Read Marquee: a new generation of on-chain insurance system, a new growth driver for RWA

In the traditional financial market, insurance annuity products are a widely regarded investment and retirement planning tool. However, in the wave of financial innovation in recent years, the digitalization and tokenization of insurance annuity products have begun to emerge. The Marquee project is driving the construction of a next-generation insurance system, bringing investors new opportunities and advantages through innovative insurance RWA (Real World Assets) products, which is of great significance in the financial market.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/9wx0zrjwre22s49d.png!webp)

First, the importance of insurance annuity products

Annuity is by nature an insurance product, a tool for people to save and manage cash. Annuities are created and sold by financial institutions, which accept and invest personal funds, and then pay a certain amount of cash to the policyholder when annuity. Annuity is divided into two stages, the first is the accumulation stage before the start of annuity, and the second is the payment stage after the start of annuity. There are many types of annuity products, but the general feature is similar, that is, to provide insurance for policyholders. There are four most popular annuities: iable annuity, fixed annuity, indexed annuity, and immediate annuity. The importance of insurance annuity products in the financial field is mainly reflected in the following aspects:

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/kh1gccmbzq21s3rj.jpg!webp)

1.1. Retirement planning: Insurance annuity products provide investors with a long-term stable income planning tool to ensure that they can maintain a good standard of living after retirement and cope with long-term financial needs, such as buying a house, buying a car, etc.

1.2. Long-term wealth management: The asset portfolio of these products usually includes bonds, stocks and other investments that need to be managed for a long time to support long-term expenses such as pension payments, education expenses, and large purchases.

1.3. Risk management: The diversified portfolio of insurance annuity products helps to reduce the impact of market fluctuations on investors and provide more stable investment returns.

1.4. Asset inheritance: Insurance annuity products provide investors with more control over assets. The beneficiary can specify the collection method, and can also establish an insurance fund trust to customize the asset inheritance plan according to the actual situation and needs. This helps avoid family property disputes, ensures that assets are distributed appropriately after death, and provides an opportunity to avoid risk aversion so that assets are used to pay off debts and are not left to future generations.

In short, insurance annuity products play an important role in the financial market, not only providing investors with long-term stable retirement income, but also helping long-term wealth management and risk management. In addition, they provide more flexibility and control over the inheritance of assets, helping to protect family assets and avoid potential risks. Therefore, these products have irreplaceable value in investment and retirement planning.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/b2kt4fgh3flt9hl4.jpg!webp)

Second, the clever integration of annuity and RWA

RWA (Real-World Asset Tokenization) is a key financial innovation that aims to digitize and tokenize various types of assets in the real world, enabling them to be traded and circulated on the blockchain. The development of RWA has also attracted attention from traditional financial institutions and the crypto space, both of which are actively exploring how to bring real-world assets to the blockchain. This trend indicates that financial markets will continue to digitize and further integrate the traditional and crypto finance sectors.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092715/4gl6xiahlmkkytb7.jpg!webp)

RWA can serve as an important source of real income for U-standard assets in the crypto market. The potential impact of RWA's on-chain entry on the crypto market is almost transformative. RWA can provide the crypto market with sustainable, rich types of real yields backed by traditional assets. RWA can graft a bridge between the decentralized financial system and the traditional financial system for DeFi, which means that in addition to introducing incremental funds for the crypto market, RWA can also obtain the massive liquidity, broad market opportunities and huge value capture of the traditional financial market.

RWA's assets can be tangible assets or intangible assets, such as stocks, bonds, commercial real estate, automobiles, gold, etc., due to the current market conditions, treasury bonds RWA is relatively the most popular, insurance annuity products and other insurance asset management industry is also an important asset class held by people, which can also be on-chain through RWA, the introduction of RWA has a potentially significant impact on the insurance market and the crypto field, which mainly includes:

2.1. Increase transparency: Digitizing insurance asset management assets and putting them on the chain improves product transparency, and investors can more easily track their investments and understand the situation of asset portfolios, thereby improving trust.

2.2. Improve liquidity: digitizing the share of insurance annuity products and putting them on the chain increases their liquidity, making it easier for investors to buy and sell shares and reduce transaction costs.

2.3. Reduce management costs: Blockchain technology can reduce management costs, and smart contracts can automate many management tasks, reducing the need for manual intervention.

2.4 No need for centralized intermediaries: The tokenization process of insurance RWA eliminates central intermediaries in traditional transactions and realizes efficient decentralized asset storage and transfer.

2.5、Support the development of DeFi ecosystem: Insurance RWA provides more real asset support for decentralized finance (DeFi), improving the credibility and attractiveness of DeFi projects.

2.6 Introducing new asset classes: Grafting DeFi Lego on top of Marquee's insurance RWA can further unlock the potential of insurance RWA assets.

2.7. In the short term, Marquee's insurance RWA is more of a unilateral demand for traditional insurance annuity products by users in the crypto world, and the future will be two-way, on the one hand, it can bring real-world insurance annuity products to the chain, on the other hand, traditional insurance annuity products can further release their potential with the help of various technologies and advantages of blockchain.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092715/ana2o3sn7uvthk3k.jpg!webp)

Overall, the insurance RWA products of the Marquee project represent the future trend of financial innovation, combining insurance annuity products with blockchain technology to provide investors with more choices and flexibility, while promoting the integration of digitalization and tokenization in the insurance and financial sectors to build a new generation of insurance system.

