RWAfi: New Opportunities in the Next k Billion Dollar Track

From a data perspective, the tokenization of real-world assets (RWA) is undoubtedly one of the most clear growth directions in the "Blockchain+" field in the next 10 years.

According to data platform statistics, the total market size of RWA has exceeded 15 billion USD. Some institutions predict that this number will double to 30 billion USD by 2025. More optimistic forecasts suggest that by the 2030s, the market value of tokenized assets could reach 10 trillion USD.

In other words, the potential growth space of the RWA-related market in the next 7 years could exceed 700 times. However, there is a core question hidden behind this: who can truly capture the incremental value of this enormous market?

This issue concerns the future hundred billion dollar opportunities of the entire RWA track. The answer may lie within the infrastructure surrounding the RWAfi public chain.

RWAfi: The Historic Opportunity of RWA

Moving real-world assets onto the blockchain is only the first step of tokenization and is far from unlocking its true potential. To further realize the release of on-chain value, a more efficient technical architecture, an open infrastructure toolkit, and a well-coordinated ecosystem are needed.

In short, the on-chainization of RWA requires not only technological breakthroughs but also a complete service framework surrounding the entire lifecycle of RWA assets. Especially, it is necessary to safely and easily introduce RWA assets into diversified on-chain DeFi scenarios, thoroughly transforming the existing dividends of traditional assets into on-chain incremental value.

This is the core value of RWAfi. Under the tokenization framework, RWA not only greatly enhances its own liquidity but also allows for obtaining DeFi yields through operations such as lending and staking, introducing real yield asset support to DeFi and strengthening the value foundation of the cryptocurrency market.

It has been jokingly said that every blockchain network has a unique "soul". Some focus on a specific segment of DeFi, some delve into the NFT and DAO ecosystems, and others are dedicated to incubating ZK applications, among others.

But when we focus on the RWA ecosystem, we find an interesting phenomenon: despite the popularity of RWA, there are very few public chains specifically serving the management and on-chain circulation of real-world assets. Even public chains like Ethereum and Avalanche, which have made significant inroads in the RWA direction, were not originally created to carry the trillions of dollars in real-world assets.

The reason is simple. The core mission of RWAfi is to enable the free flow of real-world assets on-chain. Therefore, compared to traditional on-chain applications like DeFi, it faces even greater challenges not only in addressing the complexities of traditional on-chain applications but also in how to make RWA truly "active" on-chain.

• On one hand, the process of "putting real-world asset rights on the chain" involves complex asset tokenization processes and multi-party collaboration. It requires addressing issues such as security compliance, liquidity, cross-chain interoperability, and a developer-friendly technical environment, in order to achieve efficient liquidity and transparency of on-chain assets.

• On the other hand, simply completing tokenization is not enough. After going "on-chain", there is also "empowerment", which means that the true value of RWA lies in how to build a transparent, efficient, and highly liquid on-chain financial market through blockchain technology. Therefore, it is necessary to achieve deep integration of DeFi protocols, yield distribution, and risk management in the future, endowing RWA with liquidity, composability, and interoperability similar to that of crypto assets.

Taking real estate as an example, after completing tokenization and going on-chain, it is no longer a "static" asset in the traditional sense and can participate in a variety of DeFi scenarios. For instance, achieving transparent distribution of rental income through smart contracts or using it as collateral for on-chain financing. This "empowerment" raises higher technical and ecological requirements, while also breaking the inherent limitations of RWA as real-world assets, injecting higher dimensional composability and application potential.

Therefore, RWAfi is not just a technical solution; it essentially creates a new asset class with native real yield properties - by introducing real-world assets, capital, and cash flows, it injects native "real yield properties" into the blockchain ecosystem.

In this context, although many blockchain networks have begun to explore the RWA field, most of them only scratch the surface, lacking comprehensive technical support and ecological layout throughout the entire chain. After all, the success of RWAfi lies not only in its completion of asset tokenization but also in its ability to provide a full set of solutions from development to operation.

Developers and users need a more accessible development resource environment, more efficient and scalable infrastructure, and a more secure and compliant underlying environment. Therefore, the core demand of the future hundreds of billions or even trillions of dollars RWA incremental market is evident - a dedicated RWA public chain.

It can simultaneously meet the diverse needs of institutional users and crypto-native users. In this vision, the RWAfi public chain is not just empowering RWA assets, but is more likely to become the core value capture of the RWA ecosystem's incremental value. By becoming a hub for liquidity and value settlement, all DeFi operations related to RWA tokenized assets (, such as farming and collateral interactions ), can aggregate value through the RWAfi public chain, further promoting the incremental expansion of the RWA sector.

In short, the L1 public chain dedicated to RWA is just a means, not an end - ultimately, the players who can truly capture the incremental value in the RWA sector are likely to be those solution providers that can cover the entire chain from on-chain infrastructure to ecosystem empowerment. They can enable the entire RWA process from "on-chain" to "empowerment" to operate smoothly and efficiently.

Therefore, from this perspective, the golden age of RWA dedicated chains has indeed arrived.

