This article is a Chinese translation of the original BinanceResearch report. Later, 1-2 RWA-related reports will be extended based on this report. It is expected to be completed in a few days. Thank you for your attention~

• Note: This is not a complete translation, and many unnecessary descriptions have been removed.

🗝Full text highlights

1. Main categories and projects of RWA track

2. Project introduction (just a brief introduction to help you understand it simply)

3. Survey results and prospect analysis

First, let me briefly summarize the concept of RWA: RWA = real-world assets on the blockchain. As far as I can remember, it was first proposed in 2017 and was very popular in China in 2019?

The tokenization of stocks, bonds, real estate and many other types of assets on the chain are the directions of this track.

1. Main categories and projects of RWA track🔻

In addition to the share of the stablecoin market, the TVL of on-chain RWA is currently at an all-time high of US$12 billion.

Issuers of RWA assets are typically responsible for the acquisition of real-world assets, the tokenization of assets, and the final distribution of RWA tokens.

Therefore, it is difficult to achieve true decentralization in this track to some extent.

Although stablecoins are the most basic application of RWA, this report focuses on other subcategories of the RWA track.

-Main categories and participants 🔻

In addition to stablecoins, the categories in which RWA currently occupies a major market share include: tokenized U.S. debt, personal credit, precious metal tokens, bonds, stocks, real estate, and carbon credits.

(1) Tokenized U.S. Treasury Bonds

This category has experienced explosive growth in 2024, from $769 million at the beginning of the year to over $2.2 billion in September;

This growth may be influenced by high U.S. interest rates, which makes the yield on U.S. government-backed Treasury bonds an attractive investment vehicle for many investors;

(U.S. Treasuries are widely considered one of the safest income-generating assets on the market and are often referred to as “risk-free” because they are backed by the U.S. government);

• As of now, the average yield of tokenized treasury products is between 4.5% and 5.5%, but with the arrival of the interest rate cut cycle, this category may suffer a certain impact

Major players in this category include Ondo, Securitize), Franklin Templeton, Hashnote, and Open Eden.

(2) Private credit

This track refers to providing debt financing to enterprises or individuals, which is fundamentally different from the on-chain lending we generally know. Its collateral is usually real assets with real meaning in reality.

The on-chain private credit market is around $9 billion, but it has been growing, with the size of active loans increasing 56% over the past year;

By integrating this track with the chain, the information can be further transparent;

Major players in this field include Centrifuge, Maple and Goldfinch.

As can be seen from the chart of total active loans below, the growth in total market share is very obvious. Looking at the long term, the competition among various participants is quite fierce.

Considering this perspective, given that the current market share gap is not very large, the future situation will not necessarily remain the same.

(3) Tokenization of precious metals

The two leading tokens in this category are Paxos Gold ($PAXG) and Tether Gold ($XAUT) which together have ~98% market share in a ~$970M market.

However, due to the existence of gold ETFs, the general desire to divide gold assets on the chain for easy transfer does not seem to be so strong.

(4) Bonds and stocks

These markets are much smaller and relatively new (market cap is around $80 million);

The bonds here are different from US Treasury bonds, and generally refer to European bonds and bonds issued by individual companies;

Popular tokenized stocks include Coinbase, Nvidia, and the S&P 500 (all issued by Backed).

(5) Real estate, carbon credits and others

Real estate on-chain is one of the longest-proposed use cases, and while it has yet to be fully adopted on a large scale, the track does exist. In this report, we introduce the Parcl protocol, a pioneer in tokenized real estate on Solana;

Beyond that, there’s Toucan, which is facilitating the tokenization of carbon credits. Companies like Toucan are incorporating regenerative finance (“ReFi”) principles into their services, which describes an approach that attempts to align economic incentives with eco-friendly and sustainable outcomes.

