Polkadot’s Web3 Foundation Dives into Real-World Assets with $1M Investment

• Web3 Foundation, a Polkadot outfit has invested $1M in Anemoy, a Centrifuge RWA platform.
• The injection trails similar moves from top protocols like Maker and Avalanche to get on the tokenization train.

The Web3 Foundation, the key driving force behind the innovative Polkadot network, has embarked on a new journey by investing $1 million to push the development and adoption of Real-World Assets (RWAs).

According to reports, this strategic move aligns with the foundation’s vision of fostering growth and innovation within Polkadot’s infrastructure. The investment, channeled through Centrifuge Chain’s Anemoy platform, marks a step towards bridging the gap between traditional finance and decentralized ecosystems.

This gesture is notably not yet reflected in Polkadot’s price, the cryptocurrency that stands a lot to gain with the move in the long run. Currently, Polkadot is trading at $5.2, marking a decline of 2.49 percent in the last 24 hours. However, market capitalization stands at $6,533,556,655, while 24-hour trading volume is $157,560,637.

Web3 Foundation’s Strategic Partnership

Lucas Vogelsang, the co-founder of Centrifuge, highlighted the potential of the collaboration, stating,

With this collaboration between Centrifuge and Web3 Foundation, the stage is set for significant growth and innovation for real-world assets using Polkadot’s infrastructure and technology.

According to the update, the Web3 Foundation’s investment will be directed toward Anemoy’s upcoming Liquid Short Treasury Fund. This fund aims to facilitate access for Decentralized Autonomous Organizations (DAOs) and other investors to short-term U.S. Treasury bill yields.

The Web3 Foundation’s $1 million pilot investment signals the beginning of a broader initiative, according to Fabian Gompf, the foundation’s recently appointed chief executive. He hinted at plans to substantially increase the allocation to real-world assets in the future, emphasizing, “$1 million is a start, and we fully expect to quickly grow beyond that.”

Anemoy, as the first asset issuer native to Centrifuge Chain, promises to bridge the gap between traditional finance and Decentralized Finance (DeFi). Centrifuge’s announcement of testnet deployments for its new RWA Liquidity Pools on leading Ethereum Layer 2 networks reflects the increasing demand for related investments in the Web3 world.

Rising Tide of Real-World Asset Adoption

This move aligns with the growing trend of real-world asset adoption across the Web3 space. MakerDAO, a prominent player in the DeFi sector, led the charge last year by injecting up to 500 million USDC into U.S. treasuries. MakerDAO’s RWA exposure skyrocketed from $17 million to $640 million in 2022, showcasing the increasing demand for these assets.

Surprisingly, despite comprising just 10 percent of MakerDAO’s asset holdings, RWAs contributed nearly half of the project’s revenue for the year. MakerDAO has continued to expand its RWA exposure, with the current total reaching an impressive $2.8 billion.

Avalanche, another blockchain platform, also entered the RWA space by launching a $50 million fund to invest in natively tokenized assets, including equity, credit, and real estate assets. Additionally, Frax announced plans to custody on-chain RWAs, further underlining the growing interest in this sector.

Arkefi, an AllianceBlock initiative, is also democratizing high-value RWA investments through the use of Web3 technology and decentralized finance. Arkefi enables traders to participate in the investing market for tangible assets such as art, cars, and collectibles, including High-Net-Worth Individuals (HNWIs) and crypto enthusiasts.

Furthermore, the XRP Ledger (XRPL) is also making waves in the RWA tokenization race. Ripple’s CTO, David Schwartz, has emphasized XRPL’s evolving focus on real-world asset tokenization, positioning it as a formidable player against traditional financial giants.