Third, the income prospects of insurance RWA

Based on the business model in which bond RWA presents a number of different development paths, we summarize the following business models of insurance RWA that can bring innovation and growth opportunities to the insurance industry. Here are the main viable insurance RWA business models:

Consignment model: The project party of the consignment mode does not directly participate in the encapsulation of the underlying insurance assets, nor does it provide user KYC services. It mainly attracts customers through crypto-native methods, focusing on business marketing, capital acquisition, and expansion of ecology and application scenarios. This type of capital needs to be pooled to pool users' funds and then lend them by a single borrower (Marquee) to purchase different kinds of insurance assets.

Platform model: The platform model requires the project party to provide a series of services such as on-chain, sales and KYC, but does not directly participate in the encapsulation process of insurance assets. These projects typically offer tokenized services for insurance assets and equity, on-chain verifiable information services, and user KYC services. This model is closer to the business model of Internet platforms and can help encapsulate insurance assets and interests in various traditional markets.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/lnoq32gu5k4219br.png!webp)

Infrastructure model: The infrastructure model requires the project party to provide services such as listing insurance RWA on the chain, purchasing assets, and asset management, but does not directly contact end users. The main task is to build infrastructure, digitize insurance assets and introduce them into the blockchain, and provide on-chain and management services for other projects.

Self-operated model: The self-operated model requires the project party to find suitable insurance assets, establish a business framework with external partners, manage asset risks, and tokenize assets or equity. Projects in this model are typically more complex and require more effort in legal and corporate business architecture, but also have more control and the ability to proactively manage risk.

Hybrid model: The hybrid model project integrates the above various models, not only providing services such as on-chain, KYC, etc., but also actively looking for insurance assets to directly provide investment opportunities to users. Projects in this model typically provide a variety of services, including access to funds to financiers, provision of encapsulated assets, governance and treasury management services to other agreements, and full process services for RWA.

RWA, as one of the most promising use cases in the Web3 space right now, has received increasing attention from the digital currency industry and the traditional financial industry. U.S. Treasuries, on the other hand, are relatively mature assets in RWA at present. U.S. Treasuries are considered one of the safest investments in the world, offering fixed returns with minimal risk. By using RWA as collateral, the yield on these bonds can be increased while maintaining their low-risk profile.

This works by investors buying Treasuries while receiving RWA, which represents a portion of the bond's value. RWA is then kept in a digital wallet or decentralized platform, providing a secure, transparent record of ownership. Investors can then use RWA as collateral to borrow funds from lenders, which may be lower than those on traditional loans. This approach allows investors to maximize the return on Treasury investments while minimizing risk.

In conclusion, the business model of insurance RWA is constantly innovating and evolving, bringing more opportunities and possibilities to the insurance industry and the crypto space.

Since 2019, global economic growth has slowed, mainly due to the COVID-19 pandemic, trade tensions, and declining business confidence. The International Monetary Fund (IMF) expects global economic growth to reach 3.3% in 2023, up from 2.7% in 2022, but still below pre-pandemic growth. The Fed's continued interest rate hikes have also caused global financing costs to rise, and the return on investment has fallen sharply. At this time, US Treasuries, which are the yardstick of the global risk-free interest rate, enter the asset allocation options of most investment institutions.

Dallas Fed economist J. Scott Davis believes that short-term U.S. Treasuries have little liquidity or interest rate risk compared to long-term U.S. Treasuries. Short-term U.S. Treasuries can be considered a truly safe asset. He noted that during the 2008 financial crisis and the 2020 pandemic, inflows to long-term U.S. Treasuries declined, but inflows to short-term Treasuries increased.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/smukt0gi5kvtraxs.png!webp)

But during the crisis, the outflows of short- and long-term Treasuries were almost identical, with no significant divergence.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/n9by4ua38tmr169t.png!webp)

In addition, he noted that in times of economic turmoil, the dollar tends to appreciate during crises because it is the world's reserve currency.

The current level of interest rate volatility in the United States is at an all-time high. The MOVE Index is a yield curve-weighted index that measures the volatility of U.S. Treasury options and is a commonly used measure of interest rate volatility. US interest rate volatility has been steadily rising since mid-2021 and, while slightly retreating from the March 2023 high, remains at all-time highs.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092715/obrdk00gz4i2f6ub.png!webp)

The chart below shows the normalized volatility of U.S. Treasury futures by maturity

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/ue0i8pqi5zmc3xm3.png!webp)

As can be seen from the above graph, US interest rate volatility is at historically high levels. Its high volatility is often indicative of strong fixed income returns, which presents an excellent opportunity for active fixed income managers.