2. Project Introduction🔻

(1) OK

Ondo Finance's mission is to provide institutional-grade financial products to everyone. They operate a platform that creates on-chain financial products by working with institutions and completing RWA tokenization, enabling crypto users to invest directly in these assets;

It is equivalent to a financial product management department on the chain. The difference between it and pure on-chain Defi issuance is that the products here are linked to traditional finance;

Its main feature in the market is that it allows on-chain users to purchase U.S. Treasuries, and the platform works with partners such as institutional funds and custodians to manage the underlying assets;

Currently, by offering different major products, you can indirectly hold US Treasury bonds from different angles.

（2）OpenEden

OpenEden has become the largest issuer in the Asian market since its launch in 2023 by offering tokenized U.S. Treasury products;

Users can mint and redeem TBILL tokens using USDC. TBILL is an ERC-20 token that represents the underlying treasury bonds and accumulates the necessary yield earned by the treasury bonds.

However, users can only purchase TBILL tokens if they “qualify as an accredited or professional investor,” and the basic requirement is a net worth of at least $1 million, which may be too high for many people.

（3）Centrifuge

Centrifuge is an L1 built using Substrate that enables enterprises to bring real-world assets such as invoices, real estate, and royalties into DeFi by tokenizing assets and using them as collateral for on-chain borrowing.

（4）Parcl

Parcl is a protocol that tokenizes real estate, allowing users to buy and sell parts of a real estate market index, entering the real estate market without having to purchase physical assets and with a low barrier to entry.

• (By using the oracle Pyth to provide real-time tracking of real estate prices, ensuring that the token value accurately reflects the underlying real estate market data)

（5）Toucan

Toucan is a platform that tokenizes carbon credits, allowing companies and individuals to buy, trade, and redeem carbon credits to offset their carbon emissions in a decentralized manner;

Base Carbon Tonne, or BCT for short, is the main token representing carbon credits in the Toucan ecosystem. By integrating with protocols such as KlimaDAO and Curve, users can exchange carbon credits for on-chain returns or use them in various DeFi protocols to incentivize environmental protection behavior.

(6) Jiritsu

Jiritsu is an L1 built on the Avalanche subnet. It has a ZK-MPC oracle and supports various legal frameworks for RWA tokenization, including gold, real estate, and TradFi products such as ETFs;

The platform has a dual validation system: one validator handles corporate asset compliance and valuation, while the other focuses on real-time market valuations of assets such as bonds.

3. Survey results and prospects 🔻

Several key technical considerations have emerged in the RWA space 👇🏻

(1) Centralization: RWA protocols often exhibit a higher degree of centralization in their smart contracts or overall architecture, which seems inevitable given the nature of RWA and regulatory requirements.

(2) Third-party reliance: There is a high degree of reliance on off-chain institutions, especially in terms of asset custody

(3) Benefit considerations: The benefits generated by RWA tokens may not be particularly competitive (compared to the participation threshold)

(4) Oracle Solutions: The growing demand for more powerful oracle solutions has led to the emergence of RWA-specific oracle protocols

(5) Privacy and Compliance: Zero-knowledge proof technology is emerging as a potential solution for balancing regulatory compliance with user privacy and autonomy.

-Will leading technology advantages help RWA's growth?

While advanced technology is not always essential for RWA, zero-knowledge proof technology plays a vital role in providing verifiable privacy and regulatory compliance without the need for a centralized KYC process;

ZK technology allows users to prove regulatory compliance (e.g. identity, asset ownership) without revealing sensitive details, ensuring compliance while maintaining privacy;

ZK Soulbound Tokens (zkSBTs) can further embed privacy into blockchain identity systems, enabling users to meet regulatory requirements while keeping personal data secure and private;

The legal environment around RWA is still evolving, many protocols still operate in a centralized manner, and various technologies including zk have a lot of room for improvement in implementation;

Moreover, although many RWAs are issued on public chains, they are not necessarily licensed and compliant. For example, in the cases listed in this report, there are compliant products that require a high threshold to participate;

This means that many current RWA protocols have similar limitations to traditional finance (even with the added element of crypto or blockchain, which may be seen as greater risk to some);

RWAs still have some way to go before they can truly expand permissionless access to financial products traditionally reserved for professional investors.