Current Market Challenges

The management and trading of real-world assets (RWAs) face significant challenges in today’s market. These challenges stem from the inherent complexities of dealing with physical assets and the limitations of traditional financial systems. Key issues include:

1. Illiquidity: Many real-world assets, such as real estate, luxury goods, and private equity, are inherently illiquid, making it difficult for owners to quickly sell or transfer these assets without significant discounts or delays.

2. High Entry Barriers: Investing in high-value assets often requires substantial capital, limiting access to a small group of wealthy investors and excluding a broader audience who might benefit from diversification.

3. Lack of Transparency: Traditional asset management systems are often opaque, with limited visibility into asset provenance, transaction history, and market valuations. This lack of transparency can lead to mistrust and inefficiencies in the market.

4. Complex and Costly Transactions: The process of buying, selling, or transferring ownership of real-world assets is typically complex and involves multiple intermediaries, leading to high transaction costs and lengthy settlement times.

5. Geographical and Regulatory Fragmentation: Real-world assets are subject to varying regulations across different jurisdictions, complicating cross-border transactions and limiting global market access.

6. Limited Market Access: Smaller investors and participants often find it difficult to access certain asset classes due to financial, regulatory, or geographical barriers, which restricts their investment opportunities and potential returns.

These challenges highlight the need for a more efficient, transparent, and accessible system for managing and trading real-world assets, one that leverages modern technology to overcome the limitations of traditional financial markets.