Abstract
The Spaces focused on the importance and challenges of ensuring reliable and standardized data for real-world assets on the blockchain. The panelists discussed integrating various data sources, the need for transparent and immutable data, and potential ways of monetizing data while ensuring accessibility for building secondary markets. It also covered the potential of utilizing AI and IoT to enhance data quality and trust, emphasizing the necessity of timely and trustworthy data for driving liquidity in the real-world asset industry.
Highlights
- Reliable and accurate data are crucial for the liquidity of real-world assets.
- Standardization and normalization of data across asset classes are essential.
- There are significant challenges in integrating various data sources and ensuring their integrity.
- Real-time monitoring and handling of data influence secondary market operations and appraisals.
- Leveraging AI and IoT provides potential improvements in data quality and trustworthiness.
Outlines
- 05:21 – Introduction to the series and today’s topic about real-world assets.
- 06:31 – Tyler Sherman’s introduction and insights into RWA World.
- 08:06 – Sharif from Defactor discusses the RWA toolkit.
- 09:49 – Otter from Unlock highlights their mission and achievements.
- 10:11 – Makram from Blocksquare explains their work in tokenizing real estate.
- 11:47 – Ashish from Polytrade’s thoughts on RWAs in the Web3 journey.
- 14:23 – First round of discussion on data adequacy and its importance.
- 21:24 – Otter from Unlock details the challenges with real-time appraisal data.
- 26:04 – Tyler and Ray from RWA World discuss data trust and quality.
- 32:13 – Discussions on government adoption and legal structures for on-chain data.
- 40:29 – Ashish’s perspective on interoperability and data standardization.
- 45:57 – Tyler’s thoughts on necessary and sufficient data to put on-chain.
- 50:13 – Sharif’s mention of standardization for outputs in token standards.
- 58:15 – Closing notes and information from all panelists.
Discussing Real World Asset (RWA) Data and Tokenization
Introduction
In this episode of the RWA series, the panelists discussed the significance and challenges associated with incorporating real-world data on-chain and its impact on tokenization. This conversation brought together key industry figures from RWA World, Blocksquare, Defactor, and others.
Importance and Challenges of On-Chain Data
Key Issues
The panelists emphasized the importance of data accuracy and reliability, highlighting how critical reliable data is for driving liquidity in the real-world assets market. Key challenges include:
- Integrating various data sources with different standards.
- Ensuring data trustworthiness and integrity.
- Managing data pertaining to asset quality.
Handling Real World Data
Sharif from Defactor illustrated a practical example with a gold lending protocol, emphasizing the need for real-time price feeds and other critical data inputs for managing RW assets. He highlighted the complexity of integrating multiple jurisdictions and assets while ensuring consistent data quality. Otter from Unlock emphasized the necessity of timely and trustworthy data, particularly for appraisals, loan management, and liquidations. He pointed out the difficulties in maintaining high data frequency and reliability, underscoring the importance of having real-time monitoring systems.
Data Standardization and Marketplace
Panelists agreed on the need for data standardization and normalization across different RW asset classes, with suggestions for establishing industry standards to increase adoption. Makram from Blocksquare proposed that standardized evaluation data and transactional history should be immutable and accessible on-chain to provide transparency and enhance investor confidence. Tyler from RWA World discussed developing relationships with authenticators and aggregators to ensure data accuracy. They aim to create a marketplace around high-quality data and incentivize good data practices among tokenizers.
Potential Solutions and Future Visions
Secondary Markets and Data Accessibility
Ashish from Polytrade raised concerns regarding free access to data versus monetization. The panelists discussed a hybrid approach where some data would be freely accessible while value-added services could be monetized. Additionally, the conversation touched on leveraging Artificial Intelligence for better insights and analytics from the aggregated data. This would further enhance trust and efficiency in the RW assets market.
Role of Oracles and Future Technologies
The use of Oracles for real-time and secure data transmission was highlighted as fundamental for the future of RW assets. Integrating IoT and AIoT as tools for data collection and validation was proposed as a forward-looking solution to enhance the richness of data over time.
Summary
The Spaces focused on the importance and challenges of ensuring reliable and standardized data for real-world assets on the blockchain. The panelists discussed integrating various data sources, the need for transparent and immutable data, and potential ways of monetizing data while ensuring accessibility for building secondary markets. The conversation also looked at the potential of AI and IoT to enhance data quality and trust in the RW assets market.
Recap
Milind
03:11 – 03:29
GM, GM. Thank you everyone for joining in. We’re just giving a few speakers and the audience some more time to join. We’ve almost got the full panel here. Just a couple of minutes more, and we’ll get started.
Ray
03:37 – 04:49
Super excited to kick off. Hope everyone’s having a wonderful Friday. I would sing for everybody to give you guys a little bit of music, but I think you’d much prefer the silence. So we’re gonna go with that for sure. Just a couple more moments.
Milind
05:03 – 06:31
Okay, so I think we should probably get started. Ray, I was tempted to put you on the spot and ask you to sing for a second, but I let that one go. Thanks, everyone, for being here. Thanks to all the speakers and the audience. Just to clue you in on the series we’re doing, RW IRL, we want to talk about real-world assets, of course, but specifically the challenges we’re facing and the opportunities we have to truly make this the multi-trillion industry that it should be, which is still in its early days. We do this every Tuesday and Friday at 6 p.m. GST.
