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We are living in an era that few understand, yet it is rapidly taking shape: the financial system, computing system, and internet order are being rewritten silently. For the first time, humanity needs to answer three questions simultaneously, and the Web3 industry is precisely where these three lines will intersect for the first time in 2025.
For the past decade, the Web3 narrative has consistently revolved around infrastructure: scaling , cross-chain , ZooKeeper , Level 2 , modularity —technology has continuously advanced, but applications, regulation, and capital have never aligned simultaneously. This year, however, for the first time, all three have converged on the same timeline: in terms of regulation, the US has completed key legislation, and stablecoins and Bitcoin have officially entered the national strategic framework. Hong Kong has made significant regulatory strides in stablecoin legislation, detailed regulations for virtual asset services, and the structural pilot program for RWA; the interaction costs of mainstream public chains have dropped to below a few cents, and infrastructure performance bottlenecks no longer limit product innovation; capital has shifted from narrative-driven approaches back to real-world assets and real-world transactions.
This means that the Web3 industry has finally entered an era of structural implementation that it has never truly experienced in the past decade.
The blockchain no longer needs to prove that it can run; it needs to prove that it is worth using.
The article is divided into three main lines, which respectively discuss on-chain assets as assets, as markets, and as the development path of blockchain , as well as how they have formed deep intersections with global finance, technology and national governance systems.
The first part, "As Assets," begins with preventative interest rate cuts, US legislation, and stablecoin regulation, explaining how stablecoins, RWA, and DAT constitute a new value intermediary layer, yield anchoring layer, and fund management layer. Within this layer, USDC is being eroded by the white-label model, public blockchains are beginning to reclaim interest rate tax, and the on-chaining process of RWA and US stocks brings about a dual game of institutional and liquidity considerations. Meanwhile, on-chain payments are shifting from technology-driven to scenario-driven, exhibiting a development pattern that is regionally and path-specific. This stage is not only reflected in the adjustment of the US financial structure but is also validated in the institutional implementation in international financial centers such as Hong Kong.
Part Two, "As a Market," will discuss the evolution of market microstructure, leverage, and consumer applications. PrepDEX and prediction markets, as star projects, will explain why the blockchain market is not a "fictitious" financial tool, but rather a market machine that is being institutionalized, digitized, and automated. It will also answer a frequently overlooked question: why does increased market efficiency actually promote the maturity of the asset system?
Part Three, "Blockchain as a Technology," focuses on the underlying technology and new demands of the AI era. Blockchain is no longer marketed as "decentralization," but rather as the infrastructure for the machine economy and the native system of intelligent agents. New mechanisms such as A2A micropayments, distributed agents, and distributed training are enabling the internet to shift from "humans accessing the network" to "machines accessing the network."
This report doesn't attempt to answer the question of "whether the Web3 market will continue to grow," but rather a deeper one:
After the infrastructure era ends, where will the value of Web3 be redefined?
How will the boundaries of Web3 be reshaped within a larger, more complex, and more realistic system?
Author: K , Researcher at Web3Caff Research
Cover: Photo by Visax on Unsplash , Typography by Web3Caff Research
Word count: 43,500+ words in total
Acknowledgments: We thank DaSong, YueYue, and ShiSiJun for providing valuable industry information and insights during the interviews, which served as important references for this research.
Note: Due to length constraints, this research report is published in two parts. This is Part 1 (including the introduction and PART 1). The remaining sections (Part II, Part 3, and Future Outlook) will be completed in Part 2.
Table of contents
- Introduction: From Technological Race to Value Creation, the Major Shift in Blockchain in 2025
- PART 1, As an asset
- The winds begin in the smallest things: a new cycle in the pace of infrastructure construction.
- A Major Shift in US Regulation: From Enforcement Suppression to Institutional Protection
- The BITCOIN Act: Bitcoin to be included in the national strategic reserve system
- The GENIUS Act: Establishing a Permissioned Framework for Stablecoins
- The Clarity Act : Defining Clear Boundaries for Token Attributes
- Hong Kong's market has made significant progress: moving from the "institutional development phase" to the "structural realization phase."
- With stablecoin legislation in place, Hong Kong has officially entered the "rules are enforceable" phase.
- RWA has shifted from "policy encouragement" to "structural pilots," but the pace remains cautious.
- Detailed regulation of virtual asset services leads to a "structural stratification" of the market.
- Hong Kong, China in international comparisons: Not the fastest, but perhaps the most "durable".
- Value intermediary layer: Stablecoins
- The New Internationalism of On-Chain Dollars
- Medium as Information: Native Innovation of Information/Settlement Integration
- Distribution is Power: The "Revenue Recovery" Movement in the Era of White Labeling
- Return anchoring layer: RWA (Real-World Asset)
- Differences in asset structure: Equity vs. Revenue Rights vs. Certificates
- On-chain advantages of non-equity RWA: the main battleground for efficiency improvement
- US Stocks on the Blockchain: A Divergent Trajectory Between Reality and Potential
- Fund Management: DAT ( Digital Asset Treasury )
- Narrative Shift: From On-Chain Assets to Manageable Assets
- Market Landscape: The Rise and Capital Expansion Path of DAT
- Risk Structure: Premium Dependence and Cyclical Vulnerability
- Asset Stratification: Strategic Positioning of Bitcoin, Ethereum , and Solana
- Application Circulation Layer: Payment
- Web2 payment giants: Stripe and PayPal
- Native payment gateways: Alchemy Pay and CoinsPaid
- Region-Focused Emerging Payment Networks: AEON Protocol and Gnosis Pay
- Summary: 2025 marked the first year of industrialization and implementation of on-chain finance.
- Part II, as the market
- PrepDEX, led by Hyperliquid
- CEX trust collapse, technological maturity, and restructuring of trader preferences
- By people, for people: a return to public goods and trust mechanisms.
- The Trinity: Collaborative Logic of HyperCore, HyperEVM, and HyperBFT
- The Era of the "Builder Economy" in Builder Codes
- The era of USDH's "native stablecoin"
- Regulatory Boundaries and Institutional Tensions: Hyperliquid's Current Constraints and Future Challenges
- Prediction markets, led by Polymarket
- InfoFi: How does information become a commodity?
- Polymarket, a perfect combination of timing, location, and people.
- Using "prediction markets" as an information engine, the future of integrated evolution
- Compliance Boundaries and Risk Warnings: Institutional Controversies and Practical Constraints of Prediction Markets
- The arrival of the post-VC and post-narrative era
- The Post-VC Era: Bottom-Up Deals, Information, and Fundraising
- Post-Narrative Era: Real Economic Value Becomes a New Indicator
- PrepDEX, led by Hyperliquid
- Part 3, as blockchain
- A2A Basic Protocol: A cryptographic constitutional layer ensuring the trustworthiness of agent behavior.
- Payment, x402 protocol
- Identity, ERC -8004 Protocol
- DeAgent: An on-chain autonomous intelligent agent possessing asset rights and profit rights.
