Listen to Nathan Windsor interview Vinay Gupta, CEO of Mattereum, on tokenizing Real-World Assets (RWA).
Gupta was the launch coordinator for the Ethereum ICO in 2015. He has an extensive background in computer science, existential risk, and the esoteric arts. We spoke at length about how Mattereum is tokenizing Real-World Assets (RWA) through its asset passports, and how Mattereum can help solve slavery and climate change through accurately tracking the conditions, labor, and emissions that result from the manufacturing of assets.
With the DeFi boom currently underway, Gupta feels that although profitable for some, is not the ultimate vision. "The goal of the revolution is to fix the damn planet, not just shuffle money around from finance nerds to crypto nerds," he said.
"I don't think that's the future of the blockchain space at all. A bunch of people will make a bunch of money digitizing out of date systems like the New York Stock Exchange, and that will be great. But the end of that, we're not going to be left with a fundamentally better world. We're going to be left with a different set of incumbents, but this is not the goal of the revolution. We have to go deeper than that if we're going to get a livable world. So once you have that goal in mind, then we can talk about what the Mattereum baby steps are towards that goal."
Mattereum, in contrast, issues asset passports that function as insurance for real-world assets when transferred between parties. It gives parties the reliable provenance, backed by the liability of those parties who certify these items, including their collateral, insurance, and personal assets. This type of transparency and enforceability will be very critical for fighting against counterfeiting and fraud. To reduce counterparty risk, the legal provisions that are provided by the Mattereum smart assets can help ensure that asset owners and businesses can trade with confidence. Mattereum is currently live on Ethereum.
These Mattereum asset passports are critical when it comes to compliantly tokenizing RWAs. There is a lot of work currently being done by MakerDao in this area, which was referenced in the interview here.
"So Maker's desperate need is to diversify outside of crypto so that the DAI stable coin is stable relative to the assets of the real world, rather than only being stable to the assets in the crypto world, where there's so much correlated risk."
The concept of correlated risk is in everything that underpins Mattereum. If Mattereum can get very large asset portfolios with financial identities, then it becomes possible to bind those asset portfolios into uncorrelated or anti-correlated asset pools. So if you've got a maximally diverse pool of underlying assets all of which have strong legal identities, that pool's value will not change over time. It will be rock solid. It will be literally the most solid security that you can buy in the world because it will be more rigid than even government bonds.
"This is the area where the crypto people are still learning what the real finance people have always known, which is correlation is what really generates wealth. If I can spot the two things that are correlated, nobody else knows that I can print money."
It is this type of correlation that Mattereum is chasing in global markets.
“[Using Mattereum we can say] here's the real estate portfolio. Here's the farmland portfolio. Here's a portfolio made of people's college loans. Here's a portfolio made off a huge collection of art, which is currently stored in 150,000 people's houses."
With built-in redemption policies and insurance on Mattereum, we can actually get the art back and sell if we need it. These digital representations of value, very tightly attached to physical value in the real world, can be used to assemble anti-correlated portfolios of that value. And those portfolios will be the most stable financial products that have ever existed in human history.