We have the wonderful folks from RWA World here to co-host this episode and the next one, where we’ll be specifically talking about data and on-chain data, which is somewhat their specialty. So excited to get this started. Before we do, I’m going to request everyone to please put your questions in the comments. We’ll take them towards the end. Please retweet the space so as many people as possible can learn about RWAs and join the space with us. I’m just going to start with a round of introductions. Tyler from RW World, would you like to kick off? Then we’ll go through the roster. Hey, Tyler, happy to have you.
Tyler Sherman
06:31 – 07:53
Hey, good to see you all. Thank you so much for having us, and thank you to the Polytrade team for hosting. We’re really excited about everything Polytrade is doing. Briefly, my name is Tyler Sherman. I am the co-founder of RWA World, and I’m joined by our head of research, Ray Buckton. RWA World is a real-world asset intelligence platform focused on bringing transparency and clarity to real-world assets.
We run the largest publicly available database of over 420 real-world asset companies in our listing service, which you can find at rwa.world. We publish a weekly newsletter with real-world asset news, events, and intelligence for investors to understand the space and what’s happening. It’s hard to stay on top of everything, so we’re trying to build a tool that helps people with that. Long term, we are building out custom real-world asset data feeds that we can use to help with Oracle services in the real-world asset space, and we’re focused a lot on the collectibles market. I’m very excited to announce that we’re about to release news about a partnership with VanEck, and we’re also hosting a Real World Asset Day in Utah at Permissionless. So if anyone is interested in attending a real-world asset-focused event at Permissionless, you can reach out to us or find it on our account. Thank you so much for having us. We’re really excited for this conversation. Data on-chain is super important for real-world assets, and we’re happy to contribute to the conversation.
Milind
07:57 – 08:06
Pleasure to have you, Tyler and Ray. I’m going to hand it over to Sharif from Defactor. How are we doing, Sharif?
Sharif
08:07 – 08:40
Hi, it’s Sharif from Defactor today. I’ve been asked to step in. My name is Sharif, one of the co-founders, and I currently lead the tech and innovation pillar at Defactor. At Defactor, we’ve built an RWA toolkit to accelerate RWA businesses and get them to market quicker. This includes everything from asset tokenization to lending and borrowing, as well as a token management ecosystem for staking and governance. Delighted to take part in this space and excited to kick it off.
Milind
08:44 – 08:48
Thanks, Sharif. Glad to have you here. Oter, over to you.
Oter
08:50 – 09:46
Hey guys, thank you for hosting. Very excited to be here with you. At Unlockd, we believe in making it easy for anyone to borrow against any form of NFT or tokenized contract, and we’ve been expanding a lot into the real-world asset domain over the past 12 months. Our mission is clear: we want to make it easy for anyone to borrow against real-world assets. We’ve been building a permissionless instant lending protocol where you’re able to borrow instantly with fair appraisal and open-ended loans. Today, we’ve integrated with over 20 protocols, covering a wide range of real-world assets from real estate to collectibles to watches. We’re super excited to be here, to partner up with you, and to be with a lot of people pushing the industry forward.
Milind
09:49 – 10:11
Yeah, and we’re glad to have both you and Defactor in this space because you both are doing collateralized loans, and there’s a huge need for data there, which isn’t adequate at the moment. So I’d love to get deeper into that. I’m going to hand the mic over to our final guest, Makram from Blocksquare.
Makram Hani
10:12 – 11:19
Hello, it’s Makram Hani. I’m the CEO of Blocksquare. Thank you for having us, and thank you to everyone for being here. At Blocksquare, we’ve been one of the early starters in tokenizing real-world assets, and we began with real estate, which is our specialty. Today, we’ll be talking about some of the advancements we’re creating, like Tokolitics, which adds an additional level of transparency and data on-chain. We’re also very excited about the future of what blockchain can bring to real-world assets, from the ability to access a trading wheel or trading book where every single transaction is publicly available every second. This is evident in our technology. We’re an infrastructure and white-label technology provider, and our partners use our technology to add transparency to their local markets. Again, excited to be here and hopeful to add value.
Milind
11:22 – 11:33
Absolutely. Thanks, Makram. I think I was in a space with you guys sometime before, and I remember that Tokolitics piece. It was really deep in what you guys are building. Glad to have you.
Makram Hani
11:36 – 11:36
Thank you.
Milind
11:37 – 11:47
Yeah, that was a lovely one. Thank you for having me again. Last but not least, gonna pull up Piyush from Polytrade. The floor is yours.
Piyush
11:47 – 13:29
Hey, thank you, everyone. This series of spaces is really interesting, and I believe a lot of valuable information will come out of these discussions. I’m particularly excited about this panel today because real-world assets are impossible without leveraging them. People are doing all sorts of things in DeFi, but RWAs are still lagging behind in the whole Web3 journey. The moment you have leverage instruments being built on top of these RWAs, I think we’ll attract a lot of Web2 players into this space because that’s what they always do, right? If you’re holding any sort of gold or securities or real estate, typically the Web2 facilities of lending and borrowing are so robust that this is the need of the hour.
