In 2024, RWA (Real World Assets) has become a hot topic of discussion in the Web3 world. As a bridge between real assets and blockchain technology, RWA provides a new possibility for asset tokenization. However, in a crypto market known for high returns and speculative assets, the appeal of RWA still faces challenges. Compared to native Web3 assets, the returns of RWA appear relatively 'conservative', and compared to tokens that can double quickly, the stable returns of RWA seem less captivating.
But those who truly understand RWA know that its value goes far beyond stable long-term returns. The core potential of RWA lies in its ability to drive the digital transformation of real assets, injecting more trust-based assets into DeFi (Decentralized Finance), and shaping a new economic order in the Web3 world.
To address the resistance to widespread adoption and unleash the true potential of RWA, RealtyX has teamed up with several leading projects in the RWA field to launch a movement to promote the deep integration of RWA and DeFi – the MTR RWAfi Movement. This movement is driven by innovation and education, exploring new possibilities for RWAfi (RWA + DeFi) through collaboration with leading projects and blockchain platforms.
Injecting sparks of thought collision into the industry, the first discussion focuses on 'Mapping the RWAfi Ecosystem', delving into the composability potential between RWA and DeFi, laying the foundation for future ecosystem development. From heated discussions to practical actions, the RWAfi Movement is redefining the intersection of real assets and decentralized finance, leading the industry towards a future of greater trust, efficiency, and long-term value.
This discussion is hosted by Jade, the strategy head of RealtyX, co-hosted by the Plume blockchain team, and features several heavyweight guests including Teddy, co-founder and CBO of Plume, PG, founder of the RWA market project Polytrade, and Claire, CEO of the perpetual contract protocol Silver Koi.
The discussion will be conducted in English, and here are the highlights and translations of the core content.
Translated by Sanqing, contributor of RealtyX DAO community.
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Jade (RealtyX): Hello everyone! I am Jade from RealtyX, and I warmly welcome everyone to the first discussion of our MTR seminar and AMA series. Today’s theme is 'Exploring the RWAfi Ecosystem,' and I will be the host for this discussion.
Before we begin, I would like to briefly introduce the meaning of 'MTR':
1. First of all, it represents 'The Most Trusted and Rewarding RWAfi', reflecting our commitment to building a meaningful real asset and decentralized finance ecosystem.
2. Secondly, 'MTR' is also the name of the Hong Kong subway system, and we want to pay tribute to Hong Kong, as RealtyX was born here and is currently also a member of the Hong Kong Cyberport incubation program. The MTR subway system is the best metaphor for our efforts to promote development and strengthen connectivity in the RWA field.
Next, we are fortunate to invite several industry pioneers and innovators, who come from Plume Network, Silver Koi, and Polytrade. Let’s start with a brief introduction of each guest and their projects.
Teddy (Plume Network): Hello everyone, I am Teddy, and I am very happy to participate in today’s discussion. Plume is a permissionless EVM network focused on the RWA field, and our core goals include: tooling development, facilitating asset distribution, and enhancing asset composability.
We are committed to bringing new users into the RWAfi ecosystem, unlocking trading and liquidity opportunities for them while leveraging these excellent projects on today’s Twitter Spaces to achieve this goal. Thank you again for the invitation, and I look forward to the upcoming discussion!
Claire (Silver Koi): Hello everyone, I am Claire, and Silver Koi is the first decentralized exchange (Equities Perp DEX) supporting perpetual contracts for stocks. It may sound a bit complicated, but it's actually very simple. We allow users to trade perpetual contracts for assets such as stocks, commodities, and forex on one platform, offering up to 200x leverage while maintaining low funding rates and low slippage. Our goal is to provide users with an efficient and low-cost trading experience.
PG (Polytrade): Thank you, Jade! I am glad to participate in this discussion today. I have a deep connection with MTR (Hong Kong Subway) as I have spent a significant part of my life in Hong Kong. So, I really love everything here. I am the founder and CEO of Polytrade. Polytrade has now become one of the largest RWA asset trading markets in the world, and we will soon transform into an RWA center. Our philosophy is very simple. Just as teams like Plume are building infrastructure to help more users and projects enter the RWAfi ecosystem, our job is to build the front end or DApp so that all ecosystems can seamlessly connect, allowing users to interact easily.
In other words, users can complete everything related to RWA on Polytrade without leaving the platform, such as tokenization, asset management, indices, loans, and all functionalities. We position Polytrade as a super application for RWA, which is our current core goal.