- From meme cultural assets to infrastructure: The evolution from ai16z to ElizaOS
- Virtuals Protocol: AI Agent Assetization and Collaborative Governance Network
- DeAI : An intelligent supply network driven by open computing and data collaboration
- Bittensor: The Era of AI Mining with Proof-of-Intelligence
- Sahara AI: A Full-Stack AI Economic System
- A2A Basic Protocol: A cryptographic constitutional layer ensuring the trustworthiness of agent behavior.
- Looking ahead: Opportunities and challenges beyond 2025
- Key Points Structure Diagram
- References
Introduction: From Technological Race to Value Creation, the Major Shift in Blockchain in 2025
In 2025, the entire industry finally crossed a watershed moment that no one could pretend not to see: from a decade dominated by infrastructure to a decade driven by applications. You can think of it as the end of Web3's adolescence—the days of rapid growth, rebellion, competing on computing power , TPS, cross-chain capabilities, and ZK are over; products that can truly motivate ordinary users to spend money, stay engaged, and participate are just beginning.
This shift is not rhetoric, but rather the first time that the underlying conditions have truly matured. a16z explained this clearly in "State of Crypto 2025": the processing power of mainstream chains has increased from "a few TPS" a few years ago to 3400+ TPS today, and the cost has dropped from twenty dollars to a few cents or even less than a penny. [1] In other words, chains are no longer a bottleneck, technology is no longer a hindrance to entrepreneurs, and it no longer keeps users out. In other words, the infrastructure of the public chain era is already perfect enough, and the real investment worthwhile in the next decade is in application implementation, public goods, open source tools, and structured financing.
One of the key factors supporting the industry's gradual entry into the application exploration phase is the relative clarity of the policy environment at a phased level. For example, as the United States and Hong Kong gradually develop clearer policy paths on key issues such as crypto-asset regulation, stablecoin frameworks, and compliant custody , institutions, developers, and infrastructure providers have begun to reassess the long-term feasibility of blockchain applications. This clarity does not stem from a single policy shift, but rather from a phased consensus reached on "innovation space under compliant conditions" through a series of institutional discussions, regulatory practices, and legislative processes. In this environment, capital allocation has begun to recover, and basic modules such as compliant stablecoins, payment systems, custody, and clearing are gradually becoming ready for large-scale implementation, providing fertile ground for richer application forms.
The author would like to specifically remind you that stablecoins are virtual currencies (Tokens), and please be aware that the issuance and participation in token investment are subject to varying degrees of regulatory requirements and restrictions in different countries and regions. In particular, issuing tokens in mainland China is suspected of constituting "illegal issuance of securities," and providing token trading matching and other cryptocurrency trading-related activities are also considered "illegal financial activities" (readers in mainland China are strongly advised to read " A Summary and Key Points of Laws and Regulations Related to Blockchain and Virtual Currencies in Mainland China "). Therefore, please do not make any decisions based on this information, and please strictly abide by the laws and regulations of your country or region, and do not participate in any illegal financial activities.
When the policy environment no longer constitutes an important source of uncertainty and the performance constraints of infrastructure continue to decline, changes within the industry also emerge, and then the real change occurs: revenue begins to shift from the network layer to the application layer. a16z marks this trend particularly clearly with the concept of "Real Economic Value"—the success of a chain is no longer measured by its ecosystem story, but by whether users are willing to engage in real economic activities on it. [1]
Against this backdrop, we finally see the full bloom of the three core applications of the Web3 industry in 2025 (Editor's note: Blockchain technology has extremely wide applications in multiple real-world fields. Its core is solving issues of trust, collaboration, and rights confirmation, mainly including: finance and payment (cross-border settlement, clearing and reconciliation), assets and property rights (real estate, equity, intellectual property rights confirmation and transfer), supply chain and manufacturing (traceability, anti-counterfeiting, process transparency), government and public services (electronic certificates, data sharing, voting), healthcare and education (credible storage of medical records and academic qualifications), content and cultural and creative industries (copyright registration, revenue sharing), and energy and the Internet of Things (device collaboration, carbon data, and energy trading). Therefore, this report aims only to analyze representative cases of the Web3 industry under market changes in 2025 and is not comprehensive.):
- First, as assets. Stablecoins, DAT, RWA, and on-chain payments—the "real asset layer"—are becoming the largest entry point for large-scale adoption. Stablecoins form the world's fastest USD clearing network, on-chain payments are being reinvented, and RWA introduces traditional yield rates to the blockchain, making the chain the layer for "distributing real yield."
- Second, as a market. Hyperliquid and Solana now account for 53% of total revenue-generating trading volume across the network, indicating that high-frequency trading, contracts, and prediction markets are becoming new economic engines. Price discovery markets are not a byproduct, but a core force driving liquidity, promoting infrastructure optimization, and fostering user culture.
- Third, as a computing and coordination network. Blockchain is finally starting to empower AI, instead of waiting for AI to empower Web3. From verifying computation, model ownership, and data traceability to decentralized inference networks, on-chain assets are taking shape as an "AI coordination layer." Previously, we discussed "what the blockchain can do"; now we are discussing "what AI can do on the blockchain."
This also explains why Jiawei Zhu of IOSG said: "The golden age of infrastructure is over, and we have undoubtedly entered the application era." [2] Peter Pan of 1kx also gave the same judgment: the application layer investment cycle in the past seven years was immature, but the next seven years will be completely different, because with the continuous improvement of technical capabilities and the gradual clarification of the regulatory environment, the external constraints on application innovation are being significantly reduced. [3]
Therefore, the key in 2025 is not "whether applications will come," but "applications finally have fertile ground to grow." The blockchain is fast enough, the fees are low enough, regulations have been relaxed, and user attention has returned. The past decade has been preparation for today; the next decade will be the era when various real business models truly run on the blockchain. Infrastructure will not disappear, but it will no longer be the center of the narrative; from now on, everything must return to the value of the product itself.
The era of Web3 applications is not coming soon, it has already begun.
The author would like to remind you that the following content is only an objective analysis of the special attributes and development patterns of the blockchain and Web3 industries, and does not constitute any proposal or offer. Please do not make any decisions based on this information, and please strictly abide by the laws and regulations of your country or region (readers in mainland China are strongly advised to read "A Summary of Key Laws and Regulations Related to Blockchain and Virtual Currency in Mainland China "), and do not participate in any financial activities prohibited by the laws of your country or region.
PART 1, As an asset
The winds begin in the smallest things: a new cycle in the pace of infrastructure construction.
In 2025, the global macroeconomic environment is at a delicate and crucial turning point. Since the pandemic, major economies have experienced unprecedented monetary easing. Driven by economic recovery, declining inflation, and a recalibration of policy expectations, the allocation logic of global liquidity is changing. This change is not a dramatic shift in direction, but rather a transition from an emergency response to normalized management.