Quickly about myself: I am the founder and CEO of Polytrade. Polytrade doesn’t need any introduction. We are currently housing more than 50 protocols across 11 chains, bringing the aggregated asset base to one place where the chain doesn’t remain a hindrance for a user. They don’t need to worry about which protocols are selling a particular asset class; they can find everything here, whether it’s in discovery or trading. Secondary trading was one of the key aspects we wanted to bring in because, again, it’s real-world assets. People don’t want to go back to the protocol and ask for their money because money is locked into real-world assets, and it needs time to exit. However, if there is a secondary market, it would be easy for people to enter and exit at any point in time. Super excited about this space. Thank you, Milind. Let’s go ahead and proceed.
Milind
13:31 – 14:19
Thank you, Piyush. Alright, so let me kick things off. It’s going to be a fluid space. I have a list of questions. We might go through them, or we might not. Let’s see where the space takes us. I’m going to kick it off specifically with the protocols here—Blocksquare, Defactor, and Unlockd—about the need for data on-chain. In your perspective, either you’re tokenizing or you’re providing some added utility to these RW assets, what is the importance of data adequacy? And where do you see some holes in the data right now in the RW landscape? If I might put it like that, what’s been your experience with RW data on-chain?
Makram Hani
14:23 – 14:26
Let me take it forward unless somebody else would like to jump in.
Milind
14:28 – 14:29
Go for it.
Makram Hani
14:30
- 17:04 Yes, there’s always a gap when you’re adopting new technology, especially when disrupting an industry that has not been disrupted for a very long time. There will be a gap in data. Yet we always know that data is power, and data aggregated, consolidated in the right way, and served in the right way is ultimate power because it can be understood, analyzed, and then decision-making can be done accordingly, especially for retail investors but also for institutions. When we talk today about data availability on-chain, we see, for example, what Blocksquare brings to the chain. We provide data starting at the primary market level, where all the data is served in an arranged manner, immutably recorded on-chain, and users can have easy access to it. The data starts with valuation data. Again, we deal with real estate, so this is our core focus: valuation data, transactional data.
And that transactional data is recorded, serviced, and served to all individuals using our technology so they are able to see the history of transactions on a certain asset. Now, coming up is much more data, and with time and experience, you can serve that data in a more simple and understandable manner where it’s analyzed. It’s not only raw data that’s served, but also the ability to figure out things that today in real estate you’re not able to. Many people all over the world make decisions that are half thought through, not because they haven’t thought about the asset—which could be the biggest purchase in their life—but because they didn’t have access to the right data and had to depend on sources that don’t have to be true all the time. I believe blockchain changes all of that. It gives not only availability of data but also the history and track record of all the data compiled, analyzed, and served.
Tyler Sherman
17:12 – 17:27
Maybe a question for the Defactor team: As you guys are thinking about representing stuff that’s off-chain, what real-world data adequacy challenges have you encountered? How do these compare to Makram’s experience?
Sharif
17:29 – 19:05
Yeah, so maybe let’s just talk about an example of what we’re actually doing and going live with. We’ve got a gold-backed lending pool currently running, and there are some gold tokens that are tokenized and backed by real gold in custody. A key piece of data is the spot price of gold in that solution, so it can trigger alerts around collateral loans, re-evaluations, etc. We’ve basically built a multi-asset class toolkit, and every asset class that uses it on the lending and borrowing side has the same requirement. You know, we’re talking about real-world assets, but what is that real-world asset worth at this moment in time, and can it change? That piece of data or price feed triggers an event within the ecosystem, and how do we manage that? It very quickly becomes vast when you’re talking about dozens of asset classes and hundreds of jurisdictions all around the world and hundreds of markets.
And that’s the challenge and the opportunity. People talk about real-world assets as if they’re just anything in the real world, but everything drives right down into a particular function that’s happening on-chain and what’s needed in order to have that data available so we can make a decision or trigger an event.
Milind
19:09 – 19:31
And would you say it goes a little deeper? Sorry, Tyler, I just want to double-click on what Sharif is saying. Does it go beyond price, like data from the wallet to ensure there’s something backing this, you know?
Sharif
19:32 – 21:07
Absolutely. We’ve seen a lot of businesses experimenting with all sorts of data feeds on that side. Things like IoT feeds for inventory movements within warehouses, third-party audits where people are saying they might have specific goods in a warehouse valued at a certain point. But just because somebody says that doesn’t necessarily mean that a secondary market is there should there need to be a disposal. Essentially, if you look at any complex process that would be managed by a multinational company across the supply chain, there are literally hundreds of data points that go into that. And as we’re building out Web3-powered solutions, our solutions need to be on par; they have to be much better, actually, in order for people to trust them in that way. And trust is the key partner. If you’re getting feeds of IoT data, how can that be independently verified and not simulated?
I think that’s the opportunity for these decentralized networks and communities to act as both oracles and verifiers of the data to say, yes, a specific asset is there, it’s in a specific condition, and there’s an underlying buyer or a buyer of last resort should there be an issue with that collateral or asset. There are layers of data needed in any complex system we’re thinking about and building out.
Tyler Sherman
21:07 – 21:22
I’d love to give Oter a chance to jump in here because I know at Unlockd, data reliability is so vitally important if you’re going to bring liquidity to these assets, especially if you’re going to borrow against them. Data integrity is just crucial. Could you talk about that?
