Real world Assets on the BlockChain | Get Real world Assets on the BlockChain - Assignment

DeFi 201
#81

I believe there should be somehow a way to make governments/regulators incentivized not to do KYC by realizing that KYC measures are ineffective and waste resources.

Maybe zero-knowledge proofs would be a compromise solution for this: governments will get the information they need to protect users while users retain their privacy.

I would like to believe that governments will realize how great invention NFTs are and not to kill the technology with stupid regulations, a bit like what happened with the internet. Governments had an incentive to benefit from the internet, not blanket ban it. Don’t kill the goose that lays the golden egg.

#82

Attached is a hard asset that I bought. I think that protocol should not have to include KYC automatically, eventually exchanges will be less regulated and KYC will not be neccessary.
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#83

A bridge between bond and crypto

https://bondappetit.io/

Seems like a good example of a bridge between Cefi and Defi

#84

@Samuel1 just read your Bio on alternative medicine. sounds very interesting. when Do you intend to go public on the project.

#85

We are currently working on constructing the whitepaper.

#86

Hi Amadeo

This has been a very interesting section of the course and clearly the possibilities are enormous for tokenizing real world assets and bringing them into DeFi. A relatively new protocol which aims to bring real world assets to the blockchain is AllianceBlock:

https://allianceblock.io/

This is a blockchain-based platform that wants to produce the world’s first globally compliant decentralized capital market, by providing a regulated bridge between the worlds of decentralized finance and traditional centralized finance.

AllianceBlock is looking to produce an ecosystem that allows traditional firms and investors to easily gain access to structured digital assets and crypto products. They also intend to allow firms to easily launch their own regulation-compliant crypto derivative products on the blockchain, including physical property, security tokens, crypto portfolios, and more.

This is to be achieved by leveraging a three-layer blockchain protocol, which is comprised of a cross-border regulatory & compliance layer, data governance and privacy layer, and a transactions & workflow layer. This is intended to remove the intermediaries involved in settling transactions and make capital markets safer, more transparent, and more accessible to everyone.

In order to make money markets more accessible, digital asset investors will be able to gain access to tokenized physical assets (digital securities), while traditional investors will be able to access regulated digital asset markets, while benefiting from AllianceBlock’s familiar issuance, validation, and clearance processes.

The protocol consists of several modules, including a trustless KYC/AML and Identity verification module. Users complete KYC only once, with KYC stored in the system and anonymously used for future transactions.

I think it is difficult at the moment to imagine DeFi bridging to the CeFi world without some form of KYC, although hopefully we will get there at some stage. In the meantime this seems to be an interesting approach which hopefully will satisfy regulators without the need to embed KYC into tokens.

#87

I think we should push hard for non-KYC solutions. Decentralization means having an ecosystem that works by itself.

Regarding real-world tokenized assets… One possible way to enforce trust without legal compliance would be to associate a “credibility score” with an address minting assets. The more assets are minted, the more credibility this address has. At some point, the credibility could mathematically be more valuable than the benefits of scamming token holders. Maybe this credibility could be a token by itself.

This is just an improvised proposition. Maybe it could not be implemented. But what matters is the mindset, the “quest” for end-to-end decentralized solutions.

#88

I concur regarding your view on striving towards solutions that do not require KYC/AML measures. But, if DeFi and Blockchain technologies will create an entirely new paradigm and completely revolutionize the digital and financial space, then we have to expect that KYC and AML measures need to be made.

#89

This is a very good point. However. I think Centrifuge handles all the company’s due diligence before approving them in regards to the enron-style failures. Can you confirm this Amadeo?

#90

yesterday I saw an article about a rumor that Cardano was going to imbed KYC/AML in its token. But Charles Hoskinson denied it pretty quickly. Identity in the blockchain is an area that needs more development in this new technology. Can real assets be transacted in the blockchain in a trustless manner?
I’m going to try to find a good NFT to flip on Opensea. Wish me good luck!

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#91

I purchased a share of a property on RealT using ETH.
The process involved setting up an account, submitting a KYC, linking my Metamask Wallet to my account for payment, delivery of the token (which may take some time) and also to receive rents . The process was pretty straightforward and a good experience. I think my ETH gas costs will be more than my rents to claim them but a good exercise to get started.
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#92

I am struggling with the first initial step the trust factor that the asset exist. and asset selection that is worth tokenizing and who best to request valuation…you need an auditing or accounting firm. I learned from Centrifuge they have a process of onboarding originators they need to be vetted by the maker community. There is a biased risk in my view. In this case KYC of the originator is known with the Maker Community organization. What happens when there is a change in RWA after it is tokenized? Who is responsible for validating and delivering the information about the change?

I came across a good process description on medium. Also describing the validation process. The what, the how and the why regarding tokenizing RWA.

https://link.medium.com/dPLPFt4DKlb

KYC. The original owner of real estate has to pay tax in my country for his asset, if the asset transfers through smart contracts to a new owner the new KYC should be known too. I don’t see a quick solution for that.

#93

I’ve been looking at Encode graphics who mix comics with NFT technology. As of now all of it is digital, but they’re planning to encorporate physical goods too.