The current liquidity environment is different from the extraordinary period of "unlimited quantitative easing + extremely low interest rates" in 2020, and also different from the wait-and-see stage before the policy turning point in 2019. Major economies, represented by the United States, have gradually entered the interest rate reduction channel after experiencing high inflation and interest rate hike cycles. For example, from the end of 2024 to the beginning of 2025, the Federal Reserve will maintain the policy interest rate at about 4.25% and release expectations of multiple adjustments within the year. [4] This means that macroeconomic financial conditions are shifting from a tight constraint to a more flexible range.
For the Web3 industry, this environment does not directly correspond to any short-term market fluctuations, but more importantly, it reshapes the external conditions for infrastructure construction.
First, the marginal decline in capital costs and the stabilization of expectations have made long-term technology investment and infrastructure construction plannerable again. In a period of high interest rates and high uncertainty, companies and development teams tend to compress cycles and postpone projects with heavy assets or long R&D paths; however, in the current environment of "moderate recovery but still constrained", engineering decisions are beginning to return to rationality, emphasizing sustainability, scalability, and matching with real needs.
Secondly, since this round of environmental adjustments is not a "crisis-driven easing," the development pace of infrastructure is more likely to exhibit a gradual characteristic. This means that Web3 underlying modules—including compliant stablecoins, payment tracks, custody and clearing systems, cross-chain functionality, and data availability —are more likely to be gradually refined in real-world use cases, rather than being rapidly stacked up under short-term capital impetus. While this pace slows down explosive expansion, it is conducive to the accumulation of architectural maturity and system stability.
Finally, with policies and macroeconomic expectations becoming clearer, infrastructure providers, developers, and application teams are beginning to reassess the boundaries of long-term investment. The construction of basic modules is no longer solely driven by speculative needs, but rather revolves around compliance, security, performance, and sustainable operation. This provides a realistic and solid foundation for more complex application models to follow.
Therefore, from an infrastructure perspective, 2025 is more like a year of readjustment of construction conditions. While liquidity hasn't driven a full-scale acceleration, it has provided the necessary buffer for Web3 systems to transition from experimental structures to sustainable engineering. In such a cycle, the industry's development path is more likely to be a process of "rational advancement" rather than a rapid leap driven by short-term sentiment.
A Major Shift in US Regulation: From Enforcement Suppression to Institutional Protection
Over the past three years, the United States has taken many actions, which have also had a significant impact on the global Web3 industry. Therefore, this article will use the United States as a reference for analysis. First, we know that in 2025, the "BITCOIN Act" and the "GENIUS Act" were passed, and the "CLARITY Act" was approved by the House of Representatives, which marked that the United States reached a consensus on key issues such as stablecoins, market structure, and digital asset regulation.
Of particular note is that after taking office, Trump explicitly expressed his support for the development of the blockchain industry and promoted the implementation of crypto-friendly policies. This political signal not only significantly boosted industry confidence but also provided a rare policy window for projects, investors, and developers. With the dual support of clear regulation and policy green lights, the entire industry has gradually established a sustainable "self-sustaining mechanism."
- The Bitcon Act: A presidential executive order, officially signed on March 5, 2025;
- The GENIUS Act: The legislative process has been completed and it was officially signed on July 18, 2025;
- The Clarity Act: It is completing the legislative process, has passed the House of Representatives, and is being submitted to the Senate for consideration.
The BITCOIN Act: Bitcoin to be included in the national strategic reserve system
On March 5, 2025, President Trump exercised his executive order authority to sign the BITCOIN Act, marking the first time the federal government had formally incorporated Bitcoin into the national strategic reserve system. The Act establishes a "Strategic Bitcoin Reserve," planning to purchase 200,000 Bitcoins annually for the next five years, totaling 1 million, while also including all Bitcoins confiscated or legally acquired by the government in the reserve. This reserve will be secured with high-level custody using geographically distributed cold wallets , establishing a transparent on-chain proof-of-reserve mechanism, and will be jointly supervised and managed by a third-party auditor and the Government Accountability Office.
To ensure long-term stability, the bill stipulates that all government holdings of Bitcoin must be held for at least 20 years, during which time the sale, exchange, or disposal is prohibited, and the use of legitimate crypto assets of individuals or enterprises is explicitly prohibited. In addition, the bill allows state governments to voluntarily entrust their state's digital assets to the national reserve for secure custody through independent accounts while retaining full ownership. This system design strengthens federal digital asset governance and provides an asset custody solution under a decentralized architecture. [5]
The enactment of this bill is significant: it not only marks the first time the United States has legally recognized Bitcoin's "strategic reserve status," but also sends a clear signal that Bitcoin is transitioning from a highly volatile asset to a national-level financial asset. Simultaneously, by introducing public auditing, decentralized reserves, and long-term holding mechanisms, the United States is attempting to build a "gold standard for the digital age," strengthening the credibility of the US dollar and enhancing its dominance in the global crypto-financial order. This bill may well become the institutional starting point for a race among other countries to allocate Bitcoin.
The GENIUS Act: Establishing a Permissioned Framework for Stablecoins
The bill, introduced by the U.S. Congress, has passed all legislative processes and was signed into law on July 18, 2025. It aims to establish a federal regulatory framework for payment-based stablecoins (digital assets pegged to fiat currency and promising redemption at a fixed value). The bill stipulates that only licensed issuers can issue stablecoins to U.S. users, primarily including three types of institutions: subsidiaries of federally insured banks, non-bank issuers meeting federal requirements, or stablecoin issuers complying with state laws. If state regulation is chosen, the issuance size cannot exceed $10 billion. All legitimate issuers must be subject to regulation by the relevant federal or state financial regulatory agency.
Regarding compliance requirements, issuers must hold US dollars or highly liquid assets as stablecoin reserves at a 1:1 ratio and publicly disclose reserve details and redemption policies monthly. In addition, the bill clearly regulates the restrictions on the use of reserve assets, compliance requirements for custody services, and the audit and enforcement powers of federal agencies over issuers. For foreign stablecoin issuers, if they wish to enter the US market, the Treasury Department must determine that they are subject to "equivalent regulation" and meet information disclosure obligations. [6]
The significance of this bill lies in its provision of a clear and legal pathway for stablecoins, a crucial blockchain infrastructure asset, eliminating legal uncertainty regarding their classification as securities while simultaneously ensuring user fund security and system stability. By establishing a compliance licensing mechanism and transparent regulatory standards, the US government is integrating stablecoins into the core of the financial system, potentially encouraging commercial banks, payment companies, and even card organizations to enter the on-chain settlement field.
The Clarity Act: Defining Clear Boundaries for Token Attributes
The CLARITY Act, introduced by the U.S. House of Representatives on May 29, 2025, is currently being reviewed by senators. It aims to establish a regulatory framework specifically for "digital commodities," defining them as digital assets that derive their value from blockchain technology. According to the bill, these assets would primarily be regulated by the Commodity Futures Trading Commission (CFTC), covering market participants such as digital commodity trading platforms, brokers, and market makers. Any digital commodity wishing to be listed on a compliant trading platform must operate on a "mature blockchain," or its issuer must submit regular disclosure reports.