Oter
21:24 – 21:47
Yeah, so for us, it’s really critical because there are three different sides to a very extreme market volatility like we’ve seen over the past few days.
Ray
22:01 – 22:03
Hey, am I being rugged, or…?
Piyush
22:04 – 22:04
No.
Tyler Sherman
22:04 – 22:13
I think he’s cutting in and out. Yeah, Oter, I don’t know if you can hear us, but it looks like you cut in and out for a second. You want to try again?
Ray
22:19 – 22:21
It shows he’s connecting on my side, so I think he may be facing some tech issues.
Tyler Sherman
22:22 – 23:19
Oter, what I would recommend is to drop from the space and come back in. I’ll get you right back onto the space. That usually helps reset it. Apologies for that. I was really excited to hear your answer to that question. But maybe, Makram, we can pass it back to you for a second because I know Sharif made some really great points on this data integrity piece. I wanted to know if you wanted to add to that. And then I definitely want to hear from Unlockd once they’re back here on the stage.
Okay, Oter, I just sent you a request to jump back on the stage. In the meantime, while he’s reconnecting, Milind, do you have another question you wanted to ask?
Milind
23:21 – 23:33
Yeah, maybe just pass it over to Tyler and Ray. You guys are working with so many protocols, specifically on data. What’s your take on data adequacy? Where do we need to improve?
Tyler Sherman
23:34 – 26:03
Happy to add to this, and Ray, feel free to jump in. One of the things we’re trying to find as we talk to projects like Unlockd is that we’re really interested in the tokenized luxury watch category because we believe there’s a lot of good information out there in both TradeFi Web2 solutions and with the actual tokenizers themselves. As you talk to different tokenizers of real-world assets like luxury watches, they all have different ways of centralizing their metadata associated with these watches. For instance, with a Rolex, you have a lot of characteristics: the color and quality of the band, when it was made, its history, what it had traded for previously. If you can get a resource that aggregates and centralizes all this information into one API, you can start to infer some interesting things from that information and have better data quality assurance that you’re getting a watch at a fair price. Historical price data is one piece of information that’s helpful, but then having more qualitative datasets is really interesting.
That’s where the complexity comes in. How do you differentiate between a brand-new watch that’s never been worn and one that’s fair or poor quality? It’s more of a qualitative judgment. Many tokenizers for the watch industry use authenticators or grading services that take photos and vault these assets, offering an independent third-party attestation to the value and quality of the watch. Then it becomes a question of trust in the authenticator.
We’re really excited about this space because there’s a massive opportunity for authenticators to cryptographically sign their assessment of a given asset. At RW World, we’re interested in working with projects that have access to those authenticators, vaults, and auditors to answer questions about the fidelity of the data. How can we be sure the data is accurate? Let’s not forget we’re in the real-world asset industry. This isn’t the permissionless cypherpunk vision of crypto, although that’s an aspect. There’s an element of trust, and there always will be for real-world assets. I don’t know if Ray has more to add.
Ray
26:05 – 27:26
100%. You hit the nail on the head, Tyler. I just want to underline the foundational component of trust in this intersection of distributed ledgers and blockchains entering the mainstream. Tokenized assets help get around the intrinsic value question for people. For the longest time, folks, like my father-in-law, might not get Bitcoin because it’s new, on-chain, flashy, and runs super fast. But what’s behind it? Tokenized assets help get around that.
It’s crucial, as you said, Tyler, that we have the foundation of trust to ensure the fidelity of the data we bring on-chain because this will be many people’s zero-to-one moment for our industry and this technology. Getting it right is crucial, and
everyone speaking here today is an instrumental piece of that puzzle, ensuring we move this forward in the highest fidelity way possible. So that’s how I’ve been thinking about getting data on-chain recently. We’re in the very early innings of this industry, really. It’s like day one, inning one, to use a baseball analogy, for tokenized assets. People had to build the actual stadium and fill the seats. A lot of groundwork has been laid, but in terms of running the race of tokenization, it’s incredibly early. It’s a very exciting time to be building in it.
Tyler Sherman
27:31 – 27:35
Looks like Oter is back. Oter, do you want to try again? Can you hear us?
Oter
27:35 – 27:36
Yes, can you hear me clearly now?
Tyler Sherman
27:37 – 27:42
Yeah, that sounds great. The last question we asked was about off-chain data for RWAs.
Oter
27:43 – 29:05
Yes, so I wanted to highlight three different aspects. First is on the appraisal in our protocol. We need to have always-on appraisals, especially in the context of very high market volatility like we’ve seen recently. You need reliable, frequent, and trustworthy data to update everyone on the health factor in real time. Second, it’s critical to adjust the spread between deposits and the way we’re rewarding these deposits, so constant updates on deals and spreads are necessary. Lastly, access to liquidations and auctions is absolutely critical for us. It’s one of the most difficult things because depending on the speed of liquidations and auctions, especially for us as we have open-ended loans, you can be in a situation where some people may dispute the liquidations or feel like they’ve been unfairly liquidated. So there are quite a lot of implications around data. What’s important is not just the reliability but also the timeliness of it. That’s why we’ve integrated with quite a few partners and spent significant effort on the API, real-time monitoring, and engineering side to ensure everything is open and transparent.