New Interpretation of One-Stop RWA Dedicated Chain

For RWAfi, there is also a natural advantage:

Regardless of which track or product ultimately emerges under the RWA narrative, as long as the overall market size continues to grow, the RWAfi public chain platform, which provides the most fundamental support in the form of infrastructure, can tap into future markets worth hundreds of billions or even trillions of dollars, capturing the incremental value behind it.

After all, RWA has gradually become the main driving force behind the incremental growth of on-chain digital assets, allowing Web3 to effectively reach the massive asset pools of traditional markets - such as the global bond market ( $133 trillion ) and the gold market ( $13.5 trillion ).

Since Compound ignited the DeFi summer in 2020, the volume of digital assets in the entire on-chain world has made significant progress. Even though it faces a substantial retracement compared to the $180 billion in November 2021, as of January 13, 2023, the on-chain TVL still amounts to $113.5 billion.

However, compared to the tokenizable RWA assets such as bonds, gold, stocks, and real estate worth tens of trillions of dollars, this scale still seems insignificant. Therefore, RWA tokenization will undoubtedly bring a new incremental momentum to the on-chain world, creating unprecedented incremental market space.

Currently, there are very few L1 public chains that are focused on RWAfi positioning. A certain project that has just completed a new round of financing of $20 million is almost the only strictly defined RWAfi public chain, which can also be considered a significant benchmark financing event in the RWAfi field so far.

One of the significant features of this project is its modular design. It systematically addresses the tokenization, compliance, liquidity, and interoperability issues of RWA through a one-stop solution, providing developers and institutions with a complete solution covering the entire lifecycle of RWA tokenization.

This systematic model is quite worthy of attention. After all, for a public chain, it is not important how "advanced" the technology is; the core competitiveness lies in whether it can attract developers and users to choose you and settle down. This is especially true for products like RWA, which involve a high level of complexity between on-chain and off-chain. If only fragmented services for a certain link are provided, developers and institutional users will not be willing to pay.

The advantage of this project lies in its integration of multiple modular key tools, providing developers with a complete RWA asset on-chain solution. This toolkit not only lowers the technical barriers but also incorporates compliance vendors directly into the platform's upstream supply chain system in a "compliance-as-a-service" model, ensuring that tokenized assets meet regulatory requirements from the very source.

Through these modular tools, the project not only empowers developers but also significantly lowers the threshold for traditional financial institutions to enter Web3 - developers can quickly deploy complex RWA solutions by lowering technical barriers with modular tools; the "compliance as a service" model can also help traditional institutions address compliance pain points while providing efficient technical support.

This means that Web2 giants looking to enter Web3 can directly embed RWA tokenization services provided by this project into their existing products through a one-stop RWA asset tokenization service, quickly achieving product iteration and market expansion.

This not only enables institutions to easily tokenize assets and introduce them into the blockchain ecosystem, but also retains the smooth user experience of Web2, empowering users with asset autonomy and Web3 attributes.

From a broader perspective, in the Web2 world where private traffic was king, whoever could lay claim to and gather enough private traffic would be able to maximize their profits. This has led to a situation in Web2 where there are fat applications and thin protocols, with super apps like WeChat, Alipay, and Meituan becoming increasingly large, locking users in through a closed ecosystem.

In Web3, the product logic has clearly reversed - products in the form of underlying components or middleware are becoming increasingly popular, allowing them to be inserted as "building blocks" or used as underlying infrastructure to achieve maximum aggregation benefits. The modular infrastructure of this project perfectly aligns with this Web3 product logic, providing traditional financial institutions and Web2 giants with lightweight RWA integration tools, enabling them to quickly realize Web3 transformation.

The appeal of this project lies here. For the RWAfi track, future competition will not only be a contest of technical capabilities, but rather whether it can create an efficient and user-friendly ecosystem support system centered around developers and users. This model of connecting on-chain innovation with off-chain assets will become the true watershed for the development of the RWA track.

The Only Way for RWAfi: The Bidirectional Link Between Institutions and the "Circle of Friends" in DeFi

For Web3, "incremental" is an eternal theme - whether it's the injection of incremental funds or the expansion of incremental users.

The core appeal of RWAfi lies in its inherent "bidirectional connectivity" attribute: on one hand, it connects new and old players in Web3, while on the other, it interfaces with the massive pool of traditional financial assets. This not only provides crypto-native users with new asset classes and yield opportunities but also paves the way for traditional financial giants to deeply integrate with the on-chain DeFi world, thereby achieving a "1+1>2" synergistic effect.

Taking this project as an example, it currently builds an "all-out effort" ecological network centered around institutional partners and extended by DeFi partners.

• Institutional partners: responsible for providing compliance, trust foundation, and high-quality assets, serving as the trusted core of its RWAfi ecosystem;
• DeFi Partners: Provides on-chain users with flexible and high-yield asset participation methods, further enhancing the liquidity and composability of RWA.

If you look closely, you will find that the project's institutional circle mainly focuses on the tokenization, compliance, and asset management of traditional assets, thereby increasing the liquidity and transparency of RWA through its on-chain infrastructure, paving the way for the deep integration of traditional financial giants and RWAfi.

The DeFi protocols that have achieved deep integration or collaboration with this project primarily convert the stock dividends of traditional assets into on-chain incremental value through this project, such as through liquidity support and yield.