Where is the Money, Where is the Value? A Look at the Future of Assets
What is an Asset?
The concept of assets is quite broad and inclusive. However, in line with our area of interest here, it is easier to address assets under two main headings:
- Assets with a tangible counterpart
- Assets without a tangible counterpart
The focus of this study is on elements that fall under the category of real-world assets. Real-world assets encompass everything in the physical world that is owned by real or legal persons, carries economic value, and can provide benefits. These assets are directly physical in nature. In addition to these, there also exist financial instruments whose value is derived from these real-world assets or from defined economic rights.
Real World (Tangible) Tangible Assets
All elements that can be touched, whose physical existence cannot be denied, and that can be associated with economic value are evaluated under this heading. This includes commodities, land, buildings, minerals, machinery, and similar physical assets. The common feature of these assets is that they create value through production, use, or ownership.
Financial Assets
Financial assets constitute the monetary and contractual layer built on top of the real economy. Although they do not have a physical structure, they represent economic value and can usually be converted into cash quickly.
Examples include stocks, bank deposits, bonds, and investment funds. These assets create a claim on a company’s future cash flows or rights. In other words, financial assets are based on their economic value or return potential rather than physical tangible assets.
Developments in technological and financial infrastructure over the last century have made financial assets an indispensable part of the tangible asset system.
Financial Assets from an Individual and Corporate Perspective
For individuals:
- Providing liquidity for urgent needs
- Protecting savings against inflation
- Managing risk by diversifying investments
- Building savings for long-term goals (retirement, education, major expenses)
In this way, financial assets enable individuals not only to save but also to build financial security for the future.
For corporate structures:
- Capital raising
- Investment and growth financing
- Increasing market share
- Working capital required for daily operations
From a corporate perspective, financial assets transform money from merely a medium of exchange into a store of value, an investment vehicle, and a risk management tool.
Crypto assets occupy a unique position within traditional asset classifications. They are neither like traditional financial assets nor do they fall under the category of tangible physical assets. However, due to their ability to generate economic value, be bought and sold, and provide liquidity, they can be evaluated as a new category of digital financial assets.
Their independence from central authorities also makes it appropriate to classify crypto assets as a separate subcategory under financial assets, termed “Digital Financial Assets.”
Digital Financial Assets
Although crypto assets are mostly defined as financial instruments, the rights they offer, their purpose of use, and the value they represent are directly related. They can be used as transaction fees in payment systems, provide access to certain services, enable cross-border fast transfers, and function as a store of value.
This multi-layered and flexible structure allows tokens to represent not only their value within the digital ecosystem but also tangible assets in the real world. This is how the concept of RWA (Real World Assets) came into being and gained acceptance.
Real World Assets (RWA)
RWAs refer to the digitization and tokenization of physical or traditional financial assets in the real world via blockchain. The high costs, limited liquidity, and geographical access issues associated with traditional assets have created a need for RWA solutions.
This enables assets to become divisible, transparent, programmable, and accessible on a global scale. A new financial layer is created for both individual and institutional investors. Blockchain not only creates digital assets but also facilitates the faster and lower-cost circulation of assets based on real economic value.
ONDO
ONDO is a project operating in the RWA space. Its goal is to tokenize low-risk, high-yield assets from the traditional financial system via blockchain.
By offering tokens representing traditional financial products such as US Treasury bonds, it enables users to earn regular returns on the chain. This bridges the gap between blockchain and traditional finance, creating a functional link between decentralized finance and traditional finance.
PAXG
Gold, one of the most well-known and valuable metals among real-world assets, stands out as a globally accepted asset. Although it belongs to the class of tangible assets, its historical use as a financial instrument is one of the key factors that distinguishes gold from similar assets. The roles it has assumed as a store of value, an investment vehicle, and a central bank reserve asset have enabled gold to transcend being merely a physical commodity, making it one of the structural components of the financial system. This multi-layered position places gold in a unique position in terms of both the real economy and financial markets, making it a comprehensive asset class with different uses and sub-headings within itself. In this context, the PAXG project, which enables the representation of gold on the blockchain, allows investors to access a secure, liquid, and programmable gold asset through a token backed by physical gold.
PAXG’s RWA Positioning
PAXG is an RWA (Real World Asset) token created by representing physical gold on the blockchain. It offers investors a digital asset based on the secure and physical value of gold, combining the trust and stability provided by traditional gold investment with the accessibility and liquidity brought by blockchain. In this regard, PAXG is not just a digital investment vehicle; it also acts as a bridge that brings real-world assets into the crypto ecosystem. Its foundation is real physical gold reserves. Each token is designed to have a specified amount of gold behind it and is regularly verified by independent auditors. This structure offers token holders not just a digital asset, but also the opportunity to own an RWA backed by tangible economic value. Compared to traditional gold investments, it is faster to buy and sell, globally accessible, and liquid. This feature positions PAXG as a real asset-backed, liquid, and secure financial product within the RWA category.
