RWA will be the core track of the next bull market, and the three factors of assets, funds, and users will bring resonance to the market. The infrastructure still needs to be built, and projects with debt/market funds/stable coins as the core are just the appetizers, and the fun is yet to come.

The current paradigm innovation in the industry is still poor. The previous rapid growth of wealth was essentially due to "network quality improvement". The new narrative in the industry and the loosening of the financial system also enabled risk assets in the previous cycle to achieve considerable growth performance;

But this level of infrastructure innovation and network expansion seems to be getting further and further away from us. Simply put, that period was a great history, and this level of profit margin that was made without doing anything may be difficult to reproduce again.

During this period of innovation, whether it is the exciting composability benefits of DeFi or the innovations of PFP-NFT and Gamefi, the window period for these high returns is too short. Many times, we look at projects in the morning, practice in the afternoon, and collect the harvest in the evening. DeFi RUG loses more money than it earns;

Using blockchain to combine traditional industries with the financial sector and to improve quality and efficiency is also a good way to start. Although TradFi does not care about transparency, a sufficiently rich product can also obtain relatively safe returns. Such products do not have high returns and need new narratives to increase their appeal.

This type of traditional financial product enabled by blockchain has made finance equal and democratic. The national alliance chain issued by Thailand allows residents to subscribe to national debts that require 1,000 baht with a share of 1 baht, which greatly reduces the entry threshold for ordinary people;

The RWA experience and the composition of the underlying assets will still be a problem; the risks of traditional finance will be highly correlated with the underlying assets of RWA, but the transparency of the underlying assets is unknown. The systemic risk of black swan events in this process is something we need to be vigilant about. There are still many possibilities for improvement in the user's use and interaction fluency of the product;

Regulatory and legal conflicts still exist. The FTX incident taught me that when buying and trading, you must know where to defend your rights and claim compensation. However, at this stage, it is a bit difficult for a regulatory agency to be responsible for RWA assets. If there is a technical failure, the determination of responsibility is also vague.

Therefore, participating in the RWA asset building may be a good way. We can build a more interactive bridge to make asset flows smoother and allow more and better assets to be traded, such as carbon. Currently, there are a large number of high-quality assets that cannot be traded smoothly. Early Bitcoin also had such a period.

Be wary of projects that are under the banner of RWA but are nominally Ponzi schemes. I will not go into details about this type of project.

Although RWA was initially met with skepticism about the new round, this year has seen a boost in RWA confidence, with multiple institutions entering the space. Tokens representing the RWA concept have shown a bullish trend, bringing a glimmer of hope to the relatively sluggish crypto market.

Since the beginning of the year, big names such as Binance, Goldman Sachs, Hamilton Lane, and Siemens have entered the market and attracted attention to RWA by developing on-chain US debt agreements. In a bear market, the low returns of DeFi cannot meet the needs of crypto users. However, on-chain US debt provides a new income model.

Recent headlines have drawn attention to the RWA space. Compound founder Robert Leshner formed “Superstate” to tokenize U.S. Treasuries on Ethereum. Maker made a significant investment in U.S. Treasuries, raising its short-term debt investment limit to $1.28 billion. Bank of China International issued $200 million worth of digital notes through UBS, becoming the first product to be tokenized on the Ethereum blockchain in compliance with Hong Kong and Swiss laws.

The Hong Kong Securities and Futures Commission (SFC) has also changed its attitude towards RWA assets. In an interview with Eliptic, Elizabeth Wong, head of the fintech group, hinted that an update would be introduced to no longer define security tokens or RWAs as complex products. The regulation of RWAs will be based on the underlying assets, giving retail customers the opportunity to participate.

The famous figure Justin Sun has also joined the RWA camp. TRON Ecosystem announced the launch of the RWA stable pledge product stUSDT, allowing users to pledge USDT to obtain RWA rewards.

After brewing at the beginning of the year, the entry of traditional DeFi protocols and national teams has driven the response of the RWA secondary market. The prices of tokens such as MKR and COMP have risen sharply.

As these events unfold, the crypto community’s skepticism about RWA appears to be waning. Many native cryptocurrency users scoffed at RWA, just as they did with DeFi Summer in 2020, missing out on a wave of innovation.

Considering the broad definition of RWA, the actual development prospects of this field are still unclear. This article uses the RWA sector data provided by RootData to focus on the financing and business model innovations reflected in early projects in this field.

RWA Early Projects:

MakerDAO（MKR）

Compound（COMP）

AAVE

Ondo Finance Centrifuge（CFG）

Goldfinch（GFI）

MAPLE（MPL）

TrueFi（TRU）

Synthetix（SNX）

Polymesh（POLYX）

Props（PRO）

These early projects around on-chain bonds, credit, and real estate are worth watching. We selected these projects based on their financing status, partnerships, and market attention, and they are paving the way for the future of RWA. #达摩院 #合约锦标赛