous RWA projects gradually emerging. HTX Research published a report on RWA this year (Research Collection --- Tokenization of RWA: The Next Fortune Machine or Not?), which pointed out that the main trends in current RWA projects are DeFi-centric, high-risk, and high-reward, while also facing limitations such as low liquidity, incomplete price discovery, and being mostly in early stages. Citibank's RWA report, "Money, Tokens, and Games," also indicated that the market size for RWA tokenization is expected to reach $10 trillion in 2023.
Whether RWA can become the next explosive growth area depends on the development of infrastructure and the degree of regulatory improvement in the coming years. So what kind of infrastructure will truly be suitable for RWA, meeting the prerequisites and demands for large-scale development? Let's see how CESS supports and realizes the data on-chain and data storage needs in the RWA tokenization process through innovative technology.
- Implementation Process of RWA
Binance Research also published a report on RWA in September this year (Real World Assets: The Bridge Between TradFi and DeFi), detailing the working principles and implementation processes of RWA. The implementation process of RWA is divided into three stages: (1) Off-chain packaging; (2) Information bridging/data on-chain; (3) RWA protocol demand and supply.
First, assets need to be formalized off-chain, clarifying their value, ownership, and related legal protections. This step involves representing the economic value of the asset, the legality of ownership, and legal support. Then, through information bridging (Information Bridging), i.e., data on-chain, the economic value and ownership information related to the asset are transferred to the blockchain, stored in the distributed ledger of the blockchain, ensuring transparency of asset value and ownership. For assets that require regulation or are considered securities, regulatory technology/securitization applications are also involved. Finally, DeFi protocols drive the entire process on both the supply and demand sides, being responsible for the initiation of RWA and serving as the market for the final RWA products.
How CESS Promotes RWA Development
After understanding the workflow of RWA, we can appreciate the importance of improving industry infrastructure for its realization. CESS, as a blockchain-based decentralized cloud storage network and CDN network, fully leverages its infrastructure to provide a powerful platform for comprehensively supporting RWA (Real World Assets).
- CESS: Supporting RWA Data On-Chain, Establishing Data Ownership and Data Value
For the process of data on-chain, a stable, reliable, and secure decentralized storage solution is essential. As a blockchain project focused on decentralized storage, CESS (Cumulus Encrypted Storage System) is at the forefront in this field. CESS provides a full-stack solution for the storage and retrieval of high-frequency dynamic data in Web3, while supporting online data storage and real-time sharing. As a Layer 1 blockchain built on the DePIN (Decentralized Physical Infrastructure Network) concept, CESS features decentralization, efficiency, secure privacy protection, and scalability, providing a compatible public chain infrastructure for RWA, ensuring the establishment of ownership and value circulation after data is on-chain.
Under the Multi-Type Data Rights Confirmation Mechanism (MDRC), CESS ensures data ownership, returning data ownership to each owner. MDRC supports the creation of multi-type data proof of rights, protecting the ownership of data assets at their source; in the commercial platforms for storage, sharing, trading, transmission, preservation, and use, copyright confirmation and timestamp generation during the trading process are completed transparently on the CESS chain. Mastering the CESS private key grants the rights to share, allocate, and trade data assets. Therefore, CESS plays a key role in promoting the trading and circulation of RWA on the blockchain, enabling various physical assets to circulate and trade securely and efficiently in the digital world, perfectly matching the needs for establishing on-chain data ownership and data value circulation/sharing in the RWA implementation process.
More importantly, CESS achieves data value realization and free circulation/sharing of data value. It protects user data privacy and returns data sovereignty through a trustless approach. In the RWA field, CESS's technological innovations not only enhance the digital representation of assets but also provide asset owners with unprecedented avenues for value realization, adding strong momentum to the diversified development of the Web3 world. Through CESS's storage solutions, the application and popularization of RWA in the Web3 field will be further strengthened and developed.
- CESS: Supporting Large-Scale Application of RWA, Innovations in Multi-Layer Network Architecture and DeOSS
Improving infrastructure to promote the realization of RWA is just the first step; how to facilitate the widespread adoption of RWA is the key issue that follows. On the road to supporting the large-scale realization and application of RWA, CESS's multi-layer network architecture and DeOSS (Decentralized Object Storage Service) technology will continue to make strides. These innovative technologies not only demonstrate CESS's strong capabilities in on-chain storage resource management but also prove its leading position in the field of large-scale commercial storage.
- Multi-Layer Network Architecture: On-Chain Storage Resources
The multi-layer network architecture adopted by CESS allows it to efficiently manage storage resources. In this architecture, storage resources are put on-chain, allowing for dynamic allocation and optimization on a global scale. This flexibility and scalability mean that CESS can quickly adjust resource allocation based on demand, thereby meeting the growing storage needs of RWA in the Web3 environment.
- DeOSS: Achieving Large-Scale Commercial Storage and Data Privacy Protection/Management in Web3
CESS's DeOSS technology is at the core of its storage capabilities. DeOSS provides a powerful decentralized storage solution for RWA through efficient data storage, privacy protection, and real-time sharing mechanisms. This technology supports large-scale data processing, ensures data security, and guarantees high-speed access.
At the same time, DeOSS empowers users with data privacy protection and permission management, allowing users to permit or restrict access to their data by different entities and to delete or clear data from the internet in any manner at any time. Users can decide whether to make their data public, private, or partially private.
Conclusion
The reason RWA attracts so much attention is its significant implications for the development of the Web3 ecosystem. First, it provides a bridge connecting the Web3 ecosystem with the real world. By bringing real-world assets onto the blockchain, RWA enhances the practicality and accessibility of Web3, moving beyond mere transactions of virtual assets and digital currencies. Second, RWA injects new vitality into decentralized finance (DeFi), offering new asset classes and investment opportunities, thereby expanding the appeal and market potential of DeFi, attracting more capital inflow, and creating more liquidity.
Web3 aims to establish a decentralized, fairer, and more transparent digital economic ecosystem. To achieve this vision, combining real-world assets with blockchain technology can not only increase the stability of the Web3 ecosystem but also attract more traditional investors to participate, promoting the maturity and growth of the entire ecosystem. CESS, through its multi-layer network architecture and DeOSS technology, supports the on-chain data, establishment of data ownership, and large-scale storage of RWA. As RWA continues to mature in the Web3 ecosystem, CESS will continue to play its important role in ushering in a more interconnected, efficient, and decentralized digital economic era. CESS looks forward to more RWA projects benefiting from CESS's storage technology and services, thereby building a richer, more vibrant, and decentralized Web3 era.
Reference
Research Collection --- Tokenization of RWA: The Next Fortune Machine or Not?
Binance Research: Examining the State of Real-World Assets | Binance Blog
RWA Tokenization Report --- Digital Asset Research
Web3 Foundation To Invest In Real World Assets Through Centrifuge
