The top ten truths under the RWA demonic wind: Who is waving the sickle, who is harvesting leeks?

Author: Shao Jiayi

Recently, the RWA (Real World Assets) has been so evil that it has been blew up in mainland social media. From the blockchain circle to the financial circle, from self-media to investment groups, it seems that RWA has become synonymous with financial freedom overnight. Various "RWA project parties", "full case service providers" and "teachers" have sprung up like mushrooms after a rain. They all swear to tell you that RWA is the next trend, and if you miss it, you will regret it for the rest of your life. However, the more lively this circle is, the more chaotic it seems. Those who cut leeks, stir-fry the air, sell the anxiety, and are mixed with fish and dragons. I couldn't help but want to pour cold water on the pot - this circle is now a pot of boiling shit soup, with a few leek leaves floating on the surface, and a sickle bubbling underneath.

Today, if we don’t talk about technical details, we will break the emperor’s new clothes and talk about the 10 most heart-wrenching truths in the RWA circle. Fasten your seat belt and let's drive directly.

Truth 1: RWA is a financing tool, not a wealth-making myth

Many people think of getting rich overnight when they hear RWA, thinking that throwing any asset on the blockchain can turn into a golden "wealth password". Wake up! The core of RWA is tokenize real-world assets (tokenized) through blockchain technology and turn them into tradable digital assets. To put it bluntly, it is a financing tool that helps companies revitalize their assets or gives investors more choices. It is not a lottery, nor is it a money printing machine.

Do you think buying RWA tokens is equivalent to buying "Future Hundred-Double Coins"? Stop dreaming. RWA's income model is no different from traditional financial products, it relies on the cash flow or appreciation potential of underlying assets. Those who always shout "invest RWA, wealth freedom" probably want to cut your leeks. RWA can help companies solve financing problems, but it is completely inseparable from the fantasy of getting rich from ordinary people.

Truth 2: The serious compliance RWA, mainland Chinese users can basically

not buy it

If you think RWA is a "feast that everyone can participate in", then I have to pour the first cold water on you: truly compliant RWA products, such as those issued in Hong Kong and Singapore, are basically out of the blue. Why? Because compliant RWA products must comply with strict financial supervision, issuers must ensure that the identity and source of funds of investors are legal, and must comply with local securities laws, anti-money laundering laws and other regulations.

Hong Kong's RWA products are aimed at qualified investors, they must have millions of Hong Kong dollars in asset certification, and must also pass strict KYC (know your customers) and AML (anti-money laundering) audits. You are an ordinary retail investor in the mainland, you can't even open an account, let alone buy it. Those who shout "Everyone can invest in RWA" on WeChat groups and TikTok are not compliant products at all, but are mostly air coins or capital disks, and they are specifically focused on your wallet.

Truth 3: All those who tell you that "invest RWA tokens can make money"

are ready to cut your sickle

The most disgusting thing about the mainland RWA circle is the "air coins" and "fund plate" running all over the ground. The most magical thing now is: a group of people who can't even distinguish between ABS and REITs have begun to teach people how to play RWA. Their words are surprisingly consistent: "The liquidity explosion after traditional assets are put on the chain", "RWA tokens can be traded globally for 24 hours", "Enjoy asset appreciation after holding"... Doesn't it sound familiar? This is exactly the same as the slogan of "blockchain subverts everything" when ICO (initial token issuance). These projects, under the banner of RWA, tell you that you can wait for a hundred times the return by investing a few thousand yuan to buy their "RWA tokens". Brother, aunt, how can such a good thing be like this? These so-called RWA tokens have no underlying asset support at all, and even the white papers are copied, and they are purely making money.

What’s even more outrageous is that some projects also engage in multi-level distribution and recruit head-to-head rebates, which is no different from pyramid schemes. If you invest money, it may seem that the "return" is quite high in the short term, but that is just the leeks in front and the leeks in the back. Once the capital market collapses, your principal will not even be exposed. Don’t believe the nonsense of “RWA is the future of blockchain” and “missing RWA means missing wealth”. Real RWA is a serious financial product, not a casino that makes you bet on your wealth.