V. The Marquee Project's Future Outlook for Insurance RWA

In the future, insurance RWA will face a number of potential trends that will shape its future driven by digitalization and innovation in the financial sector:

1. Regulatory compliance: As the share of insurance annuity products digitizes, regulatory compliance will become a critical factor. Regulators will constantly adjust laws and regulations to adapt to the development of digital assets and ensure the protection of investors' rights and interests. Therefore, the share RWA of insurance annuity products needs to actively comply with regulatory requirements to ensure its legal operation and protect the rights and interests of investors.

2. Investor education: Investors need more education and information to gain insight into the potential risks and rewards of digital insurance annuity products. Financial education and transparency will play a key role in market development, helping to increase investor trust and understanding of these new products.

3. Collaboration and integration: Marquee's collaboration and integration with insurance companies, blockchain technology providers, and financial institutions will drive the development and widespread adoption of digital insurance annuity product share. Cross-industry collaboration helps to consolidate resources, improve product usability and user experience, and accelerate market penetration.

4. Technological innovation: As blockchain technology and smart contracts continue to evolve, more technological innovations will emerge, including more secure authentication methods, improvements to smart contracts, and more efficient transaction processing. These technological innovations will improve the efficiency and usability of insurance annuity products.

5. More asset types: In the future, the share of insurance annuity products RWA may expand its asset range to not only limit it to government bonds, but also other valuable real assets and digital assets. This will give investors more options while also increasing the possibility of diversifying their portfolios.

6. Risk modeling and analysis: In the future, more advanced risk modeling and analysis tools may emerge to assess the risk of digital insurance annuity products. This will help investors better understand their portfolio's exposure and take appropriate risk management measures.

Overall, the emergence of RWA in the share of insurance annuity products represents the future trend of digitalization and innovation in the financial sector. These innovations are expected to provide investors with more choice, greater transparency and lower-cost investment opportunities, while also helping to modernize and develop the entire insurance and pension industry. To realize these potential trends, market participants need to proactively address regulatory challenges, enhance investor education, promote cross-industry collaboration, and continuously drive technological innovation. Marquee will keep a close eye on these trends, respond flexibly, and actively drive innovation to ensure sustainable growth and progress in this field.

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/4l8f51q45toiw5sk.jpg!webp)

VI. Underlying assets supported by Marquee Insurance RWA

Marquee Project Insurance RWA initial support assets, including the world's leading insurance companies: AXA, Allianz (ALLIANZ), ING Group, AIG, the world's leading asset management companies: BlackRock, Vanguard Navigator, Fidelity annual insurance premium product share.

First, Marquee supports the digitization and on-chain of the above-mentioned product shares based on its own advantages and market conditions, and then sells these shares to investors (consignment model), in which insurance companies are still responsible for managing asset portfolios and paying pensions; Secondly, Marquee's own page provides a digital share of insurance annuity products, allowing different institutions and investors to participate in order to increase the competitiveness and diversity of the market; Finally, Marquee Insurance RWA supports integration with other DeFi: decentralized finance (DeFi)-based platforms can integrate insurance annuity product shares, enabling investors to buy and sell these shares on decentralized exchanges, while smart contracts can automatically process pension payments. In the future, a variety of business models will be adopted, and the diversity of business models will help meet the needs of different investors.

VII. The needs of Marquee's other businesses

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/f6cfvvmyhlys4z7z.png!webp)

Marquee's core design is a peer-to-pool model, with capital pools, and vault vaults similar to (3, 3) mechanisms, Marquee has a strong need to bring real-world assets into the crypto world, mainly because real-world assets (especially U.S. bonds) in the macro context can provide a stable risk-free return for Marquee's pool and vault.

Asset management needs: Both the capital pool and the vault have the need for asset management, and the income on the native chain mainly comes from pledging and lending activities. However, in the context of the crypto winter, the malaise of on-chain activity has directly led to a decline in on-chain yields. In the context of the current high yield of US bonds, marquee considered the introduction of US Treasury RWA, in the new version, marquee gradually converted stablecoin assets in the pool and vault (no yield or lower yield) into US Treasury RWA interest-bearing assets (5% -7% risk-free return). This can ensure the safety of the capital pool and treasury assets while obtaining stable income;

Portfolio diversification: The main investment strategy of the capital pool of annuity products is asset allocation, in the market when the market is extreme, the high volatility and high correlation of crypto-native assets are easy to mismatch and liquidate assets, and the asset allocation strategy soil is poor, but the introduction of RWA assets with low correlation with on-chain crypto-native assets can effectively alleviate such problems. Annuity investment strategies can diversify and build more robust and effective portfolios.

Marquee has received investment from 7 institutions, including WATERDRIP CAPITAL

Even in the bear market, Marquee has still received investment from many well-known institutions for its product advantages and technology. Dr. Joe, Marquee Co-Founder, said: "We are pleased to have the support of CGV and other well-known institutional investors from around the world in crypto and Web3, who share a common vision and great enthusiasm to build the next generation of decentralized finance applications and ecosystems in the future. CGV's expertise in the crypto and Web3 industries, as well as its diverse collaborative resources in Japan, Asia and North America, will help Marquee achieve its goals faster and better. ”

! [Read Marquee: A new generation of on-chain insurance system, a new growth driver for RWA] (https://piccdn.0daily.com/202310/11092716/5p9rgt3dx7vkd3ml.png!webp)