The bill provides a pathway for digital goods on “mature blockchains” to be exempt from SEC securities registration, provided that their annual sales volume is below a set threshold and that they meet relevant disclosure obligations. The SEC retains regulatory authority over certain specific scenarios, such as broker-dealer trading on securities trading platforms or ATSs. In addition, all digital goods platforms and related intermediaries must comply with the Bank Secrecy Act (BSA) and assume compliance responsibilities such as anti-money laundering and customer identification. The bill also establishes a provisional registration mechanism to manage existing platforms and assets before formal regulations take effect. [7]
The enactment of this bill represents a significant institutional breakthrough for the blockchain industry. For the first time at the federal level, it clearly delineates the regulatory boundaries between the commodity and security attributes of digital assets, and provides a clear compliance exemption path for projects with a high degree of decentralization, effectively reducing legal uncertainty and compliance costs for entrepreneurs. Simultaneously, it establishes a unified market framework for trading platforms, ATS (Automatic Trading System), and custodian institutions, accelerating the construction of the compliance foundation for institutional entry and signifying that on-chain assets are gradually being incorporated into the regulatory framework of the mainstream US financial system.
The enactment of these three bills indicates that the United States is transforming into a major rule-maker in the global crypto market. This shift profoundly impacts the evolution of the US dollar and the US's global strategic position. At a time when the traditional dollar faces the challenge of de-dollarization, the US is choosing to proactively incorporate crypto assets into its national asset structure, supplementing its strategic reserves of "digital gold" with Bitcoin, extending the on-chain clearing power of the "digital dollar" with stablecoins, and consolidating its global capital pricing power through regulatory frameworks.
For the global blockchain industry, this signifies a fundamental shift. First, with a clearer regulatory path in the US, significant capital, entrepreneurs, and infrastructure development efforts will flow back to the US market to conduct on-chain financial business in compliance with regulations. Second, the compliant US dollar will become the settlement standard for the global on-chain economy. Third, projects will be systematically divided: one group will move towards full decentralization to obtain regulatory exemptions, while the other must accept a securities compliance path or be excluded from the US market.
More importantly, the Bitcoin Act may trigger a global race to establish its own strategic Bitcoin reserves. Following the example set by the United States in institutionalizing BTC reserves, countries such as Argentina, Russia, and the UAE may follow suit, sparking a new wave of digital asset reserves anchored to Bitcoin. This could be the starting point for a new financial system, indicating the emergence of a prototype of a "crypto version of the Bretton Woods system."
In summary, the United States, through the aforementioned three laws, has completed its national strategic absorption of Bitcoin, achieved global regulatory unification for stablecoins, and clearly defined the compliance path for crypto assets. In 2025, the US is attempting to rebuild the institutional foundation of its global hegemony in the digital finance era by constructing on-chain asset structures. For the entire industry, behind this policy green light lies a paradigm shift driven by geopolitical power, financial order, and technological narratives.
Hong Kong's market has made significant progress: moving from the "institutional development phase" to the "structural realization phase."
If the core narrative of Hong Kong's Web3 industry in 2023–2024 remained "returning to the table," then in 2025, the market's focus has clearly shifted to institutional implementation and structural differentiation. Hong Kong is no longer primarily relying on roadmaps or future promises to attract participants, but rather is beginning to substantively screen market players who can adapt to its financial system in the long term through a series of enforceable institutional arrangements. In this process, the evolutionary logic of Hong Kong's Web3 market has gradually shifted from "whether to open up" to "how to stay," and the core variables of market competition have changed accordingly. Around this shift, Web3Caff Research has continuously tracked the evolution of Hong Kong's Web3 policies and market structure over the past two years, and has formed a series of interim research conclusions.
With stablecoin legislation in place, Hong Kong has officially entered the "rules are enforceable" phase.
In 2025, the Stablecoin Bill was formally passed and entered the implementation preparation stage, marking Hong Kong as one of the few financial centers globally with comprehensive legislation on fiat-denominated stablecoins. Unlike earlier regulatory statements or regulatory sandboxes , the core significance of this legislation lies not in "whether to support stablecoins," but in clarifying the legal attributes of stablecoins as financial infrastructure. Web3Caff Research has previously provided a systematic analysis of the institutional details of this legislative framework, international comparisons, and its impact on the global stablecoin compliance path (see " Market Trends Insight: Hong Kong's Passage of the Stablecoin Bill and Its Impact on Global Stablecoin Compliance and the RMB Internationalization Strategy ").
From a regulatory perspective, Hong Kong's stablecoin regulations emphasize three points: first, the high certainty and auditability of reserve assets; second, the capital threshold and continuous compliance capabilities of issuing entities; and third, use cases and risk isolation mechanisms. This ensures that stablecoins are no longer considered fringe financial innovations, but are incorporated into a regulatory framework at the same level as payments, clearing, and custody.
The direct result of this change is that the stablecoin market has begun to see a "compliance premium" and a "barrier-to-entry elimination." Some projects that previously relied on regulatory ambiguity for survival have been forced to exit, while participants with backgrounds in banking, payment, or large financial institutions have begun to accelerate their deployments. As a result, the Hong Kong stablecoin ecosystem has shifted from "concept competition" to "institutional endurance competition."
RWA has shifted from "policy encouragement" to "structural pilots," but the pace remains cautious.
Hong Kong's progress in RWA ( Real-World Asset Tokenization) in 2025 exhibited a typical "financial center-style restraint." While the government and regulatory bodies explicitly supported asset tokenization, they did not immediately launch large-scale commercial applications. Instead, they piloted the technology using controllable assets such as government green bonds, fund units, and certain structured notes. Web3Caff Research has already conducted a comprehensive analysis of RWA's asset structure, legal encapsulation methods, and liquidation paths in different jurisdictions in a previous lengthy study (see " RWA Track 25 Q4 Research Report "). This article builds upon that analysis, focusing on discussing its feasibility boundaries within Hong Kong's institutional framework.
The core of this strategy is not conservatism, but rather an emphasis on the synchronicity of assets, legal matters, and liquidation. Hong Kong's RWA implementation path clearly differs from the "first on-chain, then compliance" model of some emerging markets, instead prioritizing asset ownership, investor protection, and liquidation mechanisms. This also means that RWA's expansion speed will be limited in the short term, but once it is successfully implemented, its institutional credibility will be significantly higher than that of most competing regions.
Market feedback indicates a shift in the participants within Hong Kong's RWA ecosystem in 2025: narrative-driven Web3 projects have significantly decreased, replaced by traditional financial institutions, custodians, accounting firms, and infrastructure providers. This suggests that RWA's role in Hong Kong is not merely as a traffic portal, but rather as an institutional testing ground for next-generation financial asset organization.
Detailed regulation of virtual asset services leads to a "structural stratification" of the market.
