I. In-depth Analysis of the RWA Track: The Growth Engine of the Crypto Market in 2025
In the past few years, decentralized finance (DeFi) has risen rapidly, creating a financial ecosystem that can operate without the traditional banking system. However, a core issue facing the DeFi field is that the entire market's operation still heavily relies on crypto assets (such as BTC, ETH, and stablecoins), lacking sufficient real-world asset (RWA) support, which has always limited the development of DeFi to the volatility of the crypto market itself. The emergence of the RWA track is breaking this limitation, combining real-world financial assets with blockchain technology, which can not only enhance the stability of on-chain financial products but also bring a huge liquidity increment to the entire market. This track is becoming a key bridge for institutional investors and mainstream financial institutions to enter the crypto industry, and may even drive the entire blockchain industry into a new growth cycle.
The core concept of RWA is to digitize various assets (such as bonds, real estate, stocks, art, private equity, etc.) in the traditional financial market and convert them into tokenized assets that can be traded, pledged, or borrowed on the chain through blockchain technology. This process not only enhances the liquidity of the assets but also reduces the friction costs in the traditional financial market, such as long transaction settlement times, high intermediary costs, and limited liquidity. Taking the bond market as an example, traditional bond trading often involves multiple financial institutions and regulatory authorities, with cumbersome intermediate links, leading to high transaction costs, while RWA tokenization can achieve real-time on-chain settlement, greatly improving transaction efficiency and reducing transaction costs. At the same time, due to the transparency and traceability of blockchain, the management of RWA assets is more transparent, which can effectively reduce fraud and improper operations in the market.
As blockchain technology matures and market demand grows, the RWA track is attracting more and more institutional participation. For example, BlackRock, one of the world's largest asset management companies, recently launched a blockchain-based tokenized fund called BUIDL, which mainly holds stable assets such as US Treasuries and provides more efficient trading methods through blockchain. In addition, traditional financial giants such as Franklin Templeton are also actively trying to tokenize some of their fund products, allowing investors to participate in the market more conveniently. These cases show that the RWA track is no longer just a "crypto narrative", but is becoming a core trend in the digitalization of the global financial market.
From a technical perspective, the development of RWA relies on the support of several key infrastructures, including blockchain underlying networks, smart contracts, oracles, decentralized identities (DID), and compliance management. First, public chains as the carrier of RWA assets determine the security and operability of the assets. Currently, Ethereum is still the preferred network for RWA tokenization, and many institutions deploy smart contracts on Ethereum to manage RWA assets, while L2 solutions (such as Arbitrum and Optimism) are also becoming popular choices for RWA asset trading to reduce transaction costs and improve throughput. In addition, public chains such as Solana, Avalanche, and Polkadot are also exploring the application scenarios of RWA assets, striving to seize market share in this field.
In terms of market size, the potential of the RWA track is extremely huge. According to a study by the Boston Consulting Group (BCG), the market size of the RWA track is expected to reach $16 trillion by 2030, far exceeding the current total market capitalization of the entire crypto market. Currently, the global real estate market is worth about $300 trillion, but most real estate investments require high capital and have low liquidity. If 1% of the assets are tokenized, it can create a $3 trillion RWA market. Similarly, the global bond market is over $120 trillion, and if 1% enters the blockchain, it will form a new $1.2 trillion emerging market.
Institutional capital is accelerating into the RWA track, indicating that this track is no longer a purely "crypto experiment", but is becoming an important part of the global financial system, and this trend will continue and develop in 2025 as the Trump administration has shown unprecedented support for the crypto industry. For investors, the RWA track not only provides a new market opportunity, but may also become an important bridge for the integration of the crypto market and the traditional financial market. In the next few years, with the further improvement of infrastructure, the implementation of regulatory frameworks, and the further layout of mainstream financial institutions, the RWA track is expected to become a new growth engine for the blockchain industry, and may even drive the digitalization of the entire financial market.
