# What Are Real-World Assets (RWAs)?

Real World Assets (RWAs) in Web3 refer to fungible or non-fungible tokens specifically designed to represent traditional assets on a blockchain. This innovative approach aims to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi), showcasing significant potential for value creation within the Web3 ecosystem. By leveraging tokenization, any real-world asset can be transformed into a digital representation, providing new opportunities and advantages to users.

Tokenized Real-World Assets (RWAs) are digital tokens on a blockchain that represent physical and traditional financial assets, such as cash, commodities, equities, bonds, artwork, and intellectual property. This tokenization signifies a transformative shift in how these assets can be accessed, exchanged, and managed, creating new opportunities for both blockchain-based financial services and various non-financial use cases underpinned by decentralized consensus.

The concept of asset tokenization stands out as one of the most promising applications of blockchain technology, with a potential market size that encompasses nearly all human economic activity. As the future of finance moves on-chain, we anticipate the emergence of numerous blockchains facilitating trillions of dollars in tokenized RWAs through interconnected blockchain and distributed ledger technology networks that adhere to a universal interoperability standard.