With the gradual refinement of guidelines for staking services, custody requirements, and investor protection rules, the Hong Kong on-chain asset market saw a clear stratification in 2025. On the one hand, compliant trading platforms, licensed institutions, and institutional service providers gained clearer development space; on the other hand, the operating costs of small and medium-sized platforms increased significantly, and industry concentration began to rise. Web3Caff Research has already conducted a dedicated analysis on the impact of the refined regulations on staking services on market structure and the boundaries of institutional participation in its interpretation of relevant policies (see " Market Trend Insights: Hong Kong SFC Issues Guidelines on 'Staking Services' ").
This change does not simply mean "tightening," but rather a shift in market structure from unchecked expansion to professional specialization. Functions such as trading, custody, staking, market making, and asset management are being broken down into different compliance modules, and institutions are beginning to choose their positioning based on their own strengths, rather than pursuing a "full-stack" platform model.
It is worth noting that the refinement of regulations also provides Hong Kong with a differentiated advantage: compared to simply relying on relaxed policies to attract projects, Hong Kong is creating a market environment that is "high-cost but highly credible." This environment may not be conducive to quantitative expansion in the short term, but it helps attract long-term capital and cross-border institutions.
Hong Kong, China in international comparisons: Not the fastest, but perhaps the most "durable".
From a global perspective, Hong Kong in 2025 is not the most aggressive region in Web3 policy. Singapore still holds an advantage in regulatory efficiency, the United States is accelerating its legislative process, and Europe is establishing unified rules through MiCA. However, Hong Kong's unique value lies in its triple attributes: a common law system, an international financial network, and an interface to the Chinese market. Web3Caff Research has been continuously tracking the systematic comparison of Web3 policy paths in major global jurisdictions in several studies (see " Market Trends Insight: The Escalating Global Web3 Policy Game ").
This combination makes Hong Kong more suitable to assume the role of "institutional intermediary": neither a fully decentralized testing ground nor a pure extension of traditional finance, but a transitional node for integrating blockchain technology into a mature financial order. From stablecoins to RWA, from custody to clearing, Hong Kong is validating whether Web3 can operate long-term within a high-standard financial system.
Overall, 2025 will be the year that Hong Kong's Web3 market completes its transition from policy commitment to institutional reality. After that year, Hong Kong will no longer be suitable for projects relying on conceptual financing or regulatory arbitrage , but its institutional value will begin to emerge for participants who genuinely wish to have a long-term presence in the global financial system.
Value intermediary layer: Stablecoins
The New Internationalism of On-Chain Dollars
Stablecoins play a key ecological role as the “fiat currency interface” and are the value intermediary layer in the entire crypto finance. On the one hand, they are the settlement unit for on-chain liquidity and transactions, providing users with value anchoring and low volatility, and becoming the mainstream pricing tool for DeFi , CEX, and payment scenarios; on the other hand, they are the bridge connecting on-chain finance to the real financial system, providing basic assets for applications such as RWA, lending, and yield aggregation. In this process, some international financial centers (such as Hong Kong, China) have begun to assume the role of institutional translation and compliance, enabling stablecoins to be “legally accessed” in different legal jurisdictions. To understand the strategic position of stablecoins in the macroeconomy, you can read the “ 25-Year Latest 20,000-Word Research Report on the Stablecoin Track ” published by Web3Caff Research in August of this year. [8]
Following on from the previous chapter, the US government's new crypto-friendly policies have laid the foundation for the industry's development. By 2025, the US and stablecoins will have established an unprecedentedly deep and intertwined relationship, no longer merely a game between regulators and the industry, but an on-chain extension structure where policy, capital, and technology work together to reshape the dollar's hegemony. Meanwhile, markets with mature financial regulatory systems, such as Hong Kong, are also beginning to become important new institutional interfaces.
First, at the policy level, with the advancement of the GENIUS Act , the United States officially established a federal compliance framework for stablecoins, clarifying core regulatory rules such as the qualifications of stablecoin issuers, reserve requirements, and auditing mechanisms. Following this policy green light, the US government, Wall Street capital, and payment giants quickly formed a "new financial mafia" in the stablecoin sector: Circle announced its IPO with a valuation exceeding $10 billion; Stripe acquired the stablecoin infrastructure Bridge ; giants like Robinhood and Stripe began building their own stablecoin systems and even issuing blockchains; BlackRock launched BTC and ETH ETFs , with assets under management exceeding $175 billion, steadily expanding its control over digital asset systems. Furthermore, markets like Hong Kong, through local legislation and regulatory frameworks, have also enabled their stablecoin competition landscape to achieve enforceable compliance within the international financial network.
Secondly, in terms of strategic function, stablecoins are becoming a new fulcrum for the US dollar on the blockchain. As a16z pointed out in "State of Crypto 2025", stablecoins currently hold more than $150 billion in US Treasury bonds, making them the 17th largest holder of US Treasury bonds, which strengthens the on-chain extension of the US dollar. [1] It plays a "dual role" globally: on the one hand, it is a global store of value tool, and US dollar stablecoins such as USDC/USDT have become the default pricing unit and payment intermediary for on-chain transactions in most countries around the world; on the other hand, they are also important buyers of US Treasury bonds, and through on-chain re-staking , RWA financing and other mechanisms, they continuously bring US dollar liquidity back to the US financial system, which stabilizes the US fiscal power of seigniorage and debt cycle. As an international financial center, Hong Kong, China, is simultaneously advancing the regulation of stablecoins and RWA, and in the future, it will also become an important institutional entry point for stablecoins in the global competition through high-standard regulation.
Finally, the issuance, distribution, and yield structure of stablecoins become key nodes for on-chain geopolitical financial control. Whoever controls the distribution channels of on-chain stablecoins holds the programming authority over the on-chain monetary order. From Circle and Paxos to PayPal, Stripe, and Robinhood, this struggle for "stablecoin autonomy" is, in reality, a fundamental game of the new hegemonic structure in the era of the digital dollar.
Medium as Message: Native Innovation of Information/Settlement Integration
Stablecoins are reconstructing the essential logic of money, pushing us from a "bank-centric settlement network" to a "financial internet based on cryptographic primitives ". Jesse Walden of Variant Fund once pointed out that the biggest innovation of stablecoins is not that they are pegged to fiat currency, but that they are a protocol carrier that integrates information and settlement: on-chain transactions are settlements themselves, and state changes are value transfers. Compared with the traditional system where messages (SWIFT) and settlements (ACH, credit card clearing) are disconnected, stablecoins have completed the integration of medium as settlement and settlement as value. [9] As McLuhan said, "the medium is the message". The emergence of stablecoins as a medium has not only compressed the time and space distance in financial activities, but also redefined who can be the publisher, clearer and liquidity provider of finance. This change has also provided new institutional interface opportunities for some international financial centers (such as Hong Kong, China).