Jade (RealtyX & Host): Great! Today, our RWA scene could be described as all-encompassing. Fantastic! Let's jump into the first question, but let’s focus on the RWA part first, and we can delve deeper into the RWAfi ecosystem later. In the past year, RWA (Real World Assets) has become a very hot narrative. So, what inspired you personally to enter this field? For your projects, is it to solve a specific problem, or to seize an opportunity? Especially by focusing on real assets to achieve your goals. Let's start with Teddy, then Claire, and PG.
Teddy (Plume Network): Yes, this is a great question. For me, this idea gradually took shape after I joined BNB Chain. At that time, I was on their ecosystem team, responsible for bringing in various projects, whether DeFi, GameFi, or SocialFi. RWA (Real World Assets) was already a hot track, but to be honest, the entire field was still in the early exploration stage.
I first came into contact with RWA in 2021 when I was responsible for related research in the Coinbase team. However, after joining Binance and BNB Chain, my task was to introduce various RWA projects. Several core issues faced by these projects often recur, such as insufficient tool support, lack of composability, and distribution challenges, especially how to accurately reach the right holders. Our ideas gradually took shape based on solving these problems.
My co-founder and I have complementary backgrounds; he mainly comes from investment and engineering technology, while I focus more on ecosystem building. We noticed that most current RWA projects are dominated by people with traditional finance (TradFi) backgrounds, who attempt to move traditional financial products onto the blockchain. But the problem is that mainstream users on the blockchain are more crypto-native rather than traditional finance users, making it challenging to find product-market fit.
Therefore, we hope to look at RWA from a whole new perspective. Our goal is to create more use cases for on-chain users through our protocols, such as lending, trading, and unlocking liquidity. Projects like Polytrade, RealtyX, and Silver Koi are all focused on these directions. We want to provide on-chain users with liquidity and trading opportunities they previously could not access.
We always believe that to truly develop the RWA field, we must start from the needs of on-chain users and design products that they can understand and accept. In fact, the core of all this revolves around product-market fit. If we look back at the history of RWA development, you will find that stablecoins are the products that best match market demand because they are permissionless, highly liquid, and appear more similar to crypto assets in both usage and functionality.
At Plume, our philosophy is to abstract away the underlying complexities and package the entire ecosystem in a way that is easy for on-chain users to understand. What users interact with on the surface are decentralized financial products, but behind them are real-world assets that bring actual returns to users.
Currently, we are tokenizing various assets such as alternative assets, government bonds, collectibles, GPUs, mining rights, and more. We hope to bring these assets on-chain, allowing more people to fairly access the benefits of RWA. For us, this is the true direction of growth in the RWA field – creating new liquidity and yield opportunities for people through DeFi, breaking traditional limitations.
Claire (Silver Koi): Thank you, Teddy, for the wonderful sharing. Next, I will start with my personal experience. I lived in Asia for a long time and noticed that in many regions, it is actually very difficult for ordinary people to access foreign markets. Take the US stock market as an example; it is the largest market in the world, but over 4 billion people find it hard to access it. Many friends around me want to invest in the US stock market but must go through very complicated processes, such as needing up to 10 different brokerage accounts, which often require high minimum deposits to open. Furthermore, they frequently have to pay seven to eight different fees, and if they want to trade fractional shares, the fees can be even higher.
All these barriers make it difficult for many people to access better investment opportunities. This is also the original intention behind the creation of Silver Koi. We firmly believe that the opportunity for wealth growth should not be exclusive to a privileged few. Why can’t people in other regions – and I don’t just mean 'non-US', but many people in various regions – grow their wealth like others? They should also have the tools available to leverage.
Our goal is to make trading extremely simple. We hope that all operations, such as clicking to place an order, can be completed within five clicks, and trades can be settled in less than a second. In fact, we have already achieved this. As for fees, I just mentioned that high fees are one of the main obstacles many people face. We eliminate all these fees for users: no rollover fee, no management fee, and no additional charges for fractional share trading. In addition, we are committed to providing very low funding rates to stay competitive with major centralized exchanges.
Of course, another focus for us is speed. All operations can be completed very quickly, and users can freely transfer funds at any time. Through these efforts, we hope to truly achieve our goal of making investment simple and straightforward.
PG (Polytrade): I really enjoyed Teddy and Claire's sharing just now, as they mentioned important reasons for entering and delving into the RWA field. For us, when we ventured into RWA, it was still a vague term. At that time, almost no one really understood what RWA meant.
