In June 2023, the Runs on Radix program went live to give dApps the ability to quickly convey to their users the benefits of running on Radix; a radically better user experience, secure-by-design applications backed by Radix Engine, and a network able to grow to meet the needs of mass adoption. Since announcing Runs on Radix, there has been a highly enthusiastic response from the Radix builder community, with over 45 projects looking to join the program just over a month after it launched.
Over the coming weeks and months, Radix Publishing will speak to each participant and offer a Q&A overview for the Radix community. Here are some of the key things you need to know about SRWA: A real-world assets lending protocol on Radix.
- SRWA is a lending protocol on Radix that allows users to borrow capital by using their real-world assets as collateral and to lend capital to earn yield.
- The SRWA team thought it was best to build on Radix due to its advanced scalability features and radically better user experience.
- SRWA significantly lowers the time and effort needed to secure funds compared to centralized borrowing.
What is SRWA?
SRWA is the protocol built on the Radix network, underpinning CowDAO. CowDAO currently focuses on the New Zealand pasture-based animal agriculture industry with the goal of further expansion.
Unlike traditional financial systems, SRWA operates on a peer-to-peer basis, removing the need for centralized intermediaries; removing these intermediaries significantly lowers the time it takes to secure capital.
If you were to try to secure a collateral loan with centralized intermediaries, it could take upwards of 60 days; considering this is a lengthy process, this could cause an issue for the borrower. This unattractive user experience posed an opportunity for reform, one that the SRWA decided to pursue with a decentralized lending protocol for real-world assets.
But, as we all know, DeFi in its current form is not scalable or friendly to mainstream users, as the learning curve is steep and the experience is filled with exploitable code within dApps due to inefficient coding languages, meaning hacks are unfortunately abundant. So the team turned to Radix shortly after watching RadFi in December 2022.
The SRWA team understood that DLT, coupled with the Radix approach to a radically better user experience, is the winning combination for mainstream use of their lending protocol.
Building their project on Radix gives them the ability to offer a user experience that is unparalleled in its ease of use and transparency. This allows the project to scale without the risk of network bottlenecks, common hacks, and downtime, thanks to the full Radix stack, including Radix Engine, a developer-friendly coding language, Scrypto, and Cerberus.
As a lending protocol, SRWA plans to allow users the opportunity to lend their excess capital and earn attractive investment yields. On the other hand, users can also utilize their assets, such as houses, cars, land, gold, or equipment, as collateral to borrow funds when needed.
How do you bring RWA on-chain?
Bringing real-world assets on the chain is a popular topic within the DeFi community; the initial goal for SRWA (CowDAO) is to allow people to use assets such as their farm or equipment as collateral.
The process of enabling this feature is currently being developed, but essentially, an SPV (Special Purpose Vehicle) will be registered to hold the titles for the tokenized real-world assets; these titles will then be made into an NFT, thus allowing the owner of the RWA to prove their collateral on-chain and then use that asset for fundraising.
As the team expands globally, special attention must be paid to regulations, asset security, and insurance.
The journey to Radix and what comes next?
According to SRWA Co-founder Nikola, the team initially discovered Radix off the back of RadFi back in December 2022; at this point, the project was already a year old, but it was the Radix approach to a better user experience and scalability that really sold it for them.
"The project started about a year and a half ago, it was in December that we discovered Radix thanks to the RadFi keynote, and it was a major problem solver for us. Why? Because of the user experience, at the time, we were thinking about how we could make sure our user journey and experience were easy enough that my grandmother could use it. We watched RadFi and thought it sounded amazing; it sounds like a real problem solver for our users and us."
Their current demo product resulted from just over one month's work while competing in the Scrypto DeFi Challenge in February 2023. Following this, the team has continued to test and build their product and has plans to launch shortly after Babylon goes live on September 27th, 2023.
"We are planning to launch around Babylon; our internal plans and timings are well aligned already around this date. We aim to have an MVP running on a test network and get feedback, and once everything is good to go, we will launch our project, so the timing couldn't be better for us".
You can check out the full interview with SRWA below:
All information about SRWA was provided by the SRWA team and has not been verified by Radix Publishing, RDX Works, or their associated companies.