Tyler Sherman
29:06 – 29:30
Can I ask you a question on that, Oter? In my opinion, I don’t think we really get real-world asset liquidity until we have real-world asset data and good information. You guys are able to move only as fast as the data you’re able to bring in. Like you said, liquidations are a very serious matter, and you want to make sure that data is correct, secure, and can’t be tampered with.
Oter
29:31 – 30:03
Absolutely. In fact, I would even go as far as to say that we’ve chosen not to integrate some asset classes and partners because of this. If you’re enabling liquidity against an asset class that moves by the minute, but you’re only able to get reliable data that’s hourly or daily, we’ve made the conscious decision not to integrate them. We don’t want to take that risk and potentially be in a position where we have a conflict with our users.
Milind
30:06 – 30:14
And what kind of assets fit this framework, Oter? I know there are watches and gold. What else are you looking at?
Oter
30:14 – 31:12
A lot of commodities, for example. We’ve seen especially over the past few months that a lot of commodities still don’t have full on-chain data when it comes to tokenized assets. Even with watches, we’ve seen that appraisals and changes are generally daily, not more frequent. Financially denominated positions, like many securities or futures, fit into these categories. Today, a lot of financial and related decisions, especially tied to stocks, do not have the frequency of data, even though the underlying assets have it. But the tokenized versions do not yet. I would even go as far as saying that in some assets like wine, we’ve seen huge momentum, but the reality is that most price benchmarks are only updated weekly or monthly. However, we do see some users that are slightly ahead of the curve, saying they need daily updates. So it’s quite a complex matter now.
Tyler Sherman
31:20 – 31:22
Sharif, did you want to add to that? I saw you unmute.
Sharif
31:23 – 32:08
Yeah, I was just going to add that I’m having a thought around the opportunity and challenge for our space to make it easy for regulated entities, governments, and states around the world to bring asset ownership registries and titles online. I know there’s a lot of experimentation happening around titles for real estate, but I think we need to come together and have an industry standard that makes it easy to adopt.
Makram Hani
32:08 – 32:11
You’re breaking up a little. No, please continue.
Sharif
32:13 – 33:13
Yeah, I believe that’s a real opportunity. I’m not sure whether there’s anybody really thinking in that way—who’s interfacing with the real estate management registries in the jurisdictions we’re working in? Because until we get on-chain assets and ownership records, we’re going to have a gap. But this is also a gap in the real world. We all know multiple examples where a piece of property would have multiple loans from different banks because even at that level, they’re unable to attest or understand who actually owns the title. So I think that’s a real opportunity. How do we make it easy for these assets to be proven that ownership is immutable and exists? That’s the big unlock.
Makram Hani
33:15 – 36:01
I’m in Dubai, and I’m pleased to say that Dubai real estate titles are on-chain. Yes, it’s a private chain, but we hope that eventually, we’ll have local registers per jurisdiction on-chain, similar to what we have in Dubai. The ability for parties to impact that register simplifies things for everyone and provides real-time data. In 2018, I spoke at a conference and said I dream of a GTM—a Global Tokens Market—similar to the S&P and NASDAQ, where every transaction can be tracked, and every order can be tracked. It will be more efficient, and governments will make more money, investors will make more money, and there will be less inefficiency. That’s what real estate tokenization is all about, and probably other real-world asset tokenization as well. The opportunity is there, the availability of data is there, and having it immutably recorded on-chain is there. Yes, challenges will remain for the coming period, but I believe we’re advancing very fast. The key is data that is well-aggregated because too much data creates too much noise in an unneeded manner. The beauty of having it on-chain is that you can rarely go wrong because it’s immutable.
Piyush
36:03 – 36:49
Just to your point, I want to add that this is exactly the problem of data we’re facing currently in Web3 because it’s not just about multi-chain scattered data. The state changes of these assets are constantly happening—the apartment or the building is rented, mortgaged, or has expenses. Ownership continuously changes. Secondary trading could be a nightmare because regulators would want to make fees on every transaction. For example, in Dubai, where I also live, the Dubai Land Department (DLD) charges fees. If you have secondary trading of real estate units happening, DLD would want to make revenue on every transaction, and that would become insane. You could end up paying 4-5% on every transition to the government.
Makram Hani
36:49 – 38:40
We built it into our system. Allow me to comment here. The beauty of it is that at Blocksquare, we thought of that. We’ve told regulators that today, you make a 4% registration fee or a 7% stamp duty, and that’s the cost of the transaction, and that’s what you make. Now, today, because it’s a bulky transaction—$1 million to $100 million—that’s a fair hit. Yes, you make 4% of $100 million or 4% of $1 million or $10 million. But you do it once every 7 to 20 years, depending on the jurisdiction and the type of asset we’re talking about. However, what if it’s a $10 per transaction? That $10 million asset can be split into 100,000 tokens or more. We split an asset into 100,000 tokens through our protocol, and we create 20 tokens today. We pay a 4% embedded in the transaction for that amount, so we pay 4% of $10 or 4% of $1,000. If it’s 7% duty, we pay 7%, depending on the jurisdiction. So the ability to service them and the service is there.
