Tokenization

RWA tokenization refers to the process of reflecting real-world asset information on the blockchain to issue tokens that have the same value as the physical assets, enabling the use of real-world assets in the crypto financial market.

Background and Necessity

Traditional financial markets and crypto financial markets operate on different systems. Therefore, for real-world assets that exist only in traditional financial markets to be used in crypto financial markets, they need to be converted into a suitable form. This form is the token. The process of reflecting the information of real-world assets and issuing tokens according to valid procedures is known as tokenization, and the tokens issued in this manner are called RWAs. RWAs thus become the most important intermediaries connecting traditional financial markets and crypto financial markets and can be used in decentralized applications (dApps) such as DeFi and open markets.

Process

ELYSIA provides tokenization standards and technology to those who need tokenization. People can issue RWAs in ELYSIA through the following procedure:

RWA Tokenization Process

1. Application for RWA Issuance

   • The owner of the real-world asset inputs information about the asset according to the provided format.

     • Input information includes asset type, asset value, document images, etc.

   • Select the desired network and click the 'Apply' button to apply for RWA issuance to ELYSIA DAO.

   • Note:

     • The networks currently supported are Ethereum, BNB Chain, and Klaytn Mainnet (Cypress), and more networks may be added for ecosystem expansion.

     • ELYSIA DAO is a decentralized organization participating in developing real-world asset tokenization technology and contributing to the development and operation of the ELYSIA ecosystem. Its members are sEL holders.

     

     RWA Issue Request Form Example
2. Verification of Real World Asset Information & Voting on RWA Issuance

   • Members of ELYSIA DAO (sEL holders) verify the entered data.

   • Based on the results of the information verification process, ELYSIA DAO members vote on whether to issue the token.

   • Note

     • Voting is conducted through Snapshot.

     • Voting example: https://snapshot.org/#/elysia.eth/proposal/0xbebd584b47e5321c3aed32da917eb3085726299b2030fe535435ba4852a62026

3. Issuing RWA to the Real-World Asset Owner

   • If approved in the vote, RWA is issued and transferred to the real-world asset owner.

   • Example of issuance transaction: https://bscscan.com/tx/0xdf5d5747f111f3e4fac77d3260fe05885ad4df7cb443e80c29e58a261429deb6

Tokenization Targets

Theoretically, all real-world assets can be tokenized using the ELYSIA Protocol. Typical examples of such real-world assets include real estate, bonds, wine exchange vouchers, accommodation vouchers, copyrights for artworks, ownership of luxury goods, and more.

Among the numerous real-world assets, ELYSIA initially tokenized financial products related to real estate, such as "real estate collateralized loan obligations" and "PF loan obligations," based on the opinion of real estate experts within ELYSIA. Later, the asset categories were expanded to include U.S. Treasury bonds and e-commerce receivables, and there are plans to explore more asset groups in the future.

Resolving Ownership Issues

A DAO (Decentralized Autonomous Organization) is an organization that pursues achieving goals through autonomous decision-making by all members, following transparent rules set by smart contracts, without a centralized management hierarchy.

Since online organizations like DAOs cannot prove their legal entity, the issue arises whether such a group has the right to claim ownership of real-world assets.

To overcome this limitation, ELYSIA utilized DAO LLC. Currently, states like Wyoming and Tennessee in the USA and the Republic of the Marshall Islands have passed the 'DAO Law,' recognizing the legal status of DAOs as Limited Liability Companies (LLCs). ELYSIA has established ELYSIA DAO LLC in Wyoming, USA.

DAO LLC can directly own real-world assets, and RWAs based on these assets also acquire ownership and legal enforceability. Thus, using DAO LLC, it is possible to solve the aforementioned ownership issues while maintaining the benefits of a decentralized structure.

ELYSIA DAO LLC resolves the rights issue of participants by transferring the ownership of real-world assets when issuing RWAs. Through this, ecosystem participants can safely exercise their rights over RWAs through ELYSIA DAO LLC.

The specific roles of ELYSIA DAO LLC are as follows:

1. Receiving RWA Issuance Requests and Requesting Online DAO Review: The real-world asset owner requests RWA issuance to the offline DAO (ELYSIA DAO LLC), and the offline DAO requests the online DAO to review for RWA issuance.

2. Transfer of Real-World Asset Ownership: Upon the online DAO's approval of RWA issuance, ELYSIA DAO LLC receives the transfer of ownership of the asset from the real-world asset owner and creates RWA. This created RWA holds the rights to control (dividend, sale, liquidation, etc.) the asset and functions as a governance token.