TLDR: We are doing RWA now (with a twist). Yes, RWA is CeDeFi. Yes, we have partnerships to back it up.
BounceBit is embarking on a transformative journey to establish a new world, seamlessly integrating the stability of traditional finance with the innovation of crypto. By incorporating Real-World Assets (RWA), developing custom CeDeFi solutions, and collaborating with traditional banks, BounceBit is pioneering a dual-yield financial ecosystem.
This new chapter is not just about technology; it’s about redefining how we perceive and interact with value, creating a financial system that is inclusive, efficient, and sustainable, while unlocking unprecedented opportunities on a global scale.
The Evolution of Financial Markets
The First Paradigm: Real World, Tangible Traditional Finance
The First Paradigm represents the traditional financial system, starting with the London Stock Exchange and evolving over centuries. It emerged from the debt demands of the Anglo-French wars and has driven the rise of many enterprises integral to daily life through stock markets. Its core returns stem from tangible economic activities, this realm is aptly referred to as the Tangible First Paradigm or the Real World.
The Second Paradigm: Online Money, Virtual Crypto Finance
The Second Paradigm began with Satoshi Nakamoto's creation of Bitcoin, building a cryptocurrency-based financial system rooted in code. This paradigm arose as a response to the trust crisis in governments and traditional finance following the 2008 financial meltdown. Given its intangible, virtual nature, it is referred to as the Virtual Online Money, where profitability relies heavily on market speculation and on-chain trading activities.
The fundamental differences between the First and Second Paradigms have led to significant disparities in capital scale and profit models:
The First Paradigm's risk-free returns (e.g., U.S. Treasury bonds) are considered real due to government backing.The Second Paradigm's returns (e.g., crypto lending and arbitrage) are deemed virtual, based on speculative market dynamics.
These differences have fostered division:
The First Paradigm's views participants in the Second Paradigm as “gamblers,” with ephemeral returns.The Second Paradigm's sees the First Paradigm as rigid and unexciting, offering low yields.
After years of contention and market evolution, we predict that a new paradigm will emerge in 2025, blending both realms.
The New Paradigm: A Fusion of Reality and Virtuality
The Third Paradigm will integrate the returns of the First and Second Worlds into a new, indispensable financial ecosystem. This fusion is not merely about tokenizing First Paradigm (real-world) assets and selling them to the Second World (as seen in the current, less appealing RWA model). Instead, it unites the core yield mechanisms of both worlds:
The First Paradigm's foundational returns from U.S. Treasury bonds.The Second Paradigm's foundational returns from neutral arbitrage strategies.
In the New Paradigm, investors will enjoy dual returns. For instance, based on current market performance, an investor could achieve a 4% yield (Treasury bonds) + 30% yield (delta-neutral arbitrage), totaling an annual return of 34%. Even in a 2025/26 bear market, a 10-15% return in USD is expected.
CeDeFi: The Building Block of the New Paradigm

CeDeFi will serve as the bridge connecting the real and virtual worlds. Currently, CeDeFi primarily operates within the Second Paradigm, where on-chain users leverage mirroring technology to access asset management services on centralized exchanges (CEX), ensuring transparency and benefiting from CeFi yields. However, CeDeFi’s potential goes far beyond this:
Broad CeDeFi merges the traditional finance of the First Paradigm with the crypto finance of the Second World.Linkage Mechanism: The Second World must adopt First Paradigm models, such as enabling institutions with bank deposits or Treasury collateral to participate in crypto trading through mirroring mechanisms.
Example:
A traditional financial institution holding $100 million in Treasury bonds could collateralize and mirror these to a centralized crypto exchange (CEX). This would grant them a $100 million credit line to execute neutral arbitrage strategies, generating additional returns. This model exemplifies true synergy between the two worlds.
Burden and Betrayal
Current challenges arise from two prevailing models:
Model 1: RWA (Real-World Asset Tokenization) Users in the Second Paradigm, accustomed to high-risk and high-yield environments, are unlikely to be drawn to a mere 4% yield from tokenized Treasury bonds. This model lacks the Second Paradigm's core returns, failing to captivate its target audience. We call this the “Betray” problem.Model 2: Stablecoin Arbitrage Using stablecoins (e.g., USDT) as a medium, First Paradigm capital is introduced to the Second Paradigm for arbitrage. However, this model suffers from long transactional chains and requires high trust in stablecoin issuers. Furthermore, stablecoin issuers often capture much of the First Paradigm's returns, leaving this model devoid of the First Paradigm's core advantages. We call this the “Burden” problem.
Existing models fail to seamlessly integrate the dual-yield potential of the First and Second Paradigms. This gap presents a significant opportunity for BounceBit.
BounceBit is Building the Best of Both Worlds
BounceBit’s next phase is focused on establishing the New Paradigm, integrating the best of traditional and crypto finance. This initiative involves a multifaceted approach to technology and resource integration, alongside diverse product offerings.
Key Components of Building the New World
Integrating RWA into BounceBit CeDeFi BounceBit aims to incorporate Real-World Assets (RWA) into its CeDeFi infrastructure. These RWAs can serve as collateral for subscribing to trading and arbitrage products, seamlessly blending traditional financial assets with on-chain utility.Collaborations with Traditional Banks By partnering with traditional banks, BounceBit plans to enable direct crediting of traditional assets for trading purposes, eliminating the need for tokenization. This approach streamlines the process and enhances efficiency, fostering trust between traditional institutions and the crypto ecosystem.Custom Development for RWA on BounceBit Chain BounceBit Chain will develop customized solutions for RWA, including integrating KYC processes and supporting RWA minting. This ensures compliance and smooth onboarding of traditional assets into decentralized finance (DeFi) systems. These RWAs will also be seamlessly connected to CeDeFi wealth management products.Upcoming Credit Trading Initiatives BounceBit plans to launch credit trading for BlackRock’s BUIDL and Franklin Templeton’s BENJI in Q1 2025. These initiatives will expand the platform’s product portfolio, driving adoption and unlocking new revenue streams.
With a robust CeDeFi infrastructure and strategic partnerships, BounceBit is poised to lead this transformative journey, redefining the future of global finance.
As reward for reading till the end: Tomorrow we will reveal an important partner that will assist us in achieving this vision.