Exploring the Security Issues of Real World Assets (RWA)
Year: 2024
Type: conference-paper
Abstract: Having real-world assets (RWA) tokenized on blockchains has recently been intensively discussed and recognized by DeFi ecosystem and traditional financial institutions as the next growth frontier, with its total value locked (TVL) surpassing \2.5 billion as of September 30, 2023. However, the operational mechanics and security issues of RWA remain largely uncharted. To fill this gap, we propose the ever-first research on its anatomy and security issues. We initially outline two strategies for tokenizing real-world assets, and then we analyze the potential security risks within six associated entities (e.g., investors and smart contracts). Furthermore, we conduct a measurement of 39 mainstream RWA projects and reveal that RWA projects are facing risk deficiencies in areas of on-chain investors, stablecoins, blockchain oracles, project teams, and off-chain assets. Our research proves potential risks and threats in the RWA area and offers guidance for the burgeoning RWA market.
Authors: Shijian Chen, Muhui Jiang, Xiapu Luo
Institution: Hong Kong Polytechnic University
Language: English
Subfield: Information Systems
Field: Computer Science
Domain: Physical Sciences
Open Access status: gold
OpenAlex ID: W4404515201