Index Coop Launches New Real-World Asset Crypto Token

The term "RWA" (Real-World Assets) in DeFi can be confusing. Traditionally, in finance, "RWA" stands for Risk-Weighted Assets, used to determine capital requirements. In DeFi, RWAs include a range of assets like real estate, commodities, and bonds. Despite the confusion, RWAs are becoming a significant part of the crypto narrative.

To simplify access to RWAs, Index Coop has introduced a Real World Asset Index Token. Developed with Fortunafi, a leading DeFi methodologist, the index includes Maker (MKR), Ondo Finance (ONDO), Ethena (ENA), Centrifuge (CFG), Canto (CANTO), and Maple Finance (MPL). These projects offer diverse RWA-linked investments, from real estate tokenization to US Treasurys and tokenized futures.

Similar to the High-Yield ETH (hyETH) index, Index Coop uses Product Revenue Tokens (PRTs) to attract early investors. PRTs give holders a share of the index's revenue and are distributed through a presale over the next 30 days. The presale will determine if the RWA index launches. This model succeeded with hyETH, which launched with about $5 million in total value locked (TVL) and is yielding around 9% APY, though lower than initially expected due to reduced demand for leverage.

PRTs aim to reward early investors generously. However, Index Coop learned from the hyETH launch that focusing solely on TVL isn't enough. Crews Enochs, Index Coop’s ecosystem growth lead, stated that the new iteration will also incentivize behaviors that add more value, such as enhancing market liquidity, securing oracle services, and integrating with other DeFi apps like borrowing and lending markets.

Initially, both the RWA and hyETH indexes are on the Ethereum mainnet, but plans are in place to expand to layer-2 solutions. Chainlink’s CCIP-based Transporter bridge will eventually provide access to hyETH.

RWAs are becoming more integrated into DeFi, offering new investment opportunities. Index Coop’s Real World Asset Index Token aims to make accessing this asset class easier, partnering with Fortunafi to create a comprehensive product. The inclusion of various projects provides broad exposure to different RWA-linked investments.

PRTs are crucial for attracting early investors. These tokens give holders a share of the revenue generated by the index, with the presale serving as an initial demand signal. The RWA index will launch only if the presale is successful. This model was effective for hyETH, which, despite yielding lower-than-expected returns, showed strong investor interest with $5 million in TVL.

The hyETH launch highlighted the need to incentivize more than just TVL. Crews Enochs emphasized the importance of rewarding behaviors that add value, like improving market liquidity, securing Oracle services, and fostering integrations with other DeFi applications. This approach aims to create a more robust and valuable product for investors.

The RWA and hyETH indexes are currently on the Ethereum mainnet, but there are plans to expand to layer-2 solutions. Chainlink’s CCIP-based Transporter bridge will facilitate access to hyETH, showing potential for further growth and integration in the DeFi ecosystem.

Index Coop’s Real World Asset Index Token marks a significant step in integrating real-world assets into DeFi. By partnering with Fortunafi and learning from the hyETH launch, Index Coop aims to provide investors with diverse and valuable opportunities. The use of PRTs to attract early investors and the focus on incentivizing valuable behaviors demonstrate Index Coop's innovative approach to expanding DeFi. The success of the presale will determine the RWA index's launch, while plans to expand to layer-2 solutions indicate a promising future for continued growth and integration.