Today in Dubai, we have a real estate trustee registration. In other parts of the world, you have the notary who takes care of that. All these parts can be aggregated into the same transaction, and every party, including the Land Registry, can be paid the equivalent amount for the size of the transaction it is. What we tell governments is that you will not reduce your income. Yes, people are paying less because it’s more efficient. However, you will make more money because rather than an asset trading once every 10 years, it could trade three, five, or 15 times every 10 years.
Tyler Sherman
38:42 – 39:34
Makram, these are such great points, and this is a vision that we’ve talked about before at RWA World—this idea that, for
some reason, the real estate market just has never had this moment where it’s gone to a digital exchange format. Why is that the case? In the US, for instance, there’s this real estate intermediation that happens, and the fees for the real estate agent—it’s a very intermediated process. You also mentioned during your conversation about the different land records and registries all being difficult to coordinate. It’s amazing what Dubai has accomplished. I feel like you’re getting closer to that GTM vision that you talked about. I’d love to see a world where real estate can be transacted in a less inefficient form because, with tokenization, you have the ability to move more quickly and fractionalize. So congrats to all your success. That’s really impressive.
Milind
39:40 – 40:26
I just want to pick up on something you mentioned earlier, Tyler, about the different parameters—qualitative and quantitative—when passing data through this Oracle. I want to take that framework to Ashish at Polytrade as well as the teams at Defactor and Unlockd. For unlocking interoperability in these assets, how can secondary protocols like us—Polytrade and the collateralized lending piece—most efficiently access the data they need? What’s been your experience in building secondary utility on top of RW assets and the need for data there?
Ashish
40:29 – 41:48
I’ll take a shot at it first. Hi, guys. At Polytrade, while we’re aggregating a lot of other protocols together, we’ve seen that everybody believes a particular parameter is more important than the other. We’ve seen the same assets being tokenized in multiple formats. It’s a hustle to figure out what the right data is. A big problem is that data sources aren’t always verified, and there isn’t enough concern about how Web2 data is supposed to be prioritized when putting it into Web3. That’s a very big problem as well. We have some great people here who are solving these problems, and in the last 30 minutes, it’s been great hearing from all of them, but we have a long way to go. It’s very interesting to see how regulations will take shape. We are one of those categories that are highly dependent on Web2, and it shows in our charts and growth.
Tyler Sherman
41:50 – 41:50
That’s a really good point.
Milind
41:50 – 42:21
I’ll slide in and hand this over to Oter. What has been your experience using Oracle data, for example, to underwrite your loans? Or have you built your own system? I know you’ve been working with RW World as well, but what has the journey been like?
Oter
42:24 – 44:10
In general, as long as we have the right integrations and the right APIs, and we can build on top of the ecosystem and monitor and test, things are generally under control. But it’s very important to spend a lot of time on the technical assessment and running simulations. Around a year ago, we had some challenges with some of the data providers. What we try to do is have a set of statistical models. We have more than three people on the team who are experts in algos, coming from the quant side, where they run different mass simulations to control the impact of appraisal challenges. Then we try to normalize this. For example, during the volatility of PFPs or blockchain gaming, there were deviations of plus/minus 200% between different appraisal partners. It’s always challenging, but the good thing is that as long as you have real-time monitoring and alerts, and you report them to partners, our experience is that people in the blockchain ecosystem know what is at stake. Everyone’s always available and willing to fix issues, especially in our model, where as partners we all do revenue sharing, monetize together, and support each other. People are extremely responsive. The rule of thumb here is no matter how close you are with a partner, no matter how much you’ve tested, you can’t take anything at face value. You always have to have a second layer of safeguards to prevent users from running into any issues.
Tyler Sherman
44:11 – 45:48
Yeah, I think what we found at RW World is that we don’t yet have really solid answers for this, but one thing we do know is that the more data, the better. Having secondary sources and off-chain information as well is important. For instance, we’re working with an analytics provider that brings us historical price feed data through an API. There’s no attestation for the data necessarily, but it gives us a good reality check on luxury watches, which is a good starting point. We can use that information to add additional sources. One thing we’re trying to do is build better relationships with the custodians and the actual authenticators themselves, not just the tokenizers. It’s great to work with the tokenizers and get their perspective on the authenticators, but we also want to build those relationships directly with the authenticators because if we want to create a really solid Oracle, say in the luxury watch space, we believe we can do that only once we’ve acquired a variety of sources of data and have really solid relationships with the authenticators themselves. This question is at the heart of bringing high-quality data on-chain. You can put any data on-chain, but it has to be high-quality and vetted. Our approach is to gobble up as much data as we can to start, and then infer from it. There are companies working on rating agencies for different projects, so there are ways to work with them to bring data quality on-chain.
Milind
45:50 – 45:57
Tyler, to that point, how much of this data needs to really go on-chain, and how much can stay off-chain and just be provided when required?