In its first phase, stablecoins disintermediated traditional settlement systems. Compared to the cumbersome structure of cross-border payments that relies on clearing banks and exchange rate channels, stablecoins naturally possess on-chain composability and global reachability, bypassing the SWIFT network and credit card clearing and points systems, allowing value to flow instantly between wallets .
In the second stage, it has become a programmed currency tool for enterprises and even countries. Companies like Circle, Stripe, Visa, and Mastercard are building native stablecoin account systems; CEX/FinTech platforms such as Robinhood and PayPal are beginning to explore self-built chains and branded coins, pushing stablecoins towards a stage where applications and brands are both forms of currency.
In her article “From Interface to Network”, Primitive Crypto’s Yetta Sing proposed that stablecoins will become the “next-generation liquidity layer” in the crypto financial stack . This is not only an improvement in clearing efficiency, but also a systemic architectural reconstruction. Visa, Mastercard, Ripple, and Stripe are actively deploying stablecoin infrastructure, building full-stack stablecoin channels from user payments to enterprise settlements, from C2B to B2B. The underlying driver of this evolution is that the role of stablecoins as network interfaces is gradually being upgraded to a financial distribution channel. [10]
Distribution is Power: The "Revenue Recovery" Movement in the Era of White Labeling
In 2025, the power structure of stablecoins is undergoing a fundamental restructuring. Taking the United States as an example, with the passage of the GENIUS Act, stablecoin issuance is no longer limited to a few trusted financial institutions but has been formally incorporated into the "federal licensing framework," marking the beginning of the era of white-label stablecoins (as-a-Service) in the US. This change not only affects the US but also poses new requirements for institutional adaptation in international financial centers. In other words, any licensed bank, payment company, or even technology company can issue its own stablecoin products through compliant channels, similar to enterprise SaaS services. This regulatory shift fundamentally changes the competitive landscape of the stablecoin industry—from "who can issue tokens" to "who owns the distribution and user channels."
Over the past decade, the moat of the stablecoin industry has been mainly in the hands of the issuers. According to Delphi Digital, Tether and Circle, for example, monopolized about 85% of the market share (totaling $265 billion). However, the issuers’ business model has obvious structural flaws. Although Circle is the issuer of USDC, it must share more than half of its reserve interest income with its distribution partner Coinbase. In 2024, Coinbase earned $908 million from this, accounting for 53% of Circle’s total interest income. [11] This means that the real profit center in the stablecoin ecosystem has shifted from “issuing tokens” to “user retention and distribution channels”—Coinbase controls users, custody assets and distributes income, while Circle only plays the role of infrastructure for token minting .
With relaxed policies and clearer regulations, more traditional financial and technology companies are joining the stablecoin issuance race. The GENIUS Act provides a unified standard: requiring 1:1 reserves, transparent audits, and prohibiting re-staking to ensure that each stablecoin has the same credit rating as the US dollar. Hong Kong's emphasis on reserves, audits, and risk isolation in stablecoin regulation makes it a crucial compliance node for white-label stablecoins to go international. This not only lowers the compliance threshold but also creates a fertile market for white-label stablecoins. Companies no longer need to build their own reserve and clearing systems; they can simply use the "Stablecoin-as-a-Service" infrastructure to issue branded stablecoins for settlement and points systems within their own ecosystems.
This trend has directly weakened USDC's dominant position. Coinbase and Circle previously jointly controlled USDC's circulation and returns through the Centre Alliance, but with the rise of the white-label model, the competitive landscape has rapidly become multipolar. DeFi applications, L2 networks, and public chains have all taken action, exemplified by Hyperliquid's USDH stablecoin bidding—Hyperliquid refused to continue providing free reserve returns to Circle, instead opting for a white-label solution provided by Native Markets (a stablecoin model where third-party compliant issuance, application or public chain-led distribution and return allocation), returning 50% of the interest revenue to the ecosystem fund. This move not only brought direct cash flow to the platform but also symbolized that "chains and applications are beginning to wrest financial dominance back from issuers."
The success of this model is triggering a profound transformation of the on-chain financial system. Stablecoin yields (i.e., "on-chain interest tax") are becoming a core source of value that has been reclaimed. In the past, the more than $30 billion in stablecoin reserves on public chains such as Solana, Arbitrum, and BSC generated approximately $1.1 billion in interest income annually for Circle and Tether, with almost all of these yields flowing to off-chain financial institutions. Now, with the widespread adoption of white-label solutions, these public chains are attempting to internalize interest income for ecosystem development and incentive programs. MegaETH launched the USDm stablecoin to support Sequencer operations; Jupiter launched JupUSD, integrating stablecoin yields into lending, perpetual, and DEX modules to form a closed-loop growth engine. From a macro perspective, the evolution of the stablecoin industry has shifted from "centralized issuance monopoly" to "ecosystem-level stablecoin autonomy."
Return anchoring layer: RWA (Real-World Asset)
Differences in asset structure: Equity vs. Revenue Rights vs. Certificates
In the development trend of on-chain finance, "Real-World Assets (RWA) on-chain" is gradually becoming an important bridge connecting on-chain finance with the real economy. However, RWA is not a single asset class, but rather encompasses a variety of highly heterogeneous asset forms. From private lending, bonds, and real estate to carbon credits and stocks, they differ fundamentally in terms of legal structure, off-chain dependence, and DeFi integration methods, and cannot be generalized.
It is particularly important to note that the on-chain implementation path for equity assets differs fundamentally from other RWAs. For example, US stocks, as a representative equity asset, face greater regulatory sensitivity and governance closure during on-chain implementation. Mechanisms such as equity voting, shareholder rights, dividends, and tax reporting are deeply embedded in US SEC regulations and corporate governance systems, making it difficult to fully implement them through a single on-chain token. In contrast, bonds (especially short-term notes) possess clear and stable cash flow structures, real estate emphasizes title confirmation and registration systems, and carbon credits prioritize auditability and composability—they are more naturally suited to on-chain certificates, DeFi collateral, and portfolio finance structures, possessing protocol-level utility.
The difference in off-chain dependencies is also a key factor. US stock tokens often require complex systems such as brokerage accounts, clearinghouses, and custody to complete the mapping, and on-chain transactions are still essentially limited by the infrastructure of traditional finance. Other RWA assets, on the other hand, are easier to interface as off-chain API services or on-chain verification mechanisms, enabling lightweight and automated issuance and tracking processes.
In the DeFi landscape, this divergence is even more pronounced. On-chain stock trading typically limits its use to closed scenarios or synthetic transactions, making it difficult to embed in open DeFi protocols. Meanwhile, stable cash flow assets such as bonds, private loans, and real estate debt are becoming the primary underlying assets for on-chain lending, staking, and yield aggregation, forming a new layer of liquidity foundation for structured DeFi returns.
From a policy and international financial perspective, tokenizing stocks is prone to touching the red lines of capital account opening and securities ownership, and is more of a symbolic attempt. On the other hand, RWAs of the bond, carbon credit, and accounts receivable types are more often used as neutral instruments for "on-chain financial infrastructure going global", providing financing structures and compliance interfaces.
