TL;DR
Full Story
Imagine being told you were only going to get one bonus this year.
If you were used to getting multiple bonuses a year, this might be disappointing.
But if you’d never received a bonus in your life, it’d comes as welcomed news.
That’s kind of how we feel about this latest McKinsey report.
The firm is estimating we’ll see $2T worth of real world assets, or RWAs (think: stocks, and commodities like oil and gold) being traded on the blockchain by 2030.
Which is lower than previous reports from competing firms that had a number closer to $10T by 2030.
But really, RWAs only entered the realm of plausibility a few months back, when major traditional financial firms started to publicly endorse the idea, and begin working towards making it a reality.
So whether we’re talking $2T or $10T worth of RWAs by 2030, it doesn’t really matter — both options are better than $0.
And honestly, the slow approach makes sense, for these three reasons:
-
Regulatory friction
The SEC has buckled, embracing Bitcoin and Ethereum ETFs…but they’ve done so begrudgingly. Allowing for the stock market to move onto blockchain rails is bound to be slowed by regulatory red tape.
-
Reliable blockchains aren’t fast enough
The powers that be have shown interest on building within the Ethereum ecosystem — which is doable for now, but not scalable just yet.
‘High speed’ Ethereum layer 2’s, like Base, have a theoretical limit of ~1,400 transactions per second (TPS), while the NASDAQ stock exchange processes ~20,000 TPS.
-
Fast blockchains aren’t reliable enough
“Ok, so why not build on Solana instead of Ethereum — it has a max theoretical limit of ~65,000 TPS?”
Well, Solana has a habit of going offline for hours/days at a time. This could/should be fixed in the future, but the traditional financial world will want this to be proven through heavy testing before they launch RWAs there.
The takeaway:
There’s a high likelihood that RWAs will be launched on the blockchain and attract trillions of dollars of investment.
…it’s just going to take a minute (and a whole bunch of work).