Tyler Sherman
45:58 – 47:37
That is such a great question. We were talking to the team at Chainlink, and one of their questions is that they don’t believe everything has to be on-chain, but what are the three or four traits associated with an RWA that absolutely must be on-chain? For a T-bill, for example, you could have the coupon rate or the net asset value on-chain. For a private fund, those are vital pieces of information. But when you’re talking about a luxury watch or real estate, which pieces are necessary to be on-chain, and which can simply be called off-chain? It’s a vital question. One of the things that’s important is the type of apps being built around that data. For example, if you’re about to liquidate someone’s collateral, that smart contract only needs maybe two or three pieces of information. Qualitative information might be irrelevant, right? It doesn’t matter if it’s a brand new Rolex or an old one—you’ll still get liquidated if you’re underwater on it. That smart contract just needs to know if the price has fundamentally changed and if it has fallen through various levels where the person has been warned about liquidation but hasn’t put up more collateral. Those are the sorts of questions that need to be asked. We can’t innovate in a box and assume we know the best five pieces of data to put on-chain. We want to have conversations with the likes of Unlockd, Defactor, Blocksquare, and Polytrade to ask them what data is important to have on-chain and what isn’t necessary. We’ll save on gas fees and integration work if we can put only the most essential items on-chain.
Makram Hani
47:40 – 49:20
I believe what we can do from real estate is standardization and normalization of data. That helps us decide what data is required and in what form. Our head of risk, Daniel, has worked with the team to put together Tokolitics, where we neutralize and standardize the type of data and the quality required for the source of data. For example, in real estate, an RFC-certified evaluation report can be considered or should be considered. This can also affect other categories of real-world assets. It’s needed to increase standardization and normalization, especially when it comes to trading the asset and its quality through its lifetime. There are many moving elements, and all of those create an impact on the asset itself, the area it’s in, and the quality of its management. I believe in the future, IoT and AIoT will be valid collectors and qualifiers of data. But it’s very important, including geopolitics and other elements, that these impact the asset and all types of assets, including luxury watches. Normalization and standardization—what type of data can and should be considered, and what risk is required—are key.
Sharif
49:23 – 50:11
I’d like to add that at the moment, we’re all talking about the input of data and data coming in on-chain. That standardization and normalization for the output, for the actual token standards, is also key. We were talking internally at Defactor this week—where is the big liquidity going to come from? It’s only going to come when we, as an industry, can lay out a set of standards that fintech institutions and large traditional market makers can understand and say, “Yes, we understand that your asset stack is controlled in this way, and we can have our own big-four auditors audit all the way down to the asset issuers.” Until we get that this is the solution and how it works, we’ll constantly be building in silos and experimenting.
Milind
50:13 – 50:38
I agree with you on that because I know Ashish has been facing this problem at Polytrade. We have so many asset classes, and I
think the only solution is some kind of standard for each asset class, both in data and in a passport-like format. I want to kick that over to Ashish real quick on his experience building and integrating 50 protocols and moving forward with that.
Ashish
50:40 – 52:03
Standardization is something that is truly required in our industry. My understanding is that we cannot have one type of standardization for all; it will be across categories. Maybe we’ll see all houses being tokenized in one manner, where we prioritize a particular type of data, and that’s how we can see standardization. We all need to come together as one unit to standardize these things because when we talk to regulators, it will be way easier and simpler for them to accept these standardizations. And it’s not something new. We’ve been buying and selling houses for ages. What we’re doing is simplifying it with tokenization, giving more access, making it easier. We don’t need to reinvent the wheel; we just need to add a motor to make everything go faster.
Tyler Sherman
52:04 – 53:50
I have to jump in on this. One of the things we tried to do at RW World in the beginning was to create categories of these tokenized assets in our database. We came up with 13 categories, but we’re now considering 15. We want to develop relationships with tokenizers to understand what data they’re collecting versus others and where the delta is between them. Could standardization be possible? One of Ray and I’s favorite memes is about creating new standards because everyone thinks, “There are 14 standards today; we need one unifying standard.” Then you create that standard, and now there are 15 standards. Getting adoption of those standards is tricky, but this is our vision at RW World. We want to understand each asset class intimately and in detail and then work with the leaders in each category. For example, in RWA lending, that would be Unlockd, and in real estate, that would be Blocksquare. There are amazing folks here on the stage who are all leading their respective categories.
Our goal at RW World is to understand what the best collection of data is for each asset class and encourage other tokenizers to use those additional pieces of data where needed. What we don’t want to do is go to the real estate industry and say, “We’re RW World, and we know real estate better than you.” Absolutely not. We want to know what databases are most vital, and how can we help support you in bringing that data to other sources and encouraging others to raise the quality of their data standards. Our ambition at RW World is to incentivize good behavior in our database and encourage the best projects to rise to the top.
Ashish
53:53 – 54:51
I think I want to add another piece to this. In Web2, data was the oil, and while we’re building blockchain and talking about freedom, the baseline was that data would be free for all. While you guys are working so hard to build this data, what’s your take on giving free data accessibility on-chain? Will you allow people to build secondary markets? I think this is more of a question from the Polytrade side, but how do we build secondary markets? Do we get access to that data freely, or is it gated? What is your vision or thought about how this will happen? One person might not be able to get everything right.