In conclusion, to build a genuine, efficient, and compliant RWA financial system, it is essential to distinguish the structural differences among these assets. All "off-chain assets" cannot be equated with the same on-chain mapping path. Instead, their respective legal attributes, liquidity structures, off-chain coupling levels, and DeFi compatibility should be modeled and analyzed in detail. This is not only a respect for reality but also an inevitable path for the evolution of on-chain financial institutions.
On-chain advantages of non-equity RWA: the main battleground for efficiency improvement
As of November 2025, according to data from RWA.xyz, the total size of the on-chain RWA market has reached $35.8 billion, nearly three times that of the beginning of the year, reflecting the rapid expansion of the field in a short period of time. Among them, private credit accounts for 52% of the market share, ranking first, followed by US Treasury bonds (24%), then institutional alternative funds (8%) and commodities (8%). In contrast, stocks account for only 2%, remaining on the periphery. [12] This set of data reveals a key trend: the core value of on-chain RWA is not simply "moving existing financial assets", but "improving the operational efficiency of assets that are illiquid and lack transparency in the traditional financial system". For the specific background here, please read the " 25-Year Q4 Latest 25,000-Word Research Report on the RWA Track " published by Web3Caff Research in June of this year. [13]
Traditional private lending markets have long faced problems such as poor liquidity, opaque credit information, and limited financing channels, making it difficult for SMEs and marginal financial needs to access capital. Blockchain technology, by introducing on-chain liquidity pools, contract execution, and cross-border stablecoin payments, effectively reduces intermediary costs and improves capital utilization efficiency, thereby bringing "protocol-level leverage" to private credit. This makes it the first in RWA to achieve product-market fit (PMF). For example, US Treasury bonds are already highly liquid, secure, and standardized assets globally. Their on-chaining is more for the stable collateral needs in DeFi scenarios (such as USDe and s DAI ) rather than solving structural financing pain points. Therefore, while they occupy a significant share, they are not the fastest growing or most disruptive segment.
As the RWA track heats up rapidly, how to optimize its custody, circulation and combination efficiency from the infrastructure layer of the chain has gradually become the focus of the industry. According to the " 20,000-word research report on the RWA dedicated chain track " released by Web3Caff Research in August 2025, the infrastructure for RWA needs to achieve systematic optimization in eight dimensions: 1) compliance and convenience of fiat currency funding channels; 2) secure and efficient cross-chain interoperability; 3) high throughput and instant finality; 4) innovation of Web3 user experience; 5) regulated privacy protection mechanism; 6) DeFi ecosystem compatibility; 7) simplified institutional-level asset on-chain issuance process; 8) moderately centralized governance architecture. [14] It can be seen from this list that the on-chainization of RWA is essentially a "tool efficiency problem" rather than an "asset definition problem" - its challenge is not whether the asset is real, but how the asset can be efficiently, securely and cost-effectively transferred and combined on the chain.
Currently, although most RWA projects are still deployed on the Ethereum mainnet or EVM- compatible chains, dedicated chains tailored for RWA (whether self-built L1 or dedicated L2 Rollups based on Ethereum) are rapidly emerging. [15] For example, Plume Network is defined as a "full-stack L1 dedicated to RWA". More information about this case can be found in the 10,000-word research report on the RWA L1 public chain Plume Network published by Web3Caff Research in May. [16]
The advantages of general-purpose L1 lie in its deep ecosystem and strong security. It naturally possesses a large number of DeFi protocols, users, and liquidity resources, enabling assets to be quickly combined, traded, and form markets after being put on-chain. However, this also brings compliance thresholds, operational complexity, and transaction costs. Especially for institutional assets, the openness of DeFi can actually become a burden.
In contrast, while dedicated blockchains (including Permissioned L1 and Customized L2) have relatively lower liquidity, they can build more targeted compliance and risk control logic for specific asset types. For example, the RWA dedicated blockchain can integrate KYC /AML modules, audit loops, access control, and on-chain/off-chain data bridging interfaces by default, making it naturally suitable for complex assets such as private loans, fund shares, and real estate certificates. These assets are typically high-value, low-frequency transactions, with extremely high requirements for latency, cost, and regulatory coordination, which are difficult for general-purpose public blockchains to meet.
The trade-off between the two can be understood as follows: general-purpose chains prioritize "breadth," while dedicated chains emphasize "depth." The former is more like a highway, encouraging the free flow of all assets and protocols; the latter is more like rail transit, with clear planning and an orderly structure, suitable for asset-heavy and compliant institutions. However, regardless of the path taken, the essence of RWA still cannot bypass the collaboration of off-chain processes—including custody, bridging, auditing, and judicial arbitration mechanisms, which cannot be solved by the "chain" alone.
The author believes that in the short to medium term, mainstream institutions will still favor Ethereum and its L2 as issuance platforms, given its mature ecosystem, rapid deployment, and abundant developer resources. For example, Robinhood's announcement of tokenizing its stock and launching its L2 platform on Arbitrum has further boosted VC confidence in Ethereum L2. However, in the medium to long term, the rise of dedicated RWA chains is almost inevitable. These will not replace Ethereum, but rather form a functional division: Ethereum will handle open liquidity and composability, while dedicated chains will serve asset issuance, sustainability, settlement, and regulation.
US Stocks on the Blockchain: A Divergent Trajectory Between Reality and Potential
As RWA (Real World Assets) has become one of the focal points of the industry narrative since 2024, on-chain US stocks, as the most symbolic and controversial asset type, are ushering in a new wave of attempts. Looking back, the path of US stocks on-chain can be roughly divided into four stages[17]:
- STO (Security Token Offering) Phase (2017–2019) : This phase emphasized the compliant issuance of security assets, hoping to automate management by placing equity into blockchain smart contracts . However, high operational costs, unclear regulations, and insufficient liquidity prevented it from breaking through the closed testing ground and it quickly faded into obscurity.
- Synthetic Asset Phase (2020–2021) : Synthetic stocks, represented by sTSLA and mTSLA, created on-chain spread tracking products through over-collateralization . While highly innovative, they were essentially trading derivatives , facing systemic risks and liquidity shortages, and ultimately exited the market during downturns.
- CEX Exploration Phase (2021–2022) : Leading centralized exchanges such as Binance and FTX attempted to launch "on-chain stocks" and partnered with custodians to hold real stocks;
- The compliant RWA model phase (2024–present) : From Dinari and Backed to Kraken and Bybit, and then to Exodus's SEC approval to put shares on the blockchain, this round of practice emphasizes the compliance path, off-chain custody and on-chain mirroring, attempting to open the door to equity on-chain in the form of "digital certificates".
