Is RWA really available? What is the recent development?

Author: Lao Bai

After talking about the market's view of the East and West level perspectives, today I happened to use YZi Labs to officially announce the investment in the Plume Network RWA platform to talk about the recent changes in the RWA track I have observed.

This matter has to be broken down into four parts

1. Is RWA really an application scenario, or PMF
2. Which RWA assets are suitable for on-chain and which are not suitable for
3. What were the solutions in the past and what are the solutions now
4. RWA Do you feel the wind direction in the past few months?

Let’s talk about 1 first - whether RWA really has application scenarios , or PMF - (We first remove the stablecoin track on US bonds. Usual, MKR, etc. have already found PMF) Taking US stocks on the chain as an example, this is the most terrifying category on Twi. Many people think that it is a waste of time to go on the US stock chain. They really want to speculate on US stocks. Any target on the chain is more volatile than the US stock market. There is no need to play stocks on the chain.

I have different views on this, and I personally think that the US stock market has its meaning on the chain.

1. From the channel perspective - indeed, most of the big guys above A8 and A9 use securities platforms such as Futu and FirstTrade, and diversified investments such as coins, stocks, and gold. But I believe that most retail investors in the circle do not have US stock accounts. On-chain US stock trading can at least open up their purchasing channels without any threshold.

From another perspective, the total market value of stablecoins such as USDT/USDC is getting bigger and bigger, which is another way of spreading US dollar hegemony compared to traditional finance. If Crypto's smart wallet experience through stablecoins + Payfi + Alipay-like Alipay really goes to Mass Adoption one day, do you think the US is willing to take over the US stock market for them? Most people in other countries in the world prefer to open an account for various bank brokers to buy half-dead stocks in their own country, or just like Taobao shopping, to place an order to invest with one click on the seven sisters in the world's largest economy?

2. From the application scenario, imagine such a Case. As a young player, you made a big profit of 100,000 U for Mubarak in the past few days. You know that Tesla has recently cut its mark, which is a good time to buy at the bottom, and then you want to exchange this 100,000 U for Tesla's stock.

Even if you have a US stock account, you have to first turn the 100,000 U OTC into fiat currency, and send the fiat currency to the securities company's account through the bank, and then start buying from the securities company. This process basically takes 3-5 working days (I bought US stocks in Australia through FirstTrade in 2017 before I came into contact with Bitcoin. Swift alone was 4 or 5 days, and I had to charge a handling fee of several dozen US dollars). If one day your Telsta rises, you want to sell it and exchange it for BTC or U, this process has to be done again... Imagine if there are US stocks on the chain and the U earned by Meme is replaced by Tesla in seconds, the reduction of friction costs is really not a little bit, but a 10-100-fold level experience improvement

Then talk about 2 - which RWA assets are suitable for linking

Similarly, T-Bill, which has proven itself, is not discussed. Other RWA assets actually depend on who is targeted.

For the To C side, stocks are undoubtedly the most suitable. Most retail investors are most likely not exposed to first-tier private equity. If you tokenize the equity of a non-listed company, few people will be able to understand + buy + hold for a long time. There are also private credit collaterals on Centrifuge, such as bridge loans in the real estate market, loans for corporate accounts receivable, etc., which are also not suitable for To C. The only thing most C-end users are familiar with is stocks. To C More scenarios should be to connect an asset to users who have not purchased it through the chain, which is a process from 0 to 1.

For the To B side, there are a lot more things that can be tokenized, but compared with To C from 0 to 1, To B side should be more of a reduction in friction from 1 to 100. Just as first-tier private equity was originally circulated between some institutions and high-net-worth investors, the bridge loan mortgage placed on Centrifuge is likely to be used to borrow money from the bank, but the flow process is relatively cumbersome and the friction is relatively large. Putting it on the chain is like Payfi. As for Swift, it can achieve a significant enhancement of user experience and circulation speed.

Speaking of this, I remember that I talked about an RWA project last year. Their parent company is an asset management institution with a relatively high ranking in the United States. They plan to issue the first-tier equity of customers on their asset management platform, such as Musk's SpaceX, on their own trading platform in the form of tokens, so that the tokens can be easily circulated and changed hands, and finally SpaceX will settle directly in one lump sum when it goes public. So To B, in addition to the transaction users targeted by institutions and enterprises, the issuance subject is actually relatively limited. Just like the example above, unless you have assets to manage a large amount of SpaceX's equity in your own hands, you are simply an STO or RWA platform. If you want to attract SpaceX equity holders to you, the issuance of a token representing SpaceX equity, which involves resource cooperation, legal terms and other aspects, and has a lot of friction.

