Behind the Scenes with Unlockd: Decoding RWAs

Unlockd
4 min readMay 15, 2024

Real World Assets are exactly what they sound like — assets that you can touch and feel like real estate, luxury goods, collectibles, and other commodities.

RWAs are foundational tools for powering economic growth and building personal wealth. They often serve as a stable investment or hedge against the more volatile stocks in traditional stock markets.

“RWAs, however, are not without their own drawbacks. Liquidity, accessibility, and flexibility problems prevent many retail investors from investing in RWAs.”

— Jorge Schnura, Co-Founder, Unlockd

It’s not easy for people to quickly sell a building or a piece of art for cash, and few can invest in high-value assets because of high entry costs. And once you have an RWA, your options are pretty limited to selling them.

Enter tokenized RWAs!

Tokenized RWAs are where traditional finance meets decentralized finance — assets that are currently capturing the attention of Wall Street names. Hedge fund Blackrock made headlines in March with its first foray into asset tokenization, built on Ethereum. It’s a major step in mainstreaming the tokenization of RWAs.

Unlockd is bringing a much-needed upgrade to the world of finance as the first permissionless liquidity protocol specifically designed for RWAs.

We’ve created a number of services and real-world asset types, making high-value RWAs accessible to a broader audience unlocking new financial opportunities in a market that is projected to reach $16 trillion by 2030. Beyond democratizing RWAs, Unlockd is also blazing new trails in AI-driven finance.

How Unlockd V2 is democratizing RWAs

The RWA game won’t just be limited to professional investors and large funds. Unlockd is democratizing these assets for all types of investors, from tech-savvy to traditional retail investors who may be crypto- and/or RWA-curious.

By integrating advanced artificial intelligence and machine learning, Unlockd transforms both the RWA and crypto landscapes, offering optimal loan-to-value rates and accurate risk assessments that will significantly enhance the accessibility and efficiency of RWA management.

So with Unlockd you don’t need to be a financial expert to evaluate a loan — AI does it for you with fair value assessment

“Our vision at Unlockd is to bridge the gap between traditional finance and blockchain innovation, making RWAs accessible to everyone and enhancing their liquidity. We’re not just participating in the market; we’re building it.”

— Carlos Otermin, Co-Founder, Unlockd

The Unlockd features that simplify real world asset management include:

Earn — With Unlockd V2, your assets generate liquidity overnight through an auto-compounding Peer-to-Pool model. This not only simplifies the investment process but also enhances potential returns exponentially.

Borrow — Need a financial lifeline but don’t want to sell your assets? Simply looking at borrowing against your assets instantly without the hassle and commissions of a bank? Unlockd V2’s RWA-backed loans are instant, open-ended, and leverage your RWAs without forcing you to hand over possession. Using a peer-to-peer lending model, users lend and borrow against a centralized pool, maximizing APY for lenders with exposure to a diverse set of RWAs and instant loans for borrowers.

Loan Lifecycle Management — Unlockd V2 introduces an easy way to manage your investments and loans/debt by allowing you to bundle multiple NFTs as a single collateral, add or remove assets, and maintain their on-chain utility.

Marketplace — Unlockd’s Marketplace feature caters to both auction lovers and instant buyers, offering a range of options like Bid-Now-Pay-Later and immediate purchases at discounted rates.

RWA types supported by Unlockd

Unlockd already supports a number of RWAs. We are also actively working to add several new asset types to the protocol.

Current asset types include:

  • Verified assets in partnership with Unikura
  • Luxury Watches in partnership with Watches.io

Assets that are works in progress:

  • Real Estate
  • Gems & Precious Metals (tokenized Gold, Silver and Diamonds)
  • Luxury Items & Fashion
  • Collectibles
  • Fine Wines

Managing the challenges of RWAs

As with any investment, handling RWAs on a blockchain isn’t without risks. Assessing an asset’s value and managing operational risks are two major challenges.

Risk factors and the Loan-to-Value (LTV) ratio (Gold / NFTs / Watches, etc.) vary across RWA asset types , typically with more value assigned to stronger assets. The LTV ratio defines the maximum amount of currency that can be borrowed with a specific collateral. It’s expressed as a percentage: at LTV=30%, for every 1 ETH worth of NFT collateral, borrowers will be able to borrow 0.30 ETH worth of the corresponding currency.

Unlockd overcomes these challenges with rigorous RWA audits and risk assessments. Each RWA transaction is secure and every asset’s value is accurately represented and with our AI-Risk framework leveraging real-time date, Unlockd is able to provide the best loan-to-value rations for lenders & borrowers.

Enter the RWA game with Unlockd

Curious to learn more or ready to dive in?

Head over to our Discord or Unlockd website and start putting your RWAs to work with Unlockd.

Whether you’re looking to invest, borrow, or simply explore, we’ve got the tools to support your next financial journey.

Discover how easy and rewarding managing RWAs can be with Unlockd, as we pave the way for RWA adoption!

Follow Unlockd on X and join our community in Discord.

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Unlockd

The only permissionless protocol for Real World Assets liquidity. Fair and secure instant loans, powered by AI.