How Blockchains Can Change the Game for RWA: Summarizing Our AMA With Nomad Fulcrum and Blocksquare

To dive deeper into the topic, last week we held an AMA (Ask Me Anything) session on X Spaces with two of our partners:

Nomad Fulcrum, a startup that’s developed more than 100 AI agents for RWA transactions
Blocksquare, which has tokenized $140 million in real estate assets to date.

You can listen to the full recording of the X Spaces here.

Nomad Fulcrum

Pavel, the CEO of Nomad Fulcrum, explained that they plan to launch an on-chain product in the next few weeks. Right now, the team is working with liquidity providers to launch with liquidity and strong TVL.

“We are a DeFi AI protocol that runs on over 100 different AI agents that do RWA transactions on commodities, treasuries, currencies and indexes,” Pavel said. “We have access to the inter-bank market where our AI agents are executing these transactions and generating profit.”

“The main reason why we are doing so is that we see a big gap and big problem in the blockchain space where the majority of DeFi protocols are not sustainable and do not provide sustainable yield, because the yield is dependent on the liquidity in the space,” he added.

Slow liquidity during the bear market meant Aave and Compound generated only a few percent in APY (Annual Percentage Yield) despite collectively having over $30 billion in TVL.

Blocksquare

“Blocksquare is here to bring the asset class of real estate on-chain,” explained the company's CEO, Dennis.

“We started back in 2017, and today we've brought around $140 million worth of real estate assets on chain, coming from 20 jurisdictions. Actually, I think it's, it's more than that now, and we approach this market by providing tools as an infrastructure provider,” he added.

Real estate companies or financial institutions can work with Blocksquare to launch their own marketplaces that bring tokenized real estate assets to their audiences.

Tokenization, 24/7 markets and truly global reach

To understand why tokenizing RWAs can be a game-changer, Pavel from Nomad Fulcrum walked through key reasons why on-chain assets are revolutionizing investment compared to traditional markets

He explained that fractionalizing assets opens investment to wider audiences who can stand to benefit from their financial performance.

“Let's imagine that you want to buy Berkshire Hathaway series A stock—this is Warren Buffett main fund and it costs around $800,000 per share. No retail customer is able to buy, one share could buy two houses,” he said.

But if you “cut it into pieces” that are $1,000 each, suddenly every retail owner can gain exposure to the profitability of Berkshire Hathaway as fractional owners. That is fractionalization/tokenization, a true power of crypto.

Another of crypto’s differentiating factors is that the market is open 24/7, 7 days a week unlike traditional trading markets that follow business hours during the week and are closed on weekends and public holidays.

Finally, Pavel explained, crypto also enables true global accessibility.

Tesla stock is traded in the US but right now, as a person based in Europe, he can’t access them directly without a brokerage account in the US. Blockchain-based assets, however, are more universally available to a trader without any requirement on their location.

Fixing the challenge of real estate investment

Tokenizing RWAs is proven, but real estate has yet to really accelerate—despite being the most popular form of investment in the world as people look to own their own house.

Currently, the options for investing in real estate for profit are limited in scope.

“The fractionalization of real estate currently happens with real estate investment trusts, which are big funds that hold billions of real estate,” Dennis explained. “They have a lot of inefficiencies of how they are being managed, and they really serve only the institutional layer of investors, like pension funds, and they're not really good investments for the Average Joe.”

“When it comes to real estate, an average person would think of investing in a primary home as a residence, and then maybe down the line investing in another property,” he added

There’s also syndication, Dennis pointed out, but that comes with immense challenges since:

It requires creating an SPV (special purpose vehicle) which has limited liquidity
The horizon is long-term, typically a minimum of 10 years
The asset itself is owned and managed by a third-party

Fundamentally, this is a broken system. On-chain tokenization can revamp the way we invest in the world’s largest asset class.

Going on-chain could also allow real estate assets to be used in other products, Haven1’s Abhishek said.

“We are building a lending protocol where, if you are holding a real estate collateral, you can mint stablecoins against it,” he explained. “You can choose to invest those assets wherever you like.”

“Similarly, you can start to get some additional return. So holding the real estate token is giving you some sort of rent, but if you are lending in a lending protocol, you're able to generate additional return on top of it,” Abhishek added.

Regulation is key

Regulation is the watch-word for many areas of crypto, and that’s the same when it comes to RWA.

Pavel and Dennis both pointed out that Trump’s successful Presidential election might not be to everyone’s liking but the needle is moving when it comes to cryptocurrencies and regulation. Likewise, in Europe, there’s the MiCA, DORA, and the DLT Pilot Regime which are EU regulations governing the use of distributed ledger technology (DLT) with a sandbox for settling trades using DLT technology.

Pavel explained that Nomad Fulcrum started its business aiming to be regulatory compliant based on MiCA (markets in crypto assets) and with a desire to work with regulators across the world.

Haven1’s Abhishek, who previously built KYC systems for Binance, believes that KYC is going to be critical to offering RWA, and particularly real estate assets, in a compliant way that earns trust from traditional investors and newer retail users, too.

Dennis emphasized the evolving regulatory landscape for tokenized RWAs. While MiCA in Europe provides clarity for institutional engagement, it does not cover tokenized securities, which remain subject to MiFID II or US securities laws.

He highlighted, too, the increasing importance of AML and KYC compliance, which contrasts with traditional crypto norms.

Additionally, MiCA primarily regulates stablecoins and asset-referenced tokens but leaves a broad category for other tokens, creating legal complexity. Given these regulatory challenges, Blocksquare collaborates with major law firms like CMS to ensure compliance and provide certainty for investors and business partners.