We started venturing into this field in 2021. I come from a Web2 background, having worked in trade finance for nearly a decade. I wanted to bring these highly valuable assets onto the chain and provide DeFi liquidity for small and medium-sized enterprises (SME) borrowers, which is the opportunity that led to the birth of Polytrade in 2021.
At that time, the term RWA seemed somewhat ridiculous to us because, literally speaking, almost everything real could be called RWA. Nevertheless, some terms gradually gain acceptance in the market, and RWA is one of them. Over the past four years, Polytrade has been working hard, starting with the tokenization of single assets, and we focused on trade finance. Subsequently, we transformed into a market-oriented platform model.
In this process, we found that the biggest challenge lies in asset discovery. Therefore, we hope to become the 'OpenSea' in the RWA field, enabling users to easily discover the dynamics of various protocols, chains, and industry trades, and understand which protocols are functioning, which assets are trading, and which tokens can be used.
Subsequently, we began to engage in secondary trading of these assets and launched 'Buy Now, Pay Later' (BNPL) and other innovative financial products on the platform. Eventually, we realized that there was still an important link missing in the entire ecosystem, which is speculation. Most people are not inclined to speculate on RWA, for example, very few would bet on whether gold would rise by 20%. The characteristic of RWA is its stability, which essentially contrasts with the high volatility of crypto assets.
Therefore, our goal is to introduce speculation for Web3 users, and our solution is based on a token model. We aim to turn Polytrade into a super application where users can not only trade assets but also trade, stake, and lend RWA tokens. We are also developing prediction markets to further enrich user experiences.
Currently, we have made good progress, with over 60,000 to 70,000 active users participating. We have also partnered with Plume to actively explore in the testnet and plan to complete the final integration. For users, our goal is to provide a comprehensive application entry where they can complete all operations.
The advantage of this model is that we are not competing with other protocols, but providing a distribution platform for them. This is a purely distribution strategy that allows us to comfortably cooperate with all protocols and add value to the entire ecosystem.
Jade (RealtyX & Host): Great, I think the sharing from you just now has laid a very good foundation for my next question. Teddy and PG both mentioned that while RWA holds tremendous potential, there is a critical challenge of insufficient appeal to Web3 native users. These users often seek higher returns and fast-paced financial speculation.
So my next question is still directed at Teddy: In this context, from your perspective, why is it so important to create an interconnected RWAfi ecosystem? Meanwhile, how does Plume Network support and promote the development of this ecosystem through infrastructure building? I know you've partially explained this in your previous answer, but this time we can explore this topic more deeply.
Teddy (Plume Network): This is a great question, and I'm also excited to delve into this topic. As I mentioned earlier, creating an RWAfi ecosystem is very important for us because traditional RWA is often static. People buy tokenized government bonds or private credit products, but most of these assets just 'sit' in wallets without additional utility or yield.
By building an RWAfi ecosystem, people can perform more operations with these assets, such as bringing them to different lending protocols as collateral, lending, or even participating in decentralized finance (DeFi) circular strategies. These functionalities are unprecedented in the traditional RWA field. If you are just developing DApps on a generic blockchain alone, it is difficult to achieve these functionalities. Currently, generic L1 and L2 chains perform well in the overall ecosystem, but they cannot provide sufficient support for certain vertical needs like market expansion, demand creation, and ecosystem incentives. This is why we are building the RWAfi ecosystem.
We hope users can trade RWA just as they do with crypto assets, while ensuring compliance. We achieve this through multiple products from Plume. For example, our Plume Arc is an asset tokenization engine that allows anyone to tokenize any asset in a compliant way. We integrate various compliance solutions and tokenization schemes and develop in-house transfer agents while making more modifications to the chain layer protocols. Another of our protocols is Nest Protocol, which is a yield stream protocol. Users can invest in yield tokens representing future cash flows. This allows ordinary users to access assets that previously required qualified investor status or completing KYC to participate. This is somewhat similar to how DAI and SI work; we reproduced this mechanism at the underlying technical level.
By combining these products, we can unleash tremendous network effects within a single network. Thus, when capital enters our ecosystem, it can flow continuously. For example, users can invest in one asset, then plan across assets, participate in more DeFi activities, like trading on the Silver Koi platform or collaborating with Polytrade, or even access these assets through some aggregator. Plume has a large number of assets, and we hope to integrate DeFi projects with RWA in the same ecosystem to create new opportunities for users.
Our testnet has proven the potential of this model. In just two months of testing, we achieved 280 million transactions, covering about 18 million wallets, of which 4 million are active unique users. This scale is unimaginable in traditional RWA projects.