Overall, the rise of the RWA track not only represents the maturity of blockchain technology and the expansion of application scenarios, but also means that the global financial market is entering a new stage of decentralization and efficiency. For market participants, how to seize the opportunities of RWA asset tokenization, layout infrastructure and key protocols, will become the core issue for the development of the crypto industry in the coming years.
II. Current Market Environment: Macroeconomic Factors and Catalysts for RWA Development
Against the backdrop of increasing global economic uncertainty, changing liquidity cycles, and the booming digital asset market, the RWA (Real-World Assets) track is becoming one of the most important growth points in the crypto industry. With the adjustment of the Federal Reserve's monetary policy, the persistent impact of inflationary pressure, the volatility of the debt market, and the increased participation of institutions in the crypto market, the development of RWA has ushered in unprecedented opportunities. At the same time, the shortcomings of the traditional financial system and the increasing maturity of DeFi (Decentralized Finance) are also driving the migration of real-world assets to the chain. This article will deeply explore the catalytic factors for the development of the RWA track from five aspects: the global macroeconomic situation, liquidity environment, policy and regulatory trends, institutional participation, and the maturity of the DeFi ecosystem.
2.1 Global Macroeconomic Situation: Changes in Inflation, Interest Rates, and Market Risk Aversion
The global macroeconomic environment is one of the core variables affecting the development of RWA. In recent years, the global economic growth has faced great uncertainty due to the weak economic recovery after the COVID-19 pandemic, the escalation of geopolitical conflicts, supply chain issues, and the adjustment of central bank policies. Among them, changes in inflation and interest rate policies directly affect the liquidity of funds and the asset allocation strategies of investors, and also indirectly drive the development of the RWA track.
Here is the English translation of the text, with the specified terms preserved: First, from the perspective of inflation, the Federal Reserve's aggressive interest rate hike policy over the past two years has had a profound impact on the global market. Since 2022, the Federal Reserve has raised interest rates multiple times in a row to curb high inflation, leading to a tightening of global liquidity. In a high-interest rate environment, investors' risk appetite has decreased, and traditional financial markets have been impacted, causing capital to flow more into low-risk, high-yield asset classes. This has prompted investors to start focusing on assets such as government bonds, gold, and real estate, and the tokenization of these assets has become an important growth point for the RWA track. For example, the tokenization of US Treasuries (such as the OUSG token provided by Ondo Finance) has become an important investment tool in the crypto market due to its relatively high annualized yield (over 5%), attracting a large amount of DeFi capital inflow. Secondly, as the global debt crisis has intensified, the RWA track has become an important option for capital to seek refuge. As of 2024, the total global debt has exceeded $300 trillion, with US debt exceeding $34 trillion, and the fiscal deficit reaching a historic high. In this situation, investors' confidence in the traditional financial market has been shaken, and they are seeking more transparent and efficient financial infrastructure, and the characteristics of blockchain technology, such as decentralization, borderlessness, and low cost, make the on-chain of RWA assets the best solution. Furthermore, in the high-inflation environment, the demand for gold and commodities has surged, and gold tokens (such as PAXG and XAUT) have also become popular assets in the crypto market. Overall, the increasing uncertainty in the global economy has increased investors' demand for safe-haven assets, and the innovation of the RWA track has enabled these assets to enter the crypto market more conveniently, thereby driving the explosive growth of this track. 2.2 Liquidity Environment: Federal Reserve Policy Shift and Changes in Market Risk Appetite The rapid development of the RWA track is inseparable from the changes in the global liquidity environment. In 2022-2023, the Federal Reserve implemented a significant interest rate hike, leading to a severe tightening of global market liquidity. However, since 2024, as inflationary pressures have eased, the Federal Reserve has entered the end of the interest rate hike cycle and may even begin a rate cut cycle, and the market's liquidity expectations have changed, which has provided a significant boost to the RWA track. First, the adjustment of the Federal Reserve's monetary policy has increased the market's demand for stable-yield assets. The DeFi ecosystem experienced a high-volatility and high-risk phase in 2021-2022, but currently, investors are more inclined to low-risk and predictable yield products, and the RWA track is providing this