MetalSwap Knowledge - MetalSwap in the RWA Trend

Metalswap Knowledge [BLOG]-2

MetalSwap is the first dApp in the DeFi ecosystem that offers the derivative tool of hedging swaps through its Hedging Contracts. 

As we know, initially, it was possible to open hedging positions only on the most capitalized crypto assets like BTC and ETH within the tool.

The first, and so far the only, RWA implemented within the dApp has been WPAXG, which is a token representing an ounce of gold on the blockchain.

This implementation was possible due to PAXG being a token with a significant market capitalization, exceeding $400 million. Consequently, a robust infrastructure, particularly involving decentralized oracles, was established around it, facilitating its successful integration.

Future of RWAs in DeFi

As might be expected, gold has emerged as the first real-world asset to be developed within the DeFi sector, largely due to its status as the world's highest capitalization asset. 

This value has created demand for various use cases within DeFi, and thus various solutions, including PAXG token, have emerged to meet this demand from decentralized finance users.

MetalSwap took the opportunity of PAXG token creation to implement this asset within the dApp, making it possible for the first time ever to open a hedging position in DeFi on this asset.

However, the integration of other Real-World Assets and commodities such as silver, copper, and various other metals into the DeFi ecosystem is experiencing delays. This delay poses a challenge for MetalSwap, as it reduces the platform's ability to incorporate these assets into the dApp.

Despite this, for sure, sooner or later, the integration of other RWAs and commodities will occur within DeFi and MetalSwap will be ready to implement these news tokens.

As we analyzed in our recent focus on various RWA dApps, some projects are emerging as solutions that could finally solve this problem and bring a whole new list of assets to this sector.

When this happens, MetalSwap will be the main dApp for hedging operations on these assets.

The Role of MetalSwap in the RWA Trend

When the RWA trend will finally explode, i.e., when all those real-world and commodity derived assets come on-chain, MetalSwap will play a key role in this revolution.

In traditional finance, those who use commodities almost exclusively operate through the derivative financial instrument of hedging swaps to protect their goods, and therefore their value, from market volatility.

MetalSwap already has the structure and contracts to allow users to perform hedging swaps and will thus be the leading dApp when these new assets will be available in DeFi.

Despite this delay on the part of the DeFi infrastructure, MetalSwap is continuing to develop and improve its product so that it can immediately position itself as a leading project when the various commodities will find their place within decentralized finance.


-The DeFi Foundation


✎ What is MetalSwap?

MetalSwap is a decentralized platform that brings Hedging Contracts on financial markets with the aim of providing coverage to those who work with Digital Assets and an investment opportunity for those who contribute to increase the shared liquidity of the project. Allowing the protection for an increasing number of operators.

With MetalSwap we enable Hedging Contracts on the DeFi field, AMM style.