Decrypt’s Art, Fashion, and Entertainment Hub.
Backed Finance launch of a tokenized government bond on the layer-2 network Base.
But that's just the beginning, Backed co-founder Adam Levi told Decrypt.
"We can tokenize anything held in a bank account–and we look forward to expanding our product offering," he said. "Organizations benefit from not having to interface with TradFi or develop their own legal process by working with Backed for RWA tokenization."
RWA stands for real-world assets, like equities, commodities, art, or collectibles. Base is the -incubated layer-2 network built using Optimism's OP stack–it's yet another rollup of the optimistic variety aimed at lowering costs and easing congestion on Ethereum.
Levi told Decrypt that the work with Base kicked off in February this year, adding that Backed was particularly interested in working with the network because of its "promised support for builders and developers."
The addition of RWAs, is a first for the speedy blockchain network, but it comes at a time when the asset class and tokenization movement has taken center stage of late.
With interest rates high and crypto prices low, various decentralized finance protocols, namely Aave and Maker, have turned to RWAs to generate revenue for the protocols. Maker, for example, has already integrated U.S. treasuries to generate yield on its native stablecoin called DAI.
"Right now, fixed-income products seem to be in the most demand, and recently protocols and users have shown specific interest in non-USD denominated short-term bonds," said Levi.
As for when a tokenized Google or Tesla will hit the blockchain, he said his team is still waiting on interest in the market. "If there is demand, we are happy to tokenized any security that is requested."
Perhaps by then American investors will also be able to participate. For now, U.S. investors are intentionally blocked from trading any of Backed's tokenized offerings.