solution. For example, bond tokenization and private market tokenization allow investors to enjoy a more stable and compliant yield model within the DeFi ecosystem, which is also one of the important reasons for the RWA's explosion in 2024. Secondly, from the perspective of the crypto market, the approval of the BTC spot ETF in 2024 has led to a continuous inflow of institutional capital, expanding the overall liquidity pool of the crypto market, and these funds, in addition to BTC, also need to find more stable investment targets. RWA assets, due to their deep integration with the traditional financial market, have become an important allocation direction for institutional capital. For example, asset management giants like BlackRock and Fidelity have started to focus on the RWA field and launched related investment products, which will further drive the growth of the RWA track. In addition, as DeFi's yields have declined, the yield advantage of the RWA track has become more apparent. In 2021-2022, the yields in the DeFi ecosystem were generally over 10%, but in 2024, the yields of most DeFi protocols' stablecoins have dropped to between 2%-4%, while the yields of RWA assets such as US Treasuries are still maintained above 5%, making RWA assets a new DeFi yield pillar and attracting a large amount of capital inflow. 2.3 Policy and Regulatory Trends: The Compliance Process of the RWA Track In the development history of the crypto industry, regulatory issues have always been a focus of market attention, and the rise of the RWA track is precisely because it is more compliant compared to other DeFi tracks and can meet the needs of institutional investors. Regulatory authorities in various countries are gradually accepting the innovative model of asset tokenization and exploring how to support the development of the RWA ecosystem through legal frameworks. First, the US SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission) have conducted research on securities tokenization, bond tokenization, and other fields, and have allowed some institutions to issue tokenized assets within the compliance framework. For example, Securitize has already obtained SEC approval to issue blockchain-based security tokens, which provides a good example for the compliance of the RWA track. Secondly, Europe, Japan, Singapore, and other regions have a relatively open attitude towards the RWA track. For example, Switzerland's SIX Digital Exchange (SDX) and Germany's Boerse Stuttgart Digital Exchange (BSDEX) have already supported tokenized stock trading, and the Singapore government has also actively promoted the on-chain development of RWA assets. These policy benefits have made institutional investors more willing to enter the RWA track, providing a solid foundation for its development. 2.4 Institutional Participation and the Maturity of the DeFi Ecosystem In addition to macroeconomic and policy regulation, the entry of institutions and the maturity of the DeFi ecosystem are also important driving factors for the growth of the RWA track. Traditional institutions have started to focus on the integration of DeFi and TradFi (traditional finance), and many leading asset management companies, banks, and hedge funds have begun to research how to issue and trade RWA assets on the blockchain. At the same time, the DeFi ecosystem is gradually transitioning from "high volatility and high risk" to "stable returns and compliant development", and the RWA track is becoming the core beneficiary of this trend. More and more DeFi protocols (such as MakerDAO, Aave, and Maple Finance) are deeply integrating with RWA assets, making the growth of the RWA track more sustainable. In summary, the explosion of the RWA track is not only the result of market demand, but also the product of the joint action of global macroeconomic, policy regulation, liquidity environment, and the evolution of the DeFi ecosystem. Driven by these catalytic factors, the RWA track is expected to become one of the most important engines for the growth of the crypto market in 2024-2025.III. Main Categories and Core Project Analysis of the RWA Track
Against the backdrop of the maturing crypto market and the accelerated influx of institutional capital, the rise of the RWA track has become a major trend. The core goal of the RWA track is to tokenize and issue, trade, and manage traditional financial market assets such as bonds, real estate, commodities, and private equity on the blockchain, making them more liquid and accessible, and enabling integration with the DeFi ecosystem. This not only brings the convenience of decentralized finance to traditional assets, but also provides a more stable source of income for the DeFi ecosystem. The application scenarios of the RWA track are rich, and the on-chain representations of different types of real-world assets vary, which can usually be divided into the following major categories: bond RWA, commodity and bulk asset RWA, real estate RWA, equity and private market RWA, and infrastructure and supply chain RWA. In this section, we will explore the core logic of these categories in detail and analyze the representative projects in the current market to gain a deeper understanding of the RWA track layout.