There are many intermediate states, either To C or To B, such as the IP chaining of Story Protocol, or the royalties of a novel, the box office of a movie, and the sales of a game. It feels like it is still in the early stage of exploration and needs to be tried one by one to falsify. For example, influence Tokenize, FT failed, while Kaito was relatively successful. Celebrity Time Tokenize, http://Time.Fun disappeared after a few days of popularity... These things have to be done slowly

Next is 3 - What were the solutions from the past and what are the solutions now?

Or take the US stock market as an example - the past solutions were basically synthetic assets, representing SNX, Terra's Mirror, and GNS

This path has been basically falsified at present. The above three platforms also removed the synthetic US stock assets from the previous ones early. There are two reasons. First, everyone is not interested in "fake assets" synthesized by stablecoins or local currency (SNX). You can see that by comparing the size of BTC, WBTC, and SNX. To be honest, synthetic assets are not as good as WBTC. This kind of "mapping assets" makes people feel at ease. Second, Sec checked the water meter all the time back then. Although synthetic assets were fake, you don’t need a reason to check Sec, so it’s better to have less than more things. These platforms have also removed these synthetic U.S. stocks.

Now that Trump is in power, Chairman Sec has changed, the current supervision in this regard is obviously much better than in the previous two years. The new US stock market has seen two plans to be launched.

One is to follow the traditional compliance Broker Dealer route. The moment when a user buys tokenized stocks on the chain, triggers the corresponding operations of off-chain compliance Broker in the US stock market. In essence, the order placed by Robinhood is "buyed" by Citadel in the stock market. The advantage is that the stock you buy is "real stock", or at least it is made of this Broker 1:1 real Back, which is somewhat similar to WBTC to BTC. The disadvantage is that trading time follows the stock market completely, and you cannot 24x7 like Crypto. You also have to build trust in this Broker or platform. Then, a Taxation Event will be triggered when selling. American citizens may need to submit tax-related forms. Non-US citizens must at least do KYC or something, which is more troublesome.

The second is the Ondo Global Market approach. After looking through their documents, they originally wanted to follow the Broker Dealer route mentioned above, but later changed to a stablecoin-like approach, that is, they are allowed to cooperate or Authorize Issuer to directly issue tokenized stocks (just like Tether issues USDT and Circle issues USDC). The advantage is that it is more flexible, and it is possible to get rid of the restrictions on US stock trading hours and finally settle at a certain time through Issuer. The disadvantage is that it is highly likely that it can only target Non-US users, and American users cannot use it. Then there will be different CAs of the same stock issued by different Issuer (just like a new chain and different bridges in the past USDCs are incompatible with each other). These specific details are not written, after all, the product will not be available next year.

Finally, an RWA platform like Plume feels more like a Framework, which contains KYC/AML, data storage/execution, consensus, ZKTLS verification, etc. In theory, it can allow cooperative institutions to come here to issue various Tokenized RWA assets. This will return to the previous topic of "what assets are suitable for linking" and will not be repeated.

Finally, let’s talk about 4 - RWA, have you felt the wind direction in the past few months

If you pay attention to it, the RWA wind has actually blown quite violently in the past two months. I will give you a few "news" I have observed.

1. Ondo mentioned above plans to launch Ondo Global Market at the end of the year or next year, on-chain stock market, and Ondo has been very close to Trump's WLFI recently, and there will be cooperation.

2. Sui has also been hugging WLFI's thighs recently

3. Frax actively embraces Cedefi and recently launched frxUSD, which is a collaboration with BlackRock+Superstate

4. Ethena's new product, Converge, today - focuses on one of the two most important scenarios they believe that the district fast chain is the most important - Storage and settlement for stablecoins and tokenized assets

5. AAVE intends to issue a new coin, Horizen, which has caused a stir in the community. Stani personally came out to clarify - "The Horizen plan is to fill Aave's currently missing RWA business segment, which is expected to overtake Aave's current business line in 5 years."

6. The Korea Financial Services Commission released a Release in February 2025, intending to allow corporate entities to conduct virtual asset transactions in phases. I learned from friends in South Korea that South Korea may restart the STO (the name of the previous cycle of RWA). If you think, allowing "enterprise entities to trade virtual assets", it is definitely not for your company to speculate in coins, but it is definitely to turn some real-life financial assets into "virtual assets". Fortunately, it is designed for circulation between companies.

7. YZi Labs officially announced today that it has invested in the recently popular Plume Network RWA platform

We can't ignore the Momentum composed of these messages, so my current view on the main track with the next Circle is the PayFI+RWA+ Consumer APP of Web2.5. As for AI+Crypto, I can only say that there is hope, and I am still chatting + observing. After I finish writing the next article "Something worth talking about on ETH and Solana", I will write a separate article about recent thoughts on AI+Crypto, which will end the fourth part of this collection.