TL;DR:
In December 2021, Aave protocol and Centrifuge launched the Real World Asset (RWA) Market, a platform that connects DeFi to real-world assets, allowing Aave depositors to earn yield and Centrifuge issuers to borrow from Aave. Despite market instability, the protocols performed as expected with no losses, and the next phase is Centrifuge's proposal for an RWA Facilitator for GHO, based on lessons learned from integrating RWAs into on-chain and DeFi markets.
In December 2021, the Aave protocol and Centrifuge launched the Real World Asset (RWA) Market, a pioneering platform that bridges DeFi to real world assets. This market allows Aave depositors to earn yield against stable, uncorrelated real world collateral, while Centrifuge issuers can borrow from Aave as an alternative liquidity source1.
The Aave Protocol enables the creation of markets where tokens can be borrowed against deposited collateral. Issuers create asset pools, and investors purchase tokens from these pools by depositing stablecoins. The issuers can then borrow stablecoins against these assets, converting them into fiat currency for real world borrowers1.
Despite initial growth to 19m and subsequent market instability reducing the market to around 8m, the Aave and Centrifuge protocols performed as expected, with no losses or lost capital1. The next phase of collaboration is Centrifuge’s proposal for an RWA Facilitator for GHO, a development informed by the experiences and lessons learned from integrating RWAs into on-chain and DeFi markets1.
Posted a year ago
Last reply a year ago
Summary updated 2 months ago
Last updated 06/12 00:43