3.1 Bond RWA: On-chain Bonds, Government Bonds, and Corporate Bonds
The bond market is one of the most important asset classes in the global financial market, especially US Treasuries (UST), which are considered one of the safest assets in the world and are widely used for hedging and reserve assets. With the maturity of the DeFi ecosystem, more and more institutions are trying to bring bond assets onto the blockchain, realizing the transparency of returns, the improvement of liquidity, and the possibility of global trading.
Currently, the global debt market has exceeded $300 trillion, with a high proportion of US debt, while the total market capitalization of the crypto market is only $2-3 trillion. If the tokenized bond assets in the RWA track can be successfully introduced into the DeFi ecosystem, it will greatly change the market landscape. The liquidity of the traditional bond market is limited by factors such as trading hours, market access thresholds, and settlement cycles, while on-chain bonds can provide advantages such as 24/7 trading, borderless access, and second-level settlement, making them an important supplement to the DeFi ecosystem.
Representative Project Analysis: Currently, the main participants in the bond tokenization field of the RWA track include Ondo Finance, Maple Finance, and Backed Finance.
Ondo Finance: It is currently one of the most active bond tokenization projects, focusing on US Treasury bond tokenization, providing OUSG (Ondo Short-Term US Government Bond Fund), which allows DeFi users to obtain yields similar to short-term US Treasury bond ETFs on-chain, with an annualized return rate of over 5%. Ondo's tokenized bonds are custodied by compliant institutions and comply with US securities laws, while also being freely tradable on-chain.
Maple Finance: Initially focused on the DeFi lending market, it later expanded to the RWA track, providing on-chain debt financing services. Maple allows institutional investors to issue bonds in the DeFi ecosystem, providing a stable source of income for the crypto market.
Backed Finance: It has launched various bond ETF tokenization products, such as $bIB01 (corresponding to the iShares short-term US Treasury ETF), providing investors with on-chain versions of mainstream bond ETFs in the traditional financial market, reducing the trading threshold and improving accessibility.
The rise of the bond RWA track not only meets the needs of traditional institutions, but also brings new sources of income to the DeFi ecosystem, further driving the growth of RWA assets.
3.2 Commodity and Bulk Asset RWA: On-chain Commodities such as Gold and Oil
The commodity market is another important RWA track, especially gold, which has long been used as a store of value and is one of the earliest assets to be tokenized on the blockchain. The tokenization of commodities allows investors to trade more conveniently and directly integrate with the DeFi ecosystem, improving the liquidity of the assets.
Gold has long been a tool for hedging against inflation, and the demand for gold has been rising continuously in the face of increasing global economic uncertainty. However, the trading costs of the traditional gold market are relatively high, and the delivery process is complex, while tokenized gold assets (such as PAXG and XAUT) can provide seamless cross-border trading, smart contract management, and DeFi pledging functions, making them an important asset class in the crypto market.
Representative Project Analysis:
PAXG (Paxos Gold): A gold token issued by Paxos, where 1 PAXG represents 1 ounce of physical gold stored in the London vaults, and can be redeemed for the physical gold at any time. PAXG is currently the on-chain gold token with the highest trading volume and is widely used for DeFi pledging and trading.
XAUT (Tether Gold): A gold token issued by Tether, also linked to physical gold, allowing users to trade seamlessly globally and participate in the DeFi ecosystem.
