Introduction
Introduction
Over $10 trillion worth of assets are expected to be tokenized by 2030, driven by institutional adoption. However, existing lending markets lack both the compliance rails to support these assets and the mechanisms in place to prevent liquidity fragmentation, caused by different parties tokenizing the same underlying asset.
The total amount of tokenized RWAs has been skyrocketing in recent months, as institutions start embracing blockchain technology for efficiency and better liquidity. As such, the relevance for an RWA-friendly lending market that modularly supports these assets has never been bigger. That is where Mystic comes in.
Mystic is a lending market fit for RWAs, where users can lend and borrow using their tokenized RWAs as collateral. We set KYC requirements at the asset level, to maximize permissionless exposure whilst remaining compliant with all relevant AML regulations, much like we integrate with custodians to be able to modularly support digital assets as well as tokenized real-world assets (RWAs).
In addition to our focus on compliance, Mystic's architecture is also custom-built to solve a big problem in RWAs - fragmented liquidity. This stems from the fact that, although they may represent the same underlying asset (e.g. T-Bills), tokens issued by different entities do not share KYC whitelists nor are they interchangeable. In order to boost liquidity for all assets in the protocol, Mystic leverages isolated vaults that can choose to share liquidity (and risk) with each other.
In order to be in line with regulations and facilitate the handling of securities, Mystic has a novel approach to protocol building - the whole protocol is built on top of a regulated custodian, so that any time an asset is sent to one of our pools, it is then sent for safekeeping with a regulated custodian. This combination of DeFi and CeFi makes Mystic the obvious lending choice for compliance-minded institutions and RWA holders / issuers alike. The protocol is a semi-permissioned fork of Aave V3, a very popular and battle-tested lending and borrowing protocol.
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Read more about Mystic and how we are changing finance for the better on our website:
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