There is still a big gap between traditional finance and new concepts making inroads in the DeFi sector. Finding a way to overcome the differences will prove crucial to achieve financial innovation. OpenDAO aims to become that bridge between real-world assets and decentralized finance.
A Modern Era for Real-world Assets
Any asset that exists in physical form in the real world can be digitized to suit the needs of modern finance. To do so, powerful solutions need to be created to focus on transparency, fairness, and ease of use. Digitizing these real-world assets to trade them on a blockchain is a concept that has been a topic of discussion since 2017.
Companies such as IBM have high expectations of seeing this process established sooner rather than later. The technology giant sees merit in this concept as a way to accelerate the exchange of value. In the company’s opinion, token-based assets can gain widespread acceptance relatively quickly.
Exploring Options in DeFi
The recent growth of decentralized finance has shown the world the exchange of value can take place in many different formats. Although the top projects currently focus on existing crypto assets and new blockchain-based currencies, that is not all that can be achieved. Bringing real-world assets into the world of decentralized finance can unlock a lot of potential use cases that were previously not even considered.
OpenDAO aims to become the bridge between these real-world assets and DeFi. Through the platform, it becomes possible to tokenize stocks, bonds, and real estate, among other things. Keeping in mind how there are trillions of dollars of real-world productive assets, there is a lot of liquidity to be explored.
Statistics by Visual Capitalist confirm there is $280.6 trillion in global real estate alone. This only represents a sliver of the real-world asset liquidity that OpenDAO wants to tap into.
What OpenDAO can Achieve
The tokenization of real-world assets is only one facet of what OpenDAO aims to achieve. The project wants to democratise access to returns that would normally only be issued to the world’s elite; Evening the financial playfield for everyone will trigger a redistribution of wealth, and bring more value on-chain than ever before.
Through the native OpenDAO stablecoin, anyone in the world can tap into the value derived from real-world assets. Exposing one’s portfolio to real estate, stocks, and bonds from anywhere in the world are just a few of the options to be explored.
This approach works both ways. Anyone with real-world assets can tokenzie their wealth and use them as collateral at competitive rates through OpenDAO. In a way, this will allow people to become their own bank, without worrying about licenses or government approval. The APY offered to liquidity providers for real-world assets in the near term will range from 13% to 20% (currently at around 9%.) Compared to keeping funds in a savings account, this option is considerably more lucrative.
To power the exchange of these tokenized assets, OpenDAO makes use of the Cash Box system. Think of this solution as a decentralized order book, where all participants are rewarded for helping to build it up with liquidity and demand. Furthermore, this allows for open price discovery without having to rely on centralized infrastructure.
OPEN and Stable Coin Assets
OpenDAO has its native token, called OPEN. Owners of this token are automatically owners of the DAO, and it provides them with governance rights. This includes voting on which new assets to be onboarded, what fees DAO participation will incur, and being a part of what may be a new financial revolution. The OPEN token can also be staked on the platform for rewards, and soon, dividends in the form of stable coins.
Another interesting currency created by the OpenDAO platform is its native stablecoin. Contributors with productive assets can mint this stablecoin that serves as sound modern money. The minting of the coin depends on the collateral factors as described by the DAO. Furthermore, this new coin is censorship-resistant, backed by collateral, can be exchanged, and allows for permissionless global transfers.
Any project that wants to bring real-world assets to decentralized finance has the potential to tip the scales of the entire world of finance. OpenDAO provides an approach that is very different from what has been attempted before. High PAY for liquidity providers, and the option to create a new stablecoin by providing real-world assets, are two core benefits.
To take DeFi into the mainstream, there need to be real-world incentives to tap into. Offering a solution to tokenize and digitize real-world assets is a first step toward achieving broader interest in decentralized finance.