Commodities DAO: Exploring the possibility of on-chaining more commodities (such as oil, copper, soybeans, etc.) to make the bulk commodity market more transparent and efficient.
The tokenization of gold and other commodities is changing the trading methods of the commodity market, making it more open, and bringing stronger anti-inflation asset classes to the crypto market.
3.3 Real Estate RWA: A Breakthrough in Asset Liquidity
The real estate market is one of the largest real estate markets in the world, but due to problems such as high transaction costs and low liquidity, the traditional real estate market is difficult to integrate with the DeFi ecosystem. The real estate tokenization in the RWA track allows global investors to participate in the real estate market through the blockchain, breaking through geographical and capital barriers.
Representative Project Analysis:
RealT: Tokenizing US real estate assets, where each token represents partial ownership of the real estate asset, and investors can obtain rental income by holding the tokens.
LABS Group: Focusing on the Asian real estate tokenization market, allowing individual investors to participate in high-end real estate investment with extremely low thresholds.
The development of the real estate RWA track has significantly improved the liquidity of the real estate market, and also provided new pledge assets for DeFi, promoting the growth of the entire ecosystem.
3.4 Private Equity and Fund RWA: Making VC Investments More Transparent
Traditional VC investments and private equity fund markets have long had problems of high thresholds and low transparency, while the tokenization of RWA assets has made these assets more liquid. For example, the well-known asset management company Hamilton Lane has issued tokenized funds through the blockchain, allowing investors to participate in the private market with lower thresholds.
Here is the English translation of the text, with the specified terms preserved and not translated:Furthermore, platforms for compliant tokenization such as Securitize are helping more traditional institutions to put their equity assets on the blockchain, enabling them to be traded in the secondary market and improving liquidity.
IV. Challenges and Potential Breakthroughs in the RWA Sector
In the past few years, the RWA sector has gradually attracted the attention of the blockchain industry. RWA aims to digitize real-world assets such as real estate, bonds, stocks, and commodities, and integrate them into the blockchain ecosystem, allowing them to be traded, pledged, and borrowed on decentralized finance (DeFi) platforms. This sector has tremendous potential, but it also faces numerous challenges. Overcoming these challenges will be key to its continued development.
First, one of the most significant challenges is the issue of legal compliance. Traditional assets are usually subject to the legal and regulatory frameworks of various countries, and when these assets are digitized and introduced into the blockchain environment, they may face scrutiny from regulatory authorities and issues with policy adaptability. Many countries' current financial regulations do not explicitly address crypto-assets and blockchain technology, and the legal uncertainty is even greater when it comes to cross-border asset transfers. For example, how to legally transfer traditional assets such as real estate or bonds to the blockchain globally and ensure compliance in different jurisdictions requires the deep involvement of legal experts and may even necessitate revisions to the legal frameworks of the relevant countries. Furthermore, the management and transfer of ownership of digital assets may also pose complex regulatory challenges, involving the verification of the actual existence of the assets and the legitimacy of their owners.
In addition, technical challenges should not be overlooked. Although blockchain technology has obvious advantages in terms of data immutability and decentralization, how to effectively convert real-world assets into digital form is still a complex issue. This not only involves the tokenization of physical assets, but also ensuring that these tokens accurately reflect the value and liquidity of the assets. Currently, the digitization of assets often relies on traditional third-party intermediaries such as banks or legal institutions for assessment and endorsement, which creates a contradiction between the decentralized idea and the traditional centralized institutions. Furthermore, the custody and management of assets is also a major technical challenge. While blockchain can provide transparency and automation, ensuring the security and compliance of assets, especially in the absence of centralized intermediaries, is a problem that must be solved. Blockchain smart contracts can greatly simplify the asset transaction process, but if vulnerabilities or errors occur, it could lead to massive asset losses, so the security and auditing of smart contracts is crucial.
