The RWA Market is live: What’s next?

Hi Aave community, I am Anna, contributor at Centrifuge and helped to build the RWA Market, and wanted to share some milestones the RWA Market has achieved in the last three weeks and give an outlook on what’s coming next. The RWA Market is the first diversified real world asset market on the Aave Protocol, bridging DeFi to the infinite potential of the real-world.

It was launched on 28 December 2021 and has already surpassed the 10M market size milestone and now has a market size of 12,432,343.32 USDC.

Some highlights so far

  • On January 4th the RWA market, powered by Aave and Centrifuge, made history by lending the first $1M USDC against real-world assets tokenized by Centrifuge.
  • Today five issuers have borrowed 3.74M USDC so far. The RWA market has a current utilization of 45.25%.
  • Last week the real-world businesses borrowed another $1M from the RWA Market. These businesses touch people’s everyday lives and this makes DeFi lending more equitable today.
  • The RWA Market has a Twitter account @RWA_Market. Make sure to follow so you don’t miss out on latest updates and trades that happen on the RWA Market.

What’s coming next?

The launch of the RWA Market was kicked off in December 2021, but that’s only the beginning. We are looking to grow the market, build better processes and bring Aave governance into the market:

  • Building a community: uniting the Centrifuge and Aave community
  • Integrate the RWA Market into different frontends, let’s get this into Zerion, Instadapp, DeFiSaver
  • Sketch a governance process for collateral onboarding with the Aave token holders
  • Onboard new collateral (there are new pools that want to get onboarded to the market)

Where to learn more about the collateral?

You can learn more about the different DROP tokens and issuers on where every asset originator explains the use case of their real world assets and in the Centrifuge forum where there is a dedicated category that is used for updates from and discussion around Tinlake issuers.

Let me know if you have any questions!


Wow, a real world AAVE market? How have I not heard about this :thinking:

I have done some research, but I can’t really wrap my head around what exactly those tokenized assets represent. Could you explain to me what they represent? The LTVs are really high, so they must be very low risk assets.

Connecting smart contracts to the real world is a really amazing thing

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Hey, you can read quite a bit about the different pools here: Pools - Centrifuge Governance Forum - they’re all really different. The assets vary, but include real estate, consumer loans and trade finance.

But yes, the LTVs are really high but that’s totally fine. There are two reasons why:

  • because they’re very stable
  • because they’re structured: the tokens that are collateral are the senior tranche, this means they are already overcollateralized on average by 12%.

The tranching works by selling two different tokens to investors that like stable low risk and others that like high yield and high risk. The high risk investors take the first loss and thus are effectively overcollateralizing or insuring the senior investors:

You can read about how tranches work here:

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Hey @anna, this is super exciting. Glad to see RWAs alive and well on Aave.

I’d be curious to understand how user behavior differs from those on Maker.

A few questions about the metrics you’ve reported and overall strategy:

Would you like to see a wider diversity of issuers? Or is utilization rate the paramount metric?

Second - is there a clear preference for a specific RWA market? If so, are you able to strategically incentivize a larger market and more asset originators for that asset class?

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Hey @fig, I’m really excited, too!

Short and long-term the plan is to onboard more issuers to the RWA Market with different assets. The utilization rate is one metric of many.

As Lucas mentioned we have different assets but don’t have a preferred asset class that we strategically incentivize.

Hello Could you allow deposit USDC deposit on Moonbean (and not on Ethereum).
Please. Ethereum is so expensive

Hello @anna

Can you explain how to borrow against centrifuge tokens? When you say five issuers have borrowed 3.74M USDC, are you referring to token holders, or the pool issuers?

Thank you

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Hi @precap,
I’m referring to the pool issuers. Each issuer has their own token. The different DROP tokens are deposited on the RWA Market and in return the pool issuers can borrow USDC.

Ok, so this would apply only to DROP tokens that the pool issuer retains and does not sell then?

Can you direct me to the documentation that defines what an issuer is?

Here is an article in the Centrifuge documentation how to assess a pool.

Ok, so this would apply only to DROP tokens that the pool issuer retains and does not sell then?

Investors often want different kinds of risk exposure and yield on the same asset class. In the traditional finance world, one way to achieve this is by using structured finance products and introducing a tiered investment structure or in other words, different tranches. This means that investors can invest in the same asset through different classes of shares with different risk/return profiles. Centrifuge implements this functionality by offering the option to issue two tokens, the Tin and Drop tokens, which behave very similarly to how tranches work in the traditional finance world.

Coming back to your question, when investing DAI into a pool you’ll receive DROP tokens in return.

Here is an example of the New Silver Pool where the Senior tranche is worth 21,412,551 DAI and the NS2DRP token price is 1.047 DAI. When the issuer/pool borrows from RWA Market it translates that the RWA Market invests in the senior tranche of the specific pool, deposit the DROP in the RWA Market UI, and is then able to borrow the USDC amount - overcollateralization.

You can read more about DROP Tokens and tranches here:

I am asking for your definition of an issuer. Some pools have issuers and pool managers that are listed as issuers.

Can you direct me to the documentation that defines what an issuer is?

I am asking for your definition of an issuer. Some pools have issuers and pool managers that are listed as issuers.
Can you direct me to the documentation that defines what an issuer is?

Hi @precap - I hope this explanation helps!

Entities involved in Tinlake pools


The legal entity (usually a special purpose vehicle - “SPV”) that “holds” the assets, draws down the financing from Tinlake, issues TIN/DROP tokens in return for investments and legally manages the pool.

Asset Originator

The Asset Originator originates real-world assets and pledges these to the Issuer in return for financing. For some pools, Asset Originators set-up a dedicated SPV to act as their issuer. For other pools, an issuer can also have several different Asset Originators originating assets for a Tinlake pool.

Tinlake Investors

Tinlake investors provide the liquidity that issuers use to finance assets and in return earn yield and CFG rewards… For every Tinlake pool, investors can invest in two different tokens, TIN and DROP, similar to Junior/Senior investment structures common in traditional finance [see below].

You can read more in our documentation:

Thank you for the explanation, that is very helpful.