EXCLUSIVE: Mantra Aims To Bring Real-World Assets Onchain, CEO Says 'Proven Tech Is Secure And Scalable'

Bringing real-world assets, or RWAs, onto the blockchain is still a ways away, according to a recent McKinsey & Company report. Still, there’s plenty of potential, as the market could reach a total tokenized market capitalization of approximately $2 trillion by 2030.

Mantra — a "security-first" Layer 1 blockchain — aims to provide standardization in tokenization and cater to financial service businesses interested in bringing their full portfolios on chain.

Mantra co-founder and CEO John Patrick Mullin spoke to Benzinga about serving the interest of traditional finance (TradFi) entering the tokenized space as well as the potential of RWAs in 2024 and beyond.

BZ: Why is there such strong interest in RWAs?

Mullin: The RWA revolution is gaining momentum due to a convergence of technological maturity, regulatory advancements, and increased understanding and acceptance of blockchain’s potential in traditional finance. The early phases of stablecoins and other blockchain technologies provided the necessary groundwork, demonstrating the viability of blockchain for real-world applications. Now, as the technology has proven itself secure and scalable, and as regulations are beginning to give clarity, both markets and institutions are more ready to engage with these innovations at a larger scale.

BZ: What do TradFi firms see in RWAs? What about consumers?

Mullin: Traditional Finance (TradFi) institutions are recognizing the efficiency, liquidity, and global reach blockchain can offer, making crypto a new frontier for investment and operations. Consumers are looking for more stable and tangible investment opportunities within the crypto space, which RWAs provide by linking digital assets to real-world commodities and properties.

BZ: What RWAs do you see as the “tip of the spear” leading the revolution?

Mullin: Real estate and commodities like gold and oil are often seen as the “tip of the spear” for the RWA revolution. However, U.S. Securities, Stocks, Bonds, Private Credit and so forth will be first. Real estate markets are the most illiquid, and will gain most from fractionalized ownership and enhanced liquidity, making investment more accessible. These may come in later, but the most value added will be here in my opinion. Commodities that traditionally require complex logistics and have high entry barriers are also prime candidates for tokenization, which simplifies transactions and opens up new markets.

BZ: Do RWAs help add liquidity to the crypto ecosystem?

Mullin: RWAs introduce new ways for real-world assets to be bought, sold, and traded on blockchain platforms. By tokenizing assets like real estate, art, and commodities, we can break large assets into smaller, more liquid units. This not only makes these assets more accessible to a broader audience but also allows for their integration into the broader crypto trading and lending ecosystems, enhancing overall market liquidity. In time, on-chain will become the new online, and at Mantra we are working towards this vision of Bringing Finance Onchain.

BZ: What is your plan to make RWAs accessible for everyone?

Mullin: Mantra Chain's broader strategy is to work closely with all leading RWA projects to create the most liquid Layer 1 blockchain purpose-built for RWAs. Enabling Ondo USDY, the market-leading tokenized U.S. treasury product, marks a significant expansion of our ecosystem. Having a fungible interest-bearing base layer of liquidity via USDY is critical to enhancing our on-chain liquidity profile, and this is one of many such extensions we are making to the Mantra ecosystem.

Future Cooperation Between Blockchain And TradFi

Mantra recently shared news of Nomura's digital assets arm Laser Digital becoming strategic investors and partners, as well as their partnership with Ondo Finance. Mantra said that they have other partnerships under negotiation with key players in TradFi and Blockchain.

It seems unlikely that the greater phenomenon of RWA tokenization on-chain will be the province of any one L1 – but the existence of projects like Mantra show that the space is maturing and solving the challenges of tokenization for commodities and traditional financial instruments.

Projects like Mantra will be important to the trend because they are able to negotiate partnerships with traditional finance who have shown varying degrees of willingness to get on board with the digital trend.

It's likely that in the next 10 years, fractional sales of assets will be a steady part of the industry, available to global buyers all over the world with lower barriers to entry than ever before. In the meantime, it's worth watching projects like Mantra and Chintai, or tokenization leaders like Tokenize and Securitize to see where traditional finance is making new truces with digital assets and embracing the new challenges and opportunities in the crypto space.

Investors and experts alike will have the opportunity to delve deeper into these trends at the upcoming Benzinga Future of Digital Assets event on Nov. 19, where the evolving landscape of digital assets will be a central topic of discussion.

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