November 29, 2023

By tokenizing real-world assets (RWA), DePIN can power anything

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By tokenizing real-world assets (RWA), DePIN can power anything

In a nutshell: RWA tokenization will help DePINs power anything in the world by making even the costliest hardware, from solar panels to self-driving vehicles and autonomous trucks, into a dynamic liquid asset that the community can crowdfund and own.

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A diamond in the buzz

You’ve seen the trend before — whenever a cryptic acronym like DePIN or RWA pops up in everyone’s timelines, the Web3 world is jumping aboard. While some people may roll their eyes at this buzz and commotion, others will catch the ideas that can change the world. And trust us, when it comes to the intersection between real-world asset (RWA) tokenization and Decentralized Physical Infrastructure Networks (DePIN), that is very much the case.

By tokenizing real-world assets, DePIN can power anything in the world.

But before we get into the large-scale vision, we have to understand the nitty gritty.
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What is RWA Tokenization?

Tokenization is representing physical, real-world assets on a blockchain as tokens, which enhances liquidity and democratizes traditional financial markets. Hard to digest? No worries — let’s break that down.

When tokenizing a real-world asset, you represent certain rights to it as a digital token on a blockchain. In other words, you are transforming tradable assets or rights to assets into digital form, making them easily transferable and divisible over blockchain networks.

Tokenized assets can be anything from real estate and stocks to digital goods, or as in the context of the Economy of Things, connected machines, vehicles, robots or devices. These assets are represented as tokens for people to trade, sell, use, or earn from without having to rely on a centralized intermediary.

Let that sink in: In the Economy of Things, Web3 allows us to tokenize any sort of connected machine, vehicle, robot, or device, so that we can own and earn from it, either individually or as communities. Machines are value creators, they’re independent economic agents, they’re service providers, and they’re providing services to communities, not just individuals. In other words, any tokenized machine can be considered a machine RWA.

RWA tokenization makes even costly things, like vehicles or solar panels, affordable for everyday investors, and also makes these assets easier and faster to sell (or more liquid, in finance speak). Imagine being able to invest literally in anything and everything in a market that promotes transparency and ownership, and works 24/7, all without the regular TradFi hurdles. Cool, huh? Now we’re talking!

What is a DePIN in Web3?

Decentralized physical infrastructure networks (DePIN) is the name for blockchain networks that use tokens to incentivize communities to build physical infrastructure networks from the ground up. These infrastructure networks include connected machines, devices, vehicles, or robots that provide goods and services to people and machines in the real world.

Think about things like car sharing, weather data, pollution monitoring, and electric vehicle charging. All of the platforms that support these services and functions are cradled by centralized tech companies. peaq is breaking the chains to remove the Big Tech middleman so you can directly benefit from the devices you own and the data you already collect.

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DePIN + RWA + AI = A Golden Economy of Things

Real world asset tokenization solves a major pain point for DePINs: the cost of entry. For some DePINs, people only need access to a personal smartphone, something that’s easy for most of us, but others require expensive hardware and machines. Incentivizing people to buy trucks for a cargo carrier DePIN is a tricky thing to pull off, as the rewards would have to be humongous to justify this purchase — as long as this purchase is made by a single person. RWA tokenization eliminates this barrier by enabling a community to raise funds collectively, by tokenizing what is normally an expensive piece of equipment and offering the earnings to Web3 investors.

The ongoing AI boom is taking all this to a whole new level as more machines become autonomous, self-standing economic agents. However, these self-standing agents tend to be costly —- unless they are tokenized to become Machine RWAs, collectively funded and owned by a community that earns from their economic activity.

All of this makes for a colossal boost for the DePIN market, which is already projected to hit at least $3.5 trillion by 2028. Various industries are already getting the benefits of DePIN, with mobility as a service projected to grow from $5.7 billion in 2023 to $40.1 billion by 2030. The sensor sector is also predicted to hit massive growth, reaching over $30.5 billion with the combination of global environment monitoring and Intelligent Transportation Systems.

With RWA tokenization, the DePIN model makes sense not just with affordable devices that anyone can deploy, but literally with anything you can connect to the Web and have it create real-world value. From self-driving cars to entire smart farms, automated cargo planes, and even spaceships, anything can work as a part of a DePIN if the initial entry barrier is removed through funds raised via RWA tokenization.

To reiterate: RWA tokenization and DePIN can power anything in the world, and peaq is proving it.

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