In contrast, traditional RWA projects often find it difficult to attract users. For example, based on my recent observations on Etherscan, the holders of Ondo Protocol might only number around 50. However, by combining RWA with DeFi, we allow users to truly explore its potential.
An excellent example is our pre-staking event two weeks ago. The target TVL for this event was originally $5 million, but it was filled in just 70 seconds and eventually reached $30 million in TVL within 90 minutes. This growth rate indicates that building the RWAfi ecosystem can bring true product-market fit for users.
We believe that collaborating with projects like RealtyX, Polytrade, and Silver Koi is the best way to drive development in this area, and it is also why we focus on building the RWAfi ecosystem.
Jade (RealtyX & Host): This is fantastic! So, from the project's perspective, how is the situation? Perhaps we can first ask PG from Polytrade to share. From the project's perspective, what is the difference between an interconnected RWAfi ecosystem with DeFi elements and one without? How will this bring value to your users?
PG (Polytrade): We are all actually working toward the same goal – promoting the popularization of RWA. We want more people to believe in RWA and trade more on-chain instead of relying on off-chain operations. Continuous efforts are needed to attract more Web2 users, showing them the real advantages brought by Web3, such as the convenience, security, transparency of on-chain trading, and potentially lower costs.
Many of our team members come from Web2 backgrounds, so we are very aware of the issues with traditional financial systems, as well as recognizing that the financial world needs to be redesigned and reinvented. Of course, this is no longer a novel viewpoint. We have passed the stage of needing to sell Web3 to people – Bitcoin has touched $100,000, and institutional participation and acceptance are evident. More and more financial tools and products are entering this field.
For example, we have established a partnership with MasterCard and are continuously developing DApps with them for institutional clients. While our users may not care about our collaboration with MasterCard, we understand the importance of this infrastructure.
Regarding the RWAfi ecosystem, I think it's a great concept, but ultimately, we are building a parallel financial world that allows all real-world assets to migrate from Web2 to Web3. This not only brings greater value to users but also makes these assets more accessible to everyone. As Claire mentioned, why can’t someone trade assets available globally? Why should geographical restrictions or capital thresholds prevent me from purchasing a certain asset? Why can’t I buy a share of Apple for $10 when this opportunity is only available to those with millions of dollars?
This is precisely the direction that the entire RWAfi ecosystem should ultimately strive for. As a market-oriented platform, one of our greatest advantages is the ability to observe and participate in various exciting projects, and I believe Plume has had similar experiences. We see many projects tokenizing different types of assets, and the diversity of these projects exceeds our imagination. They are not limited to financial assets or real estate but also extend to green energy, climate projects, renewable resources, and commodities.
Currently, Polytrade has received a tremendous amount of protocol requests, and we even need to pause activities to better plan how to support and integrate these protocols. This speed of innovation and diversity excites me immensely. Polytrade will continue to strive to be the largest distribution platform in this field. Partners like Plume continue to bring us users who need a simple and friendly front-end experience, which is the value of our platform.
In addition, our close relationship with the blockchain has become crucial, as we not only help users acquire assets but also create various on-chain activity opportunities for them. I am very confident in the entire RWAfi narrative and believe this is the right path toward achieving larger-scale adoption.
Claire (Silver Koi): These are all excellent answers, and my response will be a bit shorter. For Silver Koi, our goal is to make investment accessible to everyone. The importance of building an interconnected RWAfi ecosystem lies in its ability to help us achieve this goal. As part of this ecosystem, we can gain multi-faceted value from it. For example, users can easily access a wider range of investment opportunities, such as stocks. They can also invest in real estate through RealtyX or explore other asset platforms through Polytrade. Through such an ecosystem, users can actually reach various asset classes like stocks, commodities, forex, and bonds. Secondly, with this ecosystem, sharing infrastructure and liquidity becomes easier, which not only significantly reduces costs but also accelerates transaction speeds while greatly enhancing user experience. Ultimately, this ecosystem not only helps various projects collaborate better, but also makes the user experience smoother. So from our perspective, this ecosystem is a win-win for both projects and users. That's my answer.
Jade (RealtyX & Host): I personally resonate very much with what the guests just shared. For RealtyX, I believe a supportive ecosystem and an interconnected ecosystem are crucial for the thriving development of projects. Currently, we have partnered with Plume and also listed our assets on Polytrade a few months ago, and we can see that everything is closely linked. As Claire said, a smooth and seamless user experience is key to bringing the next million or even billion users into this field.
