Lyron Co Ting Keh
@lyronctk
GREAT article by Nathan Allman Centered around a useful observation re how people use tokenized RWAs in the real world (lizard brain explanation below)
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Lyron Co Ting Keh
@lyronctk
People use tokenized RWAs for three reasons: [1] Buy anywhere. Global distribution and settlement for cheap [2] Use anytime. 24/7 [3] Compose everything. Plug into defi
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Lyron Co Ting Keh
@lyronctk
The article evaluates the utility of these properties for a) Cash equivalents, investments that you can treat as cash bc [high liquidity, low risk, short maturity], e.g. mm funds b) Everything else, e.g. stocks
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Lyron Co Ting Keh
@lyronctk
FOR CASH EQUIVALENTS Need all three reasons (buy, use, compose)
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Lyron Co Ting Keh
@lyronctk
FOR EVERYTHING ELSE Don't need #2 (use anytime) What does recognizing this help you do? Solve a major problem of tokenized RWAs, fragmented liquidity i.e. It's bad that you currently can't sell $TSLA_TOKEN into a $TSLA bid
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Lyron Co Ting Keh
@lyronctk
This is fixed if you throw away #2 (use anytime) How? Instead of tokenizing $TSLA directly, tokenize a receipt of $TSLA So now if you have $TSLA_TOKEN, you're NOT holding a distinct asset You're instead holding the right to use $TSLA in a centralized broker-dealer
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Lyron Co Ting Keh
@lyronctk
In other words, your $TSLA isn't on-chain. It's off-chain, controlled by smart contract txs instead of API calls
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Lyron Co Ting Keh
@lyronctk
Weird, subtle distinction Simple example. Try calling swap() on $TSLA_TOKEN > BEFORE: Happens immediately against the pool of other on-chain assets > AFTER: Action "settles" immediately, but the actual swap happens during market hours against the pool of all assets
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