BI 006 Real World Assets, Onchain
Problem Statement
- The idea is to tokenize and bring real-world assets such as stocks, bonds, or other traditional financial instruments onto The blockchain. by leveraging Account Abstraction, The goal is to provide a simplified user experience (UX) that enables mass adoption.
- The current process of trading and investing in real-world assets involves various intermediaries, complex procedures, and geographic restrictions. this creates barriers for individuals who want to participate in The global financial markets.
- By bringing RWAs on-Chain, The aim is to eliminate These barriers, increase accessibility, and provide a simplified user experience for trading and investing in traditional financial instruments. this opens up new opportunities for global participation, democratizes access to financial assets, and enhances The efficiency of transactions.
Potential solution
- Asset Tokenization: real-world assets such as stocks, bonds, or other financial instruments are tokenized and represented on The blockchain. this process involves converting The ownership rights and characteristics of The assets into digital tokens that can be securely stored and transferred.
- Account Abstraction: Account Abstraction is utilized to simplify The user experience and eliminate gas fees and The need for seed phrases. this ensures a frictionless and intuitive trading experience for users, making it easier for them to participate in The market without technical complexities.
- Trading platform: a user-friendly trading platform is developed to facilitate The buying and selling of tokenized RWAs. The platform provides intuitive interfaces, order books, market data, and tools for users to trade and manage their investments.
- Regulatory Compliance: Compliance with Regulatory frameworks and securities laws is crucial when dealing with tokenized RWAs. The solution should incorporate necessary Compliance measures, such as Know your Customer (KYC) and Anti-Money Laundering (AML) procedures, to ensure legal and Regulatory requirements are met.
Challenges you may have to overcome
- Incorporating real-world assets into a crypto ecosystem involves navigating complex Regulatory frameworks. ensuring Compliance with financial regulations, securities laws, and Know your Customer (KYC) requirements can be challenging and requires collaboration with legal experts.
- Tokenizing real-world assets requires Establishing legal structures, such as special purpose vehicles (SPVs) or Asset-backed tokens, to represent ownership.
- Determining The value of real-world assets accurately and Establishing a liquid market for trading those assets within The crypto ecosystem can be challenging.
Business model
- Transaction Fees: Charging transaction fees for trades executed on the platform.- Subscription Model: Offering premium features, advanced trading tools, or enhanced market data through a subscription plan.
- Market Making: Engaging in market-making activities to provide liquidity and earn spreads on trades.
- Custodial Services: Providing secure custody services for users' tokenized RWAs, charging fees for custody and management.
Market Opportunity
The Total Addressable Market (TAM) for a Real World Asset (RWA) protocol can be significant, as it encompasses the value of all real-world assets that can potentially be tokenized and brought onto the blockchain. Estimating the exact TAM is challenging, as it depends on various factors such as the types of assets targeted, the geographical scope, and market adoption.
- The GTM strategy could involve partnering with established financial institutions, brokerage firms, or asset management companies to leverage their expertise, regulatory compliance capabilities, and customer base.
FAQs
Polygon zkEVM is the leading zero knowledge scaling solution that’s equivalent with the Ethereum Virtual Machine, this means that most of the existing smart contracts, developer tools, and wallets work seamlessly.
Polygon zkEVM harnesses the power of ZK proofs to reduce transaction cost and increase throughput, all while inheriting the security of Ethereum L1.
1- Ethereum-equivalence: Most Ethereum smart contracts, wallets, tools, etc. work on Polygon zkEVM seamlessly.
2- Inherits Ethereum security
3- Lower cost compared to L1 and better finality than other L2 solutions like Optimistic Rollups
4- ZKP-powered scalability, and aiming at similar throughput to PoS
Many people in crypto believed that a zkEVM was years away, and might never be practical or competitive with other ZK L2s. This was framed as an unavoidable tradeoff: we could have either full EVM equivalence or high performance, but not both. However, with the proving system breakthroughs pioneered by Polygon Labs, we belieive we can achieve full EVM equivalence while offering better performance (higher throughput, lower latency, and lower cost) than alt-L1s, optimistic rollups and other ZK rollups.
EVM-equivalent: Ethereum isn’t just a blockchain. It’s a rich ecosystem of smart contracts, developer tools, infrastructure, and wallets. It’s a vibrant community of developers, auditors, and users. The best way to scale Ethereum is to strive to maintain equivalence with this ecosystem, and the Polygon zkEVM will give users and developers an almost identical experience to Ethereum L1 -- just with a significant scalability improvement.
The ultimate goal is not compatibility. The ultimate goal is equivalence. Solutions that are compatible enable most of existing apps to work, but sometimes with code changes. Additionally, compatibility may lead to the breaking of developer tooling. Polygon zkEVM strives for EVM Equivalence, because it means that most applications, tools and infrastructure built on Ethereum can immediately port over to Polygon zkEVM with limited to no changes needed. Things are designed to work 100% on day one. This is important, because ideally:
1. Development teams don't have to make changes to their code, which could introduce a security vulnerability
2. Since no code changes are needed, you dont need additional audits, which saves teams money
3. The experience for a developer is much better. Since he/she is not rewriting the application, valuable time is saved.
4. The solution ultimately benefits from the security and decentralization of Ethereum, since transactions are still finalising on Ethereum
5. Allows Polygon zkEVM to benefit from the already vibrant and active Ethereum community
6. Allows for significant and quick dApp adoption, since apps built on Ethereum today are designed to be compatible.
SELFDESTRUCT: removed by SENDALL
EXTCODEHASH: returns hash contract bytecode from Polygon zkEVM state tree (do not check if the account is empty)
DIFFICULTY: returns 0
BLOCKCHASH: returns all previous block hashes (not just the last 256 blocks)
BLOCKCHASH is the state root at the end of a processable transaction and it is stored on the system smart contract
NUMBER: number of processable transactions
zkEVM supports all opcodes but SHA256, BLAKE and PAIRINGS.
ecRecover and identity are presently supported. Others return a revert.
At the moment, the answer is No. Aspirationally, the goal in the future is to build one of many chains that allow for users' assets to move from layer 2 (L2) to layer 2. With that being said, users will not be able to utilize this functionality at launch, but L2 to L2 movement is something road mapped for the future.