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The RWA Market is intended to enable users to earn yield against non-crypto assets.
Centrifuge, a platform that allows real-world assets to be bridged to DeFi protocols, has announced a collaboration with Aave to launch its Real World Assets Market.
Centrifuge announced Tuesday morning in a Medium post that its Real World Assets (RWA) Market on Aave had officially launched. These real-world asset markets allow investors to earn yield against real-world assets that are not correlated to crypto assets.
The Aave protocol allows investors to borrow tokens against collateral they deposit, with interest rates fluctuating depending on supply and demand. Owners of real-world assets can create asset pools (e.g., a real estate pool) from which other investors could buy tokens by depositing stablecoins into the pools. These deposited stablecoins can then be borrowed against the real-world assets.
Centrifuge’s RWA Market also includes non-crypto assets like tokenized Real Estate Bridge Loans and Cargo and Freight Forwarding Invoices.
The founder of Aave, Stani Kulechov, said:
“The RWA Market is a much needed building block not only for protocols such as Aave, but across DeFi as a whole. Knocking down barriers of entry and making DeFi accessible to all is part of the Aave Companies’ vision, and we are excited to be fulfilling this through the collateralization of real-world assets, made possible by Centrifuge.”
This is not the first time Centrifuge supported the bridging of real-world assets to the DeFi sphere. It announced its introduction of real-world assets as collateral for Maker in April. The Centrifuge platform currently has over 50 million DAI (the Maker Protocol’s Ethereum-based stablecoin) in total value locked, with a current estimated yield of 24% annually.
Aave has frequently helped increase the options afforded to DeFi users. Earlier this month, another DeFi staple, Balancer, launched Boosted Pools with Aave, potentially allowing liquidity providers to attain higher yields.
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