xRWA: A Cross-Chain Framework for Interoperability of Real-World Assets

Abstract: Real-World Assets (RWAs) have recently attracted increasing attention as a means of bridging traditional financial instruments with decentralized infrastructures. By representing assets such as bonds, commodities, and real estate on blockchains, RWAs can enhance liquidity, broaden accessibility, and extend the scope of decentralized finance. Industry forecasts further suggest rapid growth of tokenized RWAs in the coming years, underscoring their potential role in the evolution of digital financial markets. However, when deployed across multiple blockchains, RWAs face challenges such as repeated authentication on different chains and inefficiency caused by multi-step settlement protocols. To address these issues, we present a cross-chain framework for RWAs that emphasizes identity management, authentication, and interaction. The framework integrates Decentralized Identifiers and Verifiable Credentials with customized attributes to support decentralized identification, and incorporates an authentication protocol based on Simplified Payment Verification to avoid redundant verification across chains. Furthermore, we design a cross-chain channel that enables the settlement of RWAs without requiring channel closure, thereby improving operational efficiency. We implement the framework and evaluate it through simulations, which confirm its feasibility and demonstrate improvements in efficiency for RWAs in cross-chain settings.