Truth 4: If a company does RWA, find brokers, lawyers, and accountants,

and don’t look for “middlemen”

If you want to start an RWA company, you have to keep your eyes open. There is a strange phenomenon in the RWA circle now: a group of middlemen who call themselves "RWA full-case service providers" are more active than securities firms, accountants, and lawyers. Now many "RWA full-case service providers" and "teachers" are emerging in the mainland, and they are hyping up, saying that they can help you put your assets on the chain, issue tokens, and sell them around the world. Haha, most of these people are middlemen, and the work they do is nothing more than pimping and earning you a consultation fee.

To do RWA seriously, it is similar to doing ABS (asset-backed securities) or REITs (real estate investment trust funds). You have to find a triangle composed of professional securities companies, lawyers and accountants. They will help you design transaction structures, conduct regulatory approvals, and perform due diligence and valuation. What can middlemen do? They can’t even figure out the compliance process, so they can at most draw a big pie for you and then charge you a “service fee”. If a company wants to do RWA, don’t be fooled by these “teachers”. Finding reliable financial institutions is the right way.

Truth 5: It’s not that everything can be RWA, assets that cannot be sold

off the chain are useless

There is a classic rhetoric in the RWA circle: "Traditional assets have poor liquidity? Go on the chain! After being on the chain, they trade globally!" It seems that any asset can become a hot commodity when throwing it on the blockchain. Brother, be realistic! Why can’t assets that cannot be sold off the chain be sold by putting them on the chain? The essence of RWA is asset securitization, and the core is the quality and return model of the underlying assets. If your assets themselves are a mess, such as a bunch of inventory that no one wants, an office building that cannot be rented out, and no one buys it after you get on the chain. Poor asset liquidity is essentially due to poor asset quality and has nothing to do with whether it is on the chain or not.

Investors in Hong Kong are not fools, they are smart money, and they invest in RWA to see cash flow, risk exposure, and exit mechanisms. Your "annualized 20%" return model can be seen at a glance as nonsense. RWA is not magic, the logic of assets has not changed. Those who advocate "Everything can be RWA" just want you to spend money to try and make mistakes, so that they can profit from it.

Truth 6: It’s not that you have to go to Hainan to set up a subject, data

compliance is not that mysterious

There is also a "metaphysical" operation in the mainland RWA circle: many project parties say that if you want to do RWA, you must set up a subject in Hainan to complete data exit compliance. Please, how can it be so exaggerated? Data exit must be compliant, but national regulations such as the "Data exit security assessment Measures" have long established the process. Not all data exit must be approved, and only cross-border transmission of sensitive data requires filing or security assessment. The compliance requirements for data exit depend on the specific data type, exit scenario and other factors. Not all situations have to go to Hainan.

What's more, Hainan's special policies are mainly aimed at the offshore business of the Free Trade Port, and are not the only way out for RWA. When an enterprise does RWA, the core is to run the compliance process, such as finding a lawyer to sort out data compliance plans and communicating with the regulator to register. Don’t listen to those tricks of “must go to Hainan” and “Hainan is an RWA paradise”. The path to compliance is always transparent, so why do you need so many twists and turns?

Truth 7: Hong Kong's RWA products basically have no secondary market,

global transactions? Thinking too much!

There is also a common "myth" in the RWA circle: RWA tokens can be traded globally and liquidity is invincible. What is the truth? Hong Kong SFC is particularly cautious about secondary transactions. Currently, RWA products issued in Hong Kong have only opened very limited inter-institutional transactions. Ant Chain's charging pile RWA and Xunying Group's battery swap cabinet RWA are essentially private equity products, and retail investors can't even touch the trading interface. Why? Because RWA is essentially a securitized asset and is subject to strict financial supervision, transactions must comply with the Securities Law and exchange rules.

