Attention to the Algorand bull on RWAs

A sensational hoax is circulating regarding Algorand and the RWA market.

According to this hoax, Algorand would now hold 70% of the entire RWA market.

The curious thing is that it is a very simple hoax to debunk, because the website RWA.xyz is cited as a source, on which, however, that 70% figure does not appear at all. 

The share of Algorand in the RWA market

RWA., in fact, publishes a chart in which it shows the total value of RWA per chain.

In first place, there is, of course, Ethereum, with more than 50% of the total value.

Moreover, the overall value of the RWA on-chain turns out to be 13.1 billion dollars, of which 7.5 on Ethereum, while the bull on Algorand mistakenly claims that the overall value would be only 268 million dollars. 

It is therefore possible that the hoax arises from a misunderstanding, namely from the fact that instead of examining the entire sector of on-chain RWA, only a small portion is examined. 

The misunderstanding becomes evident when within the hoax at a certain point the correct figure of 13.1 billion dollars is also reported, so it is simply a mistake. 

The true share of Algorand is about 264 million dollars, which is just over 2%. 

It is not clear, however, which subset was taken as a reference to calculate that 70%. The serious error lies precisely in not having reported it. 

The RWA market

The RWA are the tokens of Real World Asset.

It is essentially about the tokenization of existing off-chain assets, so that the tokens can be brought on-chain.

It is not a coincidence that more than 50% of RWA tokens, by market value, have been issued on Ethereum, because it remains the most secure chain, after Bitcoin, and the one with the most activity on smart contracts.

While in terms of daily transactions Solana is now the leader, it should be noted that primarily memecoins run on Solana, whereas RWAs primarily run on Ethereum.

In fact, Solana turns out to be only in fifth place among the chains with the highest overall value of RWA, with only just over 400 million dollars. 

Note that the second chain in this ranking turns out to be ZKsync Era, which is actually itself a layer-2 still of Ethereum. ZKsync Era has more than 15% of the value of RWAs on-chain, which combined with the 57% of Ethereum’s layer-1 leads to exceeding 70%.

Therefore, it is not Algorand that has 70% of the RWA market, but Ethereum, as it is obviously the case. 

The first alternative layer-1 is that of Aptos, which barely exceeds 4%. 

Tokenized Stocks

Always going to RWA.xyz to analyze the individual sectors of the RWA market, you discover which one Algorand dominates.

This concerns the sector of tokenized stocks, which has a total of only 392 million dollars on-chain, with 264 million specifically on Algorand.

Thus, Algorand holds about 67% of the market for tokenized stocks, in terms of overall market value, but this market is worth only less than 3% of the overall RWA market. 

The largest market is that of private credit, with its 14 billion dollars, but this is not counted in the overall on-chain value. In fact, these are not true off-chain assets that have been tokenized and brought on-chain, but loans issued directly on-chain, without an off-chain counterpart. 

It is therefore not about tokenized off-chain assets, but real on-chain assets. 

Among the on-chain RWAs, the dominant market is that of tokenized US government bonds, with more than half of the total value of 13.1 billion dollars (7.3). 

The vast majority of tokenized bonds are on Ethereum, which dominates this market with even more than 75% of the total value, with Stellar in second place and Solana in third but far behind. 

It should also be noted that the dominance of Algorand in the tokenized stock sector is due to the sole Securitize protocol, on which all 264 million dollars of tokenized stocks on Algorand have been issued. 

The impact of RWA on the crypto market 

For some time, there has been talk that the RWA market could drive the next bull run crypto.

It must be said, however, that excluding on-chain loans, tokenized assets today still constitute only a small fraction of on-chain assets. 

Suffice it to say that the overall TVL of DeFi is 115 billion dollars, compared to the 13.1 billion dollars of on-chain tokenized RWA. However, the RWA market is growing rapidly, as for example it has doubled since the beginning of the year, but it does not seem to have yet reached a size that can make a difference in the overall crypto market.