Next, let's continue the discussion. In fact, my next question has already been partially answered in the previous responses, but I still want to extend it a bit, regarding the synergies we can achieve in the interconnected RWAfi ecosystem. If you would like to add more, you can talk about what unique advantages your projects have that can complement other projects in the RWAfi ecosystem, or share what you are currently working on with other projects to better help everyone understand how RWAfi operates in practice.
Teddy (Plume Network): We can use the three projects present today as examples to demonstrate the synergy within the RWAfi ecosystem. Once we launch the mainnet, yield products will become one of the core highlights in the ecosystem, and many users will come to Plume due to the diverse yield opportunities we offer.
Suppose users transfer assets to Plume through our main bridging partner LayerZero; they can invest in RealtyX's yield assets through Polytrade's application and interface. Once they acquire these assets on the RealtyX platform, they can further use these assets as collateral to enter other lending protocols. For example, in the future, Silver Koi may accept these assets as collateral, allowing users not only to earn yields but also to trade on the Silver Koi platform. This ability to combine assets is a major highlight in the DeFi space, making the use of assets more diverse. Such network-level composability has rarely been seen in the past, but it is now becoming a new possibility.
Additionally, we are seeing many protocols developing new strategies around this ecosystem. One of the main directions is stablecoin circular strategies. For example, users can use PUSD (Plume's stablecoin) as collateral to borrow more stablecoins, and then reinvest them into PUSD, continuously cycling. Through this method, users can elevate their original stable returns of 8%-11% to 20%-30%.
The RWAfi ecosystem provides strong support for these strategies, enriching the yield model of assets and giving users the opportunity to enhance returns through innovative means. This is a very exciting field, and we are seeing more and more opportunities emerging, with promising future developments.
Jade (RealtyX & Host): Thank you, Teddy! Your answer was very clear and helped us better understand how the RWAfi ecosystem brings real value to users. Let's move quickly to the final question. In the next 12 months, what do you think are the key indicators for the success of the RWAfi ecosystem? Are there any potential obstacles that need to be overcome?
Claire (Silver Koi): Okay, I'll make a simple prediction. Let's first talk about the obstacles, which may be one of the concerns for everyone, that is regulation.
Regulatory issues may be one of the biggest challenges we face right now. The overall legal environment and rules are not yet clear, and each country and jurisdiction has its own rules. Especially in the United States, this point is particularly uncertain. While the situation may improve after some policy adjustments, no one can be sure. From the perspective of startups, this is particularly difficult because sorting out these different rules often requires a lot of time and resources. I hope that in the next 12 months, the legal environment can become clearer. Meanwhile, this is also one of the purposes of the RWAfi ecosystem – we can share knowledge on legal matters and even share some consulting resources. This actually also responds to the question you raised earlier.
Next, let’s talk about key indicators of success. We can measure this from many aspects, but the most direct is the number of new users. Here, 'new users' includes those introduced from the Web2 world, as well as those from the crypto-native user base. For Web2 users, the challenge lies in educating and guiding them, such as teaching them how to use crypto wallets and other tools. For Web3 native users, although they are familiar with crypto assets, they may know little about traditional markets. The challenges here may be related to factors like age and educational background. Achieving progress in both areas would be an incredible accomplishment.
Another key point is liquidity.
Teddy also mentioned this point. Plume and the whole ecosystem are working hard to provide more shared liquidity for different projects, enhancing the depth of capital pools and the variety of assets. This can bring users more competitive pricing. We also invest significant efforts in the platform's performance development while trying to introduce high-quality liquidity to ensure users experience less slippage and lower fees.
Jade (RealtyX & Host): Claire's answer has been very comprehensive. For Realty X, we also face regulatory challenges, which is an issue that all RWA projects need to pay attention to and strive to overcome. At the same time, we need to engage in more dialogues with the government. Fortunately, we are currently participating in the Hong Kong Cyberport incubation program, which provides us with a valuable opportunity to drive policy discussions.
In the next 12 months, we hope to see a more open and supportive legal environment, which will provide greater space for the growth of the entire RWAfi ecosystem. As mentioned earlier, through the RWAfi ecosystem, we can not only collaborate with other projects but also explore how to advance relevant policy discussions and solve practical issues together.
This AMA discussion has been very enlightening, and I hope everyone has gained something from it. Lastly, thanks again to all the guests and audience members for participating today. Don’t forget to follow these wonderful projects and guests on social media to keep up with their latest developments! Thank you all for listening, and I wish you a pleasant day!
Link to the original AMA audio.