Do you think that if you buy an RWA token, you can trade 24 hours a global market like Bitcoin? Thinking too much! For Hong Kong's RWA products, the trading targets are usually institutional investors or qualified investors, and retail investors cannot get involved at all. Those projects that boast about "RWA global circulation" mostly use "blockchain" as a gimmick, but are actually a closed capital pool. Liquidity? It does not exist.

Truth 8: RWA track is not the wealth code of ordinary people, don’t be

fooled by anxious marketing

The most annoying thing about the RWA circle is the anxiety marketing that is full of screens. What is "RWA is the future of blockchain", "If you miss RWA, you miss wealth", "Ordinary people can also turn over with RWA", it is really disgusting to hear too much. Brother, RWA is a serious financial track, playing the combination of asset securitization and blockchain technology. What does it have to do with the opportunity for ordinary people to make money?

Those who can truly make money from the RWA track are either professional financial institutions or players who understand asset operations. Ordinary retail investors? At most, you can buy some compliant RWA products and get a fixed income, which is no different from buying bonds. Those who advocate "RWA can make you rich overnight" are just trying to get you paid for their "courses" or "tokens". Don't be kidnapped by anxiety, RWA is not your life-saving straw.

Truth 9: Compliance and regulation are the soul of RWA, and an RWA

without compliance is a short check

The greatest value of RWA lies in compliance and regulation. Without these two things, what is the difference between RWA and Air Coin? Compliant RWA products must have clear underlying assets, transparent transaction structure, and must also be reviewed by financial regulators. The reason why Hong Kong's RWA is reliable is that it is strictly regulated by SFC (Hong Kong Securities Regulatory Commission) and the rights and interests of investors are protected.

In contrast, how many of the "RWA projects" in the mainland are truly compliant? Most of them don’t even have white papers. Where are the assets and how the returns come from, all depends on one mouth. You invested money and the project party ran away. Who are you asking for to cry? The soul of RWA is compliance and supervision. Without these two "RWA", it is an unguaranteed blank check.

Truth 10: RWA issuance costs are not low, and may be higher than

traditional financing

Last but not least, many people think that RWA is a "low-cost financing tool", but it is not the case at all. RWA issuance involves asset appraisal, legal due diligence, transaction structure design, blockchain development, and regulatory approval. Which step does not cost money? In summary, the issuance cost of RWA may be higher than that of traditional loans and equity financing.

Especially for small and medium-sized enterprises, if they want to issue RWA, they have to face high preliminary investments, such as lawyer fees, audit fees, and technology development fees. The cost of Hong Kong's RWA projects is often several million Hong Kong dollars, and mainland companies can afford it. So, don’t listen to the nonsense of “RWA is the savior of small and medium-sized enterprises”. The financing method depends on the company’s own situation. RWA is not a panacea.

Conclusion: Be awake, RWA is not your life-saving straw

Writing this article is not to deny the value of RWA - asset tokenization is indeed a future trend, and it makes asset securitization more efficient and transparent, which is indeed a direction for the integration of blockchain and finance. But the problem is: the current circle is too impetuous, too eager for quick success and instant benefits, and too treats leeks as fools. The air coins that cut leeks, the anxious marketing accounts that sell, and the midwife who ask for prices have made a serious financial track mess.

If ordinary people want to participate in RWA, they can buy at most compliant RWA products and get a stable profit. Don’t expect to get rich overnight. If a company wants to do RWA, find professional institutions and go through compliance procedures, don’t be cheated by “full case service providers”. RWA is not a myth, nor is it a casino. To recognize these 10 truths, don’t let your wallet become someone else’s leek land.

If you have finished reading this article, you have to jump into the RWA's fire pit - then please tell me the wallet key before jumping, and I'll keep it for you.