For innovators in the RWA sector, the key is to effectively combine the advantages of blockchain with the needs of the real world. Particularly in terms of asset liquidity, the decentralized nature of blockchain can make assets more liquid, but real-world assets often face a lack of liquidity. For example, high-value assets like real estate have long transaction cycles and a limited number of market participants. How to use blockchain to break through the liquidity bottleneck of traditional assets, allowing these assets to circulate globally and become liquid assets on DeFi platforms, is one of the potential breakthroughs in the RWA sector. By introducing asset tokenization, a real estate project, bond, or other asset can be divided into multiple smaller fractions, lowering the transaction threshold, attracting more investors, and increasing the asset's liquidity. Furthermore, asset tokenization can also improve market transparency, as investors can track the flow of assets through the public blockchain records, reducing the problem of information asymmetry.
In addition to the challenges of law and technology, market acceptance is also an important obstacle facing the RWA sector. Although blockchain has achieved remarkable success in the fields of cryptocurrencies and DeFi, for traditional investors, blockchain and digital assets are still relatively unfamiliar concepts. Especially for those investors who are accustomed to the traditional financial system and asset classes, digitized assets may not immediately gain their trust. To break down this barrier, the RWA sector needs to establish closer cooperation with traditional financial institutions. A potential breakthrough is that as more and more traditional financial institutions begin to accept blockchain technology and explore cooperation with crypto-assets, the RWA sector may also have the opportunity to gain support from the resources and credibility of these institutions. For example, banks and asset management companies can help promote the market acceptance of RWA by providing endorsements for digital assets or collaborating with blockchain platforms.
Another potential breakthrough for the RWA sector is multi-chain interoperability and liquidity innovation. Currently, many RWA projects rely on Ethereum or other mainstream blockchains, but the interoperability between different chains still poses a significant challenge. If RWA can achieve multi-chain interoperability, cross-chain asset transfers will become smoother, and the flow of asset value will be greatly enhanced. To achieve this, cross-chain protocols and bridging technologies will become important breakthroughs in the RWA sector. This not only can improve the liquidity of assets, but also expand the market share of RWA, attracting more investors and users.
V. Future Outlook and Investment Strategies for RWA
As blockchain technology continues to mature and develop, the RWA sector is undergoing a subtle transformation. The integration of traditional assets and the crypto world will not only be a supplement to digital assets, but may also reshape the global financial system. The future of RWA will bring huge market opportunities, but also complex challenges. To succeed in this field, investors need to have a deep understanding of the industry's development trends and design reasonable investment strategies.
The future outlook for RWA is full of potential, especially as the role of blockchain technology as a bridge between the traditional financial system becomes increasingly evident. As blockchain technology is gradually accepted by financial institutions, the tokenization of traditional assets will become more and more common. It is expected that in the next few years, asset tokenization will become mainstream, especially in areas such as real estate, bonds, equity, and commodities. The traditional financial market's openness to digital assets is increasing, and this trend will also accelerate the growth of RWA. Banks, insurance companies, and asset management companies are exploring how to use blockchain technology to automate and increase the transparency of asset management, while reducing operating costs and improving efficiency. Especially in capital-intensive industries, the market potential of RWA will be more significant, as digitized assets can cross geographical boundaries and provide global investors with unprecedented investment opportunities.
RWA's future outlook is closely related to the digitalization process of the entire financial system. As the financial market is increasingly transforming towards digitalization and automation, RWA will gradually become an important part of the global capital market. With the progress of technology and the maturity of the market, there may be more opportunities for industry integration and mergers in the future RWA track, and some leading RWA platforms and projects may become "unicorns" in the blockchain industry. In this process, investors not only can obtain direct asset returns, but also may participate in the "dividends" of blockchain financial innovation. Therefore, the investment opportunities in the RWA track will become more and more, and investors need to grasp the market dynamics in a timely manner and flexibly adjust their investment strategies in order to obtain the maximum return in this innovative market.
