#PLUME rwa refers to traditional assets such as real estate, can they be traded through web3?

Yes, RWA (Real World Assets) does refer to traditional assets such as real estate, debt, commodities, stocks, etc., which are digitized and tokenized through Web3 and blockchain technology and traded and managed on decentralized platforms. By mapping these traditional assets to the blockchain, RWA can leverage Web3 technology to provide increased transparency, security, liquidity, and global trading opportunities.

Here is how RWA trades through Web3 technology:

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1. Tokenization

Tokenization is the process of converting real-world assets (such as real estate, gold, debt, stocks, etc.) into digital assets on the blockchain. Through tokenization, ownership of traditional assets can be traded, distributed, and managed in the form of tokens on the blockchain.

Tokenization of real estate: for example, dividing the ownership of a property into multiple small tokens, where each token represents partial ownership and allows different investors to hold it.

Commodity Tokenization: For example, transforming commodities such as gold, oil, etc. into tokens on the blockchain, making it easier for investors to trade and hold these commodities.

Tokenization can not only improve the liquidity of assets, but also allow investors to participate in the investment of large assets with relatively small funds.

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2. Decentralized Trading (DeFi)

In Web3, decentralized finance (DeFi) protocols allow users to trade directly with other users through smart contracts without relying on traditional financial institutions. This means that traditional assets can be used as collateral, pledged, or used for DeFi activities such as borrowing and lending.

For example, real estate or other RWA can be used as collateral to finance or borrow with the help of DeFi protocols.

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3. Smart Contracts and Automation

Through smart contracts, the RWA trading process can be automated. Smart contracts are self-executing protocols that allow the parties to automatically execute contract terms when conditions are met. Smart contracts can ensure the transparency and security of transactions, and reduce human intervention or errors.

For example, in the tokenization of real estate, smart contracts can automatically complete operations such as asset transfer, dividend payments, and rental distribution.

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4. Improve liquidity

Traditional assets (such as real estate or private equity) have relatively low liquidity and usually require a long time to trade. However, through Web3 and blockchain technology, RWAs can be easily traded globally, greatly increasing their liquidity. For example:

Divide assets into small tokens, allowing investors to make micro-investments.

A blockchain-based market that provides 24/7 trading opportunities without the constraints of traditional markets.

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5. Globalization and Borderless

Through Web3 and blockchain, RWA transactions are no longer confined by the laws of specific countries or regions and traditional financial systems, allowing global investors to participate in transactions. The decentralized nature of blockchain eliminates many barriers in cross-border transactions, such as exchange rate issues and bank transfer restrictions.

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6. Transparency and Security

Blockchain technology provides immutable transaction records and high transparency. All transactions and asset transfers can be publicly viewed and cannot be tampered with. This transparency enhances user trust in RWA transactions, while the encryption mechanism of blockchain ensures the security of transactions.

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7. Compliance and Regulation

Although Web3 offers many advantages in terms of freedom and decentralization, the transactions of RWAs still need to comply with the laws and financial regulations of various countries. Therefore, some projects have specifically designed solutions that comply with local regulatory requirements in order to legally put RWAs on-chain. For example, certain asset tokenization platforms may require identity verification, KYC (Know Your Customer), and AML (Anti-Money Laundering) checks to ensure compliance.

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Summary

RWA refers to traditional assets (such as real estate, stocks, commodities, etc.) that are digitized and tokenized using Web3 and blockchain technology for trading and management on decentralized platforms. Web3 technology not only enhances the liquidity and transparency of these assets but also enables global users to participate in the investment and management of these assets, while providing a more efficient and secure trading experience. Through tokenization, smart contracts, and DeFi, traditional assets can flow more freely in decentralized ecosystems.