I think mixing NFT technologie with collectibles would be an interesting idea. It’s no different than art pieces being introduced into crypto, especially if you look how much the older commic books cost. If I remember correctly the commic book first staring batman costs about a million and there are more expensive ones. Same goes with rare cards i.e. black lotus from mtg going for 10-20k.

#94

For people to trust and invest into blockchain and defi, I think there needs to come up brands for protocols that people get fast, that they know it is secure and reliable, and that they see they will get what they pay for with their crypto in the real world. Not talking about the big industry names in all the different market sectors but specially defi solutions that are simply servicing the people better than traditionals.

Probably it will come from the gaming industry since gaming takes over more and more real time of the people everywhere and connects them and lets them use the same games and from there dive deeper into the possibilities of blockchain in other industries to bring it to the people with names they are already familiar with. So a gaming company can team up with other developers to bring new services to people that will have reach and trust faster.

#95

MetaHero could make things interesting as they have partnered with Sony and use a number of cameras to import people or items into an NFT. Something like this could really improve the ability to put real world assets on the blockchain in some way. If not only to bring more real life into the metaverse, it could offer up ways to showcase RWA for purchase. Interesting to think about…

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#96

spend my own money?! no way!

i agree with you on crypto privacy (which is why it’s hard for me to get crypto to spend), but off-chain assets necessarily require some degree of trust, and in this case, we’re trusting a group like centrifuge to properly vet and rate the credit/default (and other) risks of the invoices (etc) they put on chain.

i think this essentially reduces to an expertise issue; if i don’t know how to rate them (or subtleties in different rating methods for which the data available will be useful but only for experts, and not I) or how to use the available data to rate them better than my competitors, then this reduces to putting banks on the blockchain. i disagree that this would be in our best interest as far as decentralizing influence and regulatory threats… at least for the moment, but it’s hard to imagine at what point in the future i’ll want to trust big banks!

these days it seems like everybody and their mother is bringing NFTs to the blockchain, whether or not they represent real-world assets… particularly trading cards are funny ones for me because i used to collect them, but now i’ve seen very expensive cards online for trade. e.g. https://www.leaftradingcards.com/nft

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#97

  • An interesting new protocol I found bridging defi with the value of real world assets is Convergence, or ConvO. The goal of the Convergence protocol, similar to Centrifuge, onboards real world assets by allowing prospects to tokenize and fractionalize these assets into Wrapped Security Tokens. The process of transitioning these assets is powered through the smart contract infrastructure on Ethereum. These WST’s then represent the real world assets their backed by on the Convergence marketplace, and users are able to access even more features with WST, such as AMM Convergence liquidity pools (ConvPools) and compatibility tools to use other chains (Binance, Moonbeam, etc.). I connected my Metamask wallet to get a feel for the overall setup of the marketplace and I found it very interesting.

  • I agree with your opinion to a degree. Even though I don’t believe there should be a definitive whitelist regarding RWA and their functionality in the blockchain world, I do believe some sort of minor verification process should take place when a prospect is putting up their asset for collateral. I understand giving an equal opportunity to everyone who is eager to interact with this new financial bridge, which is what defi is all about; also, with the newfound growth of the digital age comes a lot of illicit activities and fraud by system exploiters (this is a given). I believe smart contracts tokenizing these assets should continue being developed with at least some form of verification to prevent protocols/pools from being possibly muddied-up. I think the implementation of automated KYC compliance could prove beneficial to all the valid users of defi in knowing their assets being traded and given to a protocol are safe/secure. Some simple compliance could include things like user due diligence processes (e.g. identity verification/name and date of birth) and transaction monitoring. With that being said, KYC automation gives protocols and firms the benefit to address digital AML risks easier while providing a great customer experience.

#98

It’s June 2022; and RWA hasn’t ring the bell to me or find any new adoption or development;
however I have seen something similar with NAOS finance where it allows to borrow by using real world assets https://naos.finance/

the dilemma and big paradigm shift for adoption is to reduce-risk and make borrowers, lenders accountable ; to avoid under or over colateralization and work on some measures to reduce massive liquidations

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#99

Regarding KYC I think this is something which should not be a thing in DeFi as in my opinion this is contradictory to the concept of decentralization. I think that we will find ways to grow this space and make trustless transaction possible even for real world items.

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#100

Ok first of all I healed your Centrifuge slides from a previous user’s damage, and added more speaker’s notes. You should really post those links into Google Slides as view-only. For example my now circularly self-referential Thortspace notes on the topic:

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Second I’m thinking in terms of multiple disruptive technologies used simultaneously. For example I started looking up shape files that can be printed on a 3D printer, and found an architect posting his designs for a VR or real-world build-able custom house…posted as an NFT on OpenSea. All we need now is for an AI to generate these and deliver them by drone.

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I’m…not entirely sure how ownership of this thing is to be enforced as he just posted the blueprints on the page for all to read and/or assemble in VR…or build irl.

No I did not purchase the designs for the current price of $80k USD. But I’ve noticed his asking price is dropping…

And yeah, I noticed the use of ZCash in the Open Money Initiative. Privacy protocols are vastly underrated in a world where nobody minds all their gmail being read by Google. Financial privacy must be one of the pillars the new decentralized economy is built on if we’re to minimize regulatory interference and economic drag. Here’s my sphere of notes on the topic from the course here at the academy. Help yourself to a view and all my links…but it’s not editable :wink:

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