Asset Quality and On-chain Liquidity Risk of Real World Asset (RWA)

Level: MA/BA
Responsible person: Tao Yan
Keywords:  Blockchain, Real World Assets, liquidity risk

Real World Asset (RWA) refers to physical or traditional financial assets, such as treasury bills, real estate, commodities, or credit portfolios that are represented as digital tokens on a blockchain. This study aims to examine the relationship between RWA asset quality and on-chain liquidity risk. Specifically, how are the on-chain activities and liquidity status of RWAs? How does the quality of off-chain collateral affect the liquidity of its on-chain representation?  

Students will explore the mechanisms and risks associated with RWA tokenization by collecting both on-chain and off-chain data, modeling transaction behaviors, and assessing liquidity risk. The final goal is to provide analytical insights and risk protection strategies for RWA markets. 

References: 

[1] Chen, S., Jiang, M., & Luo, X. (2024, November). Exploring the Security Issues of Real World Assets (RWA). In Proceedings of the Workshop on Decentralized Finance and Security (pp. 31-40). 

[2] Laschinger, R., Leonhard, H., Dorfleitner, G., & Schäfers, W. (2024). Liquidity Mechanisms in Real-World Assets: The Empirical Case of Real Estate Tokenization. Available at SSRN 5036350.