Maker DAO Spark Grand Prix Competitors Analysis

Introduction

This study is motivated by the need to better understand the RWA market and gain insights into key competitors. Were analysed 37 applications of the Spark Tokenization Grand Prix, focusing in the legal, financial, and business development perspectives.

Legal

The table bellow summarizes the legal perspective extracted from the Maker DAO’s applications. This first analysis aim to locate where it is the majors issuance and controlling jurisdictions. The legal structure, was simplified in the Legal.Structure column and also will be analysed.

Issuer Jurisdictions

Approximately 19.5% of issuers are incorporated in the United States (Delaware) and 16.7% in the Cayman Islands, making them the most frequently chosen jurisdictions. These locations are attractive due to their favorable tech regulations, tax advantages, and low startup and maintenance costs.

Controlling Jurisdiction

For controlling jurisdiction, the U.S. remains the top destination, with nearly 28% of companies incorporated there. However, the Cayman Islands lose their second position to Singapore, which now hosts approximately 14% of companies. Among European countries, Luxembourg is the most popular choice, accounting for 11% of the selections.

Legal Structure

44% of the players choose a Investment Manager -> Mutual Fund structure with 25% of the mutual funds in that setup being incorporated at Cayman Islands and 25% of the investment managers incorporated in Singapore.

Business Development

Team Size

On average, the companies have around 25 employees. BlackRock has the largest workforce with at least 130 employees, while Fasanara and IVVIA have the smallest teams, with just 3 employees each.

Years in Operations

On average, companies in this sector have just over 2.5 years of operational development, underscoring the industry’s relative newness. SG-Forge and BlackRock-Securitize are notable outliers, with nearly 7 years since their founding.

Future Development Plans

The word cloud below was generated from responses to the “future developments” section, consolidating all non-null answers provided by the companies. Liquidity emerges as a common priority, along with goals for usability, composability, and interoperability. Franklin Templeton (BENJI) notably provided a unique response, mentioning plans to develop its own wallet and a GraphQL API.

Financial Product Metrics

Subscription and Redemption Time Frame

It’s no surprise that liquidity is the most frequently mentioned word among MakerDAO’s competitors. On average, the redemption timeline exceeds 7 days, with Etherfuse standing out as the most illiquid, requiring over 90 days for fund redemption. In contrast, the subscription process is considerably faster, averaging around 1.5 days.

Assets under Management (AuM)

The combined AuM across these companies is approximately $2.5 billion, representing nearly 40% of the market size reported in the DeFiLlama RWA TVL Rankings as of September 28th. On average, each company manages around $74 million in AuM, with BlackRock leading as the largest player at $522 million, accounting for 20% of the total AuM in this group.

Monthly Volume

The combined monthly volume across these companies is approximately $1.1 billion. On average, each company manages around $37 million in monthly volume, with Ondo (USDY) leading as the largest player at $409 million, accounting for almost 35% of the total volume in this group.

Fees

Approximately 65% of these firms charge a management fee (calculated based on Assets under Management, or AuM) at an average annual rate of 0.27%. To gauge the impact of these fees on investments, a simulation was run with an initial investment of $1 million over one year, resulting in a $1.05 million redemption (reflecting a 5% yield). The analysis identified Dinari (USFR.d) as the company with the highest projected costs, while PV01 demonstrated the lowest.

For an interactive experience, you can explore how simulated costs vary across different timelines and yields using this tool: Company Cost Simulator.

Expected Pn’L

For this analysis, the revenue stream was estimated using the following assumptions: 8 transactions per month (factored in to calculate entry/exit costs), the current total AuM as the basis for projecting management fees, and a 5% total return to estimate the performance fee. On the cost side, a general expense of $100,000 per year per employee was used as the benchmark.

Under these assumptions, Hashnote’s (USYC) model was the only one that proved viable at the current AuM and transaction volume. Even when testing with a reduced cost of $50,000 per year per employee, Hashnote remained the only profitable option

Conclusion

The RWA environment is relatively new and faces several challenges, including liquidity and usability. The legal structures required to issue these products, combined with competitive fees, create a tough market landscape, suggesting a potentially low survival rate for companies in this space.