Tyler Sherman
54:51 – 56:58
Some people treat data like a commodity because we live in such an information-rich environment. They think data is super cheap, but companies like Crunchbase spend tens of thousands of dollars acquiring their data in small batches because a lot of manual work is involved. When you think about all the hard work tokenizers are going through to get good data, I don’t think we should assume data should just be free and available. Certain information should be free and available, and we should create marketplaces around that data. But there are times when paying for good data is absolutely worth it, especially if you want to ensure you don’t get liquidated. I think Oracles are a good way to monetize data. Some data shouldn’t be locked behind paywalls, but when we provide information to the market, like the size of the tokenized collectibles market, we plan to do that for free. We’re building a dashboard for tokenized collectibles to help people understand the market’s size in various segments. However, building apps on top of that data may require charging for it. The marketplace for data should be driven by demand from the buy side. Ultimately, we’re focused on driving secondary liquidity and understanding what tokenized assets will generate that interest. This will guide us on where to build paid data solutions. The question of how much data should be free and how much should be monetized is important, and we’re open to evolving on this.
Ashish
57:00 – 57:42
I think there are two ways to look at this from a Web2 perspective. There are companies that gate all data sources, and then there’s Spotify. Creators may not love it, but Spotify has given access to all music, with paid subscriptions for additional features like analytics and playlist sharing. Do you see this industry evolving in a similar manner where raw data might be available, but you need to pay companies to index and analyze that data beautifully for secondary market use?
Makram Hani
57:45 – 57:47
Don’t you feel that data is always paid for?
Ashish
57:47 – 57:48
Yeah, it depends.
Makram Hani
57:48 – 58:14
It depends on who pays for it. It’s either paid upfront or paid on success in a transaction. The better way is probably to pay on success, as it’s more feasible and has historically generated more wealth. So I believe data is always paid for.
Tyler Sherman
58:15 – 58:16
That’s really a good point.
Milind
58:16 – 58:51
Yeah, I think that’s a great way to wrap up. We’re almost on time here. I just want to give all the speakers a quick one-liner as a closing note. Maybe just tell the audience where they can find you and how they can engage, and we’ll wrap up right on time. I think we could have gone on way longer about data. Thankfully, we have one more episode next Tuesday. So I’m just going to hand it over to Makram to start. Just let people know where they can find you and how they can engage.
Makram Hani
58:53 – 59:25
It’s very easy to find me or anyone on the team at Blocksquare. Just Google us, and you’ll find us. We believe we’re doing our bit. Tokolitics is what we’re presenting to the world very soon, and hopefully, that will impact the industry. I’m sure everyone here is doing their part to impact the industry in the right way for the betterment of all of us. Thank you so much for having us, and I hope you have great success with this series.
Milind
59:29 – 59:32
Thank you. Pleasure to have you. Oter?
Oter
59:34 – 59:52
Yeah, thank you so much for having us. Data is one of the main gaps we’re trying to address to take the space forward. I have no doubt that the real-world asset industry will continue to grow, and we’re going to take the world on-chain and enable liquidity for everyone. Thank you so much, and I look forward to our partnership and working together.
Milind
59:60 – 01:00:03
Amazing. Over to Sharif and Tyler, and finally Ashish from our end.
Sharif
01:00:05 – 01:00:45
Thanks very much. It feels like we’re just scratching the surface here, so I’m excited to hear there’s a full series coming. If we can help in any way, do let us know. We’ve discussed data quite a bit, layering on top of data with insights and analytics, but we didn’t even touch on artificial intelligence and how it can really power and escalate this. I’m really excited to double-click and deep dive as we start working together. You can find us at Defactor.com, and we’re on all the social channels. We’re kind of everywhere that RWAs are mentioned at the moment.
Tyler Sherman
01:00:47 – 01:01:52
Thanks again. This has been a really fun conversation. I’m grateful for the opportunity to share more about RWA World. Makram, Oter, Sharif, Ashish—I’ll be sending you DMs about getting you on some more stuff we’re doing at RWA World. Super grateful for this opportunity. You can find us at rwa.world, and I would also encourage everyone to take a look at our in-person event, RWA Day, at rwa.day. That’s the website for it. You can also follow us on Twitter at the RWA World account to find out about this event. The real-world asset industry is growing quickly, and our goal is to have great networking opportunities for builders and investors at this event. I hope that’s helpful for everyone. Be sure to follow everyone here on the stage—they’ve all taken a lot of time out of their day to share great insights with us. I’m really excited to continue this conversation as it’s a very important issue. Real-world asset data is vitally important if we want our industry to scale. Thanks again so much for having
me and Ray.
Oter
01:01:56 – 01:01:57
Thank you, guys.
Ashish
01:01:58 – 01:02:22
Thank you, everyone. It was great to be here. I think we’ve learned a lot. Data is the central source of us moving forward, and it’s pleasing to know that there are some great guys building here. We are the middlemen, and it makes our job way easier when an API answers all the questions. So thank you for doing that for us.
Milind
01:02:25 – 01:02:59
Absolutely. Thank you, everyone, for being here. A quick note on Polytrade: We’re giving away special XPs for everyone who’s been listening to this. The code is RWAMEET, and you need to go to portal.polytrade.app to get your XPs. Of course, you can find more than 5,000 RWA assets across 11 chains on market.polytrade.app. We’ll be back with the next episode next Tuesday at 6 p.m. GST, same time. See you all there. Thanks to the audience, thanks to the guests for being here, and see you all on Tuesday.
Tyler Sherman
01:03:01 – 01:03:01
Thanks, everybody.