The ever-evolving crypto landscape has unlocked multiple monetization avenues for investors, helping them generate active and passive income. In this constantly evolving landscape, two distinct contenders emerge as trendsetters, keeping investors on their toes – Memecoins and RWA (Real World Assets). For crypto enthusiasts exploring investment opportunities, making a choice between the two could be challenging, given the unbeatable hype of the two trends.
The Rise of Memecoins
The crypto bull run that began in mid-2020 and lasted till 2021 triggered a mass adoption of cryptocurrencies. Amidst a prolonged sideways movement of established tokens like Bitcoin and Ethereum, gaming tokens like Axie spearheaded skyrocketing booms. At the same time, memecoins helped investors multiply their gains. The market cap of the memecoin market is just $18.12B, representing 1.52% of the total cryptocurrency market cap.
Memecoins Off To A Flyer
The memecoin story got its wing after Elon Musk backed the popular memecoin Dogecoin on several occasions, triggering multiple rallies and creating several overnight millionaires. As of now, Dogecoin has a market cap of over $9.7 billion. If offered over 12,000% in returns during the peak of the 2021 bull run. If you invested $1,000 at the beginning of 2021, it would be worth $121,052 just six months later. In fact, $DOGE is ranked 7th on CoinMarketCap, ahead of the likes of Cardano and Solana.
Following the suit is another giant memecoin project – Shiba Inu. Shiba Inu has a market cap of over $5.7 billion and is ranked 13th on CMC. The recent addition to the list is $PEPE, with a market cap of over $479 million. $PEPE recently rallied 7500x, taking the crypto world by storm.
The Problem With Memecoins
Despite all the hype, memecoins are unlikely to emerge as a long-term investment alternative as they are not backed by a real-world asset. When it comes to fundamentals, memecoins lack substance. Thus, maximalists have little data to push memecoins ahead.
The biggest challenge for crypto investors in 2023 is to differentiate between genuine investment opportunities and speculative bubbles fueled solely by social media hype. So where to find a reliable income generation option?
Enter RWA: Real World Assets Make Generation Wealth
RWAs (Real World Assets) are exactly the opposite of memecoins. They are backed by real-world assets. Meaning they bring along long-term utility. The concept of RWA aims to marry the revolutionary potential of blockchain technology with tangible assets such as real estate, commodities, and even fine art.
Traditionally, real-world asset classes like real estate have been infamous for limited accessibility and transparency. Blockchain eliminates these challenges by offering greater accessibility and transparency, unlocking access to a wider range of investors.
Tokenized real estate projects like Landshare are spearheading the RWA movement, helping investors use cryptocurrencies to invest in tangible assets such as real estate. Landshare ($LAND) is an undervalued gem with a market cap of just $2.4 million.
This is when the platform only has properties from the US listed for sale. With plans to expand across the globe, it is an ROI landmine waiting to explode. It is the first project to sell property on the Binance Smart Chain, redefining how real estate deals happen. Landshare unlocks borderless access to properties in different parts of the world, offering up to 15% APR (nearly 2x of the average ROI on staking). Most importantly, it is fully regulated in the US.
Another undervalued tokenization gem is Maple Finance. It is an institutional cash management solution providing institutional investors with access to undercollateralized loans. The concept revolves around accessible lending pools that are open for investment to anyone. Individuals can opt to place their funds into any preferred lending pool, effectively offering their cryptocurrency assets for lending, and in exchange, they have the opportunity to earn a yield. Maple Finance ($MAPLE) has a market cap of over $21 million.
Creditcoin is another tokenization project picking up pace. It connects investors and lenders with fundraisers or borrowers who share similar loan requirements. Creditcoin leverages blockchain technology to securely document credit-related transactions, thereby minimizing expenses linked to verification and risk evaluation. With a market cap of $45.84 million, Creditcoin ($CTC) is already off to a flyer.
Memecoins vs RWAs
As of 2021, the tokenization market was valued at $2.28 billion. It is growing at a CAGR of over 19%. Meaning by 2030, the tokenization market will dwarf the memecoin market.
While memecoins are only backed by hype, RWA tokens have real-world assets backing their value. Besides real-world value, there are several reasons RWAs could help investors grow their investment steadily to create generational wealth. Here are some of the top reasons:
Tangible Backing and Stability: Real World Assets (RWAs) offer something that Memecoins can’t match: real-world value. RWAs are often backed by physical assets like real estate, commodities, or art. This means there’s inherent stability since their value is tied to something tangible. In contrast, Memecoins can be incredibly volatile due to their reliance on social media trends and internet culture.
Diversification with Real-World Exposure: By investing in assets like real estate through the blockchain, you’re getting exposure to traditional markets in a modern way. This diversification can help mitigate risks, as the real estate and commodity markets often have a track record of stability over time.
Be it staking pools with an average ROI of 6.28%, centralized exchanges going bankrupt due to illegal practices, the epic collapse of Voyager, or a leading DeFi protocol like Curve falling prey to an exploit worth $62 million, there are alarming signs calling for diversification toward a comparatively stable asset class bound to real-world assets with real-world utility.
Transparency and Regulation: RWAs operate within more regulated frameworks. Governments and financial authorities are increasingly recognizing the potential of blockchain for real-world assets, leading to regulatory advancements. This adds a layer of legitimacy to RWAs and promotes transparency and accountability.
Final Word
In conclusion, choosing RWAs over memecoins means choosing stability and long-term gains over periodic hype with an expiry date. Be it a bear run or inflation, the value of real-world assets is highly unlikely to bite the dust. Also, a rug pull is impossible in the case of RWA tokens. Thus, investors have a lot to gain by becoming early adopters of RWA tokens.
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