Tokenization of Non-Financial Real World Assets (RWA) – The "Asset Management Revolution" Spreading in the World and Japan 【N.Avenue club 2nd Phase 11th Round Table Report】 | CoinDesk JAPAN

As the tokenization of Real World Assets (RWA) expands globally, particularly in non-financial areas—real estate, art, intellectual property (IP), carbon credits, and luxury goods (such as wine and watches)—the movement towards new asset management and fundraising utilizing blockchain is accelerating.

In Japan, interest in RWA tokenization is growing, and various projects are emerging across the country.

N.Avenue club, the largest domestic Web3 business community with corporate membership centered around leaders researching and promoting Web3, held a roundtable on May 29th themed "Tokenization of RWA in Non-Financial Sectors." They discussed new business opportunities and practical possibilities for Japanese companies.

The "N.Avenue club" aims to accelerate Japan's Web3 business by facilitating exchanges between member companies, related startups, and experts through activities such as monthly "round table (study sessions)" featuring guest lecturers from both domestic and international backgrounds, and "gatherings".

The round table is a closed event intended only for members, so a part of it will be reported here.

AgriDex Aiming for On-Chain Agriculture Market Realizes Cost-Cutting Examples

〈Edward Moncton of AgriDex〉The briefing session was scheduled to feature Henry Duckworth, the founder of the RWA platform AgriDex, which aims to on-chain the global agricultural product market. However, Edward Moncton, the CSO, made a last-minute appearance. After explaining the background of AgriDex's founding, he elaborated on its features.

AgriDex is a Solana-based RWA platform aiming to tokenize various agricultural products to achieve the on-chain transformation of the global agricultural market. It connects and on-chains various fragmented supply chains, enabling fast transactions and settlements that are typically cumbersome and time-consuming.

In the use case of cocoa trade in Ghana illustrated by Mr. Monkton, it was said that by shortening the payment terms to Unilever and smallholder farmers and using cocoa as collateral, cash flow could be improved, leading to a cost reduction of approximately $200,000 and 10%.

Platt Home Experiments with Quality Control of Sake Using Web3

Founded in 1993, Plat Home is a company that has contributed to the development of the internet in Japan, having started shipping its own Linux servers domestically in 1996, making it the first of its kind in the country. Not only does it connect PCs and servers to the internet, but it also works in IoT, providing connectivity through sensors in various fields, from social infrastructure to various industries. Within this context, it is focusing on blockchain.

In a proof-of-concept experiment, Web3 is utilized for the logistics of exporting sake. While sake is gaining global attention, the challenges lie in quality control, particularly temperature management, which can be too costly when done with Web2 technologies. Therefore, each bottle of sake is tokenized (Things Token). Labels are affixed to the sake bottles, and a system is implemented where the ink changes from black to red when a certain temperature threshold is exceeded, confirming that temperature management can be achieved at a low cost.

The tokenization of BONSAI is actually an initiative that follows Japanese culture.

〈Yusuke Maji, who participated online〉The bonsai, which is gaining attention overseas as "BONSAI," has risks such as quarantine delivery, shipping, management costs, and the risk of dying. Therefore, the BONSAI NFT CLUB is working on the tokenization of BONSAI. The representative who took the stage, Yusuke Maji (CEO of Majisuke Co., Ltd.), introduced the "BONSAI NFT GALLERY" that started around 2023.

This is a system for issuing NFTs tied to the ownership of bonsai, where the management of the bonsai is handled by professionals. There has been a culture of "custody" for bonsai since the Edo period, and it is not uncommon to entrust good bonsai to skilled bonsai masters and visit the bonsai garden to see your own bonsai.

The initiative called BONSAI BANK is a system where those who deposit a large amount of BONSAI COIN receive bonsai trees. Among those who purchased it for investment purposes, some have found themselves immersed in the world of bonsai.

Striving for Compatibility with Economic Activities through the Fragmentation of Carbon Credits PUC

〈Mr. Shingo Horii of PBADAO〉The next speaker was Mr. Shingo Horii, the representative director of PBADAO Inc. The PUC developed by the company is a protocol that fractionalizes carbon credits tokenized as RWA and operates within the ecosystem.

As initiatives for carbon credits are expanding, one of the challenges being considered is the low operational flexibility. Not limited to carbon offset costs, aspects such as ESG and CSR tend to struggle to deliver financial performance relative to their costs.

PBADAO aims for the "coexistence of economy and environment." It is trying to create an ecosystem that increases the flexibility of carbon credit management and generates business impact.

"1 Square Meter Owner of the Ground × NFT" Kamakura Inter's Initiative

〈Kamakura International FC's Toshiyuki Katsusaki〉Finally, Toshiyuki Katsusaki, the head of the owner’s office of Kamakura International FC, a soccer team based in Kamakura and belonging to Kanagawa Prefecture League Division 1, took the stage. Kamakura Inter aims to be a hub where everyone can be involved rather than simply aiming to move up to the J-League, with the philosophy of "CLUB WITHOUT BORDERS."

In the crowdfunding for the construction of the soccer ground, we referenced the approach of "Ikkō Jōshu" adopted for the reconstruction of Kumamoto Castle and recruited owners for 1 square meter.

Additionally, the "Kamakura Stadium NFT" project, which virtually issues ownership rights, was also implemented. NFTs linked to each 1 square meter of the soccer field, which has an area of 6528 square meters, were issued, and initiatives were introduced where rewards can be received if one's owned section contributes to a goal or assist.

Success Conditions and Specific Business Ideas for the Non-Financial RWA Token Market

In the second half of the roundtable, all participants split into seven tables for discussions. The themes raised were "What are the success conditions for a sustainable non-financial RWA Token market?" and "Ideas for a specific non-financial RWA Token market," and the participants exchanged views on one of the themes.

From the seven tables, opinions such as "It is essential for success to have a financial return" and "Focus should be on creating value that underlies the assets" were expressed, along with ideas like "tokenization of athletes."

N.Avenue club is a membership-based community aimed at accelerating Japan's Web3 business, centered around the monthly "Round Table (Study Group)" that invites guest lecturers from both Japan and abroad. In addition to the Round Table, it also conducts "Gatherings" to promote interaction between member companies and related startups and experts.

The N.Avenue club secretariat is calling for participation from corporate stakeholders and business professionals who are involved in or interested in Web3 business.

|Author: Kei Mizusawa | Edited by: CoinDesk JAPAN Editorial Team | Photo: Keisuke Tada