As can be seen, the first three paths all failed due to liquidity difficulties or regulatory pressure. While the current RWA model is more pragmatic and robust, it still faces numerous structural obstacles. Although the technical barriers to on-chain US stocks have been significantly lowered, mainstream crypto venture capitalists generally remain pessimistic about its prospects, primarily due to a "liquidity mismatch." Potential buyers of on-chain stocks are largely limited to users with existing on-chain funds. Off-chain potential users tend to use their existing securities accounts or brokerage platforms for trading and are unlikely to specifically purchase USDC or open wallets across chains. In other words, the on-chain stock market does not bring in new money; it only dilutes existing funds.
Yuki Yuminaga of Fenbushi further pointed out that the problem with on-chain tokenized assets is that the cost of "rebuilding" liquidity is extremely high. Over the past few decades, Nasdaq and NYSE have built mature market maker mechanisms and high-frequency trading systems; while on-chain assets need to restart price discovery, trading depth and arbitrage channels through AMM or DEX markets, which is almost a "reverse globalization" from scratch. [18] Therefore, the more realistic problem is that most on-chain stocks are currently "pseudo-equity assets" without voting rights and shareholder rights. Their financial functionality is not as good as on-chain stablecoins, and they do not have the growth potential of native crypto assets, so it is naturally difficult to enter the core allocation logic of VC.
Despite various structural issues, on-chaining US stocks still offers several visible medium-term values. For example, on-chain stocks enable 24/7 global trading, breaking the time constraints of traditional trading platforms and attracting users in asynchronous markets. Furthermore, as a standard ERC-20 asset, on-chain stocks can be used in financial modules such as lending, collateralization, and liquidity provision, forming new combination strategies. The realization of these advantages hinges on users already being on-chain, holding stablecoins, and having established DeFi usage habits. This dictates that at the current stage, on-chaining US stocks is more suitable as a supplementary tool than a foundational asset.
Fund Management: DAT (Digital Asset Treasury)
Narrative Shift: From On-Chain Assets to Manageable Assets
In 2025, DAT (Digital Asset Treasuries) became the intersection of the capital market and the blockchain narrative, becoming one of the fastest-growing sectors with the strongest capital aggregation effect within the RWA narrative. This phenomenon is not accidental, but rather the result of the convergence of multiple structural trends:
First, the clarification of the regulatory environment paved the way for DAT. With the approval of Bitcoin spot ETFs and the large-scale tokenization of US Treasury bonds, on-chain assets began to have real legal status and a clear compliance framework. This allowed institutions to allocate funds on-chain for the first time with peace of mind through funds, trusts, SPVs, etc., and DAT played the role of a "treasury" connecting traditional capital with the on-chain world.
Secondly, the market narrative itself has also shifted. In the past few years, the blockchain industry has been keen on the narrative of infrastructure (L2, DA, Modular), but starting in 2025, it began to shift towards the concrete implementation of the "asset layer." Rather than building new networks, it's more about providing funds with an available and composable asset pool. DAT has emerged in this context. It is essentially a structured financial product that packages assets, aggregates returns, and constructs portfolios; it is a blockchain version of "Grayscale Trust + Active ETF".
Third, the product form of DAT itself is evolving. From the initial "buying US Treasury bonds on-chain" to the current "re-staking + multi-asset strategy combination", more and more DAT products are taking on active management responsibilities, with built-in yield routing and leverage structures. This makes them not only a "storehouse" of assets, but also an on-chain "asset strategy engine".
From a macro perspective, the end of the interest rate hike cycle and the market recovery have prompted a large amount of "low-risk-averse" funds to seek new allocation channels. DAT perfectly meets the core requirements of transparency, compliance, strong diversification, and visible returns. Therefore, DAT is not a flash in the pan, but an inevitable product of the current convergence of the capital market, on-chain assets, and product engineering. It is both an extension of RWA and a concrete form of asset financialization moving onto the blockchain.
Market Landscape: The Rise and Capital Expansion Path of DAT
As of October 2025, the DAT market has experienced explosive growth, with the total number of DAT companies soaring from 4 at the beginning of 2020 to 142, with 76 new companies added in 2025 alone, demonstrating the high enthusiasm of institutions for embracing crypto assets. In terms of geographical distribution, the United States ranks first with 60 companies (43.5%), followed by Canada (19 companies) and Hong Kong, China (10 companies). Although Japan has only 8 companies, it has Metaplanet, which ranks fifth in the world and is the largest DAT company in Asia. [19]
In 2025, DAT companies spent $42.7 billion on crypto assets, with more than half of that occurring in the third quarter, particularly in Q3 alone, where $22.6 billion was spent, a record high. Strategy (formerly MicroStrategy) topped the list with $70.7 billion in BTC holdings, accounting for nearly half of all DAT companies' crypto assets and holding 3.05% of the total BTC supply. Other emerging DAT companies such as BitMine Immersion, Sharplink, and Forward Industries quickly rose to prominence in the latter half of 2025, demonstrating the potential for the rise of the Altcoin DAT market. [19]
The surge in DAT's price is inseparable from the upgraded capital strategies behind it. These companies continuously purchase Bitcoin through capital market tools, and with the stock price significantly higher than its net asset value (NAV), they construct a self-reinforcing capital flywheel, creating a leverage effect far exceeding that of traditional Bitcoin spot holdings. In essence, they package Bitcoin exposure in a "corporate form" and leverage public market financing capabilities to financially engineer and capitalize the act of "holding Bitcoin."
DAT's core model relies on a "positive feedback loop": when its stock price is higher than the NAV (Net Asset Value) of each Bitcoin share, the company can raise small amounts of capital through an "At-the-Market Offering" (ATM) mechanism. Because new shares are issued at a premium, the company uses the funds to purchase Bitcoin, which in turn increases the amount of BTC represented by each share (because the BTC obtained from the newly issued shares is higher than the dilution ratio), further increasing the NAV and supporting continued stock price increases.
For small companies that haven't yet reached the threshold for ATM (Alibaba's largest cryptocurrency offering) implementation, PIPE (Private Investment in Public Equity) can be a viable way to quickly raise funds from specific institutions or angel investors. Although PIPE usually involves share discounts and equity dilution, it remains a viable path for many emerging DAT (Digital Assets and Technologies) companies to launch BTC purchase plans. In a better market environment, this type of discounted financing can often quickly translate into an accelerator for stock price increases.
The key indicator for evaluating the capital efficiency of a DAT is the "Bitcoin Yield"—the amount of Bitcoin that can be converted into each unit of equity. The higher the Bitcoin Yield, the more efficiently the company can accumulate BTC assets without significantly diluting shareholders, and it often corresponds to a higher market valuation premium. [20]
Risk Structure: Premium Dependence and Cyclical Vulnerability
However, this model also has strong cyclical risks: once the company's stock price falls to or below the NAV level, further financing will "dilute" the BTC content per share, the capital flywheel will fail, or even reverse into a negative feedback loop. As VanEck analysts have said, "When you are trading at NAV, the issuance is no longer a strategic behavior, but a predatory behavior." [20] Therefore, DAT is not simply a "company that holds tokens", but a capital market agent for on-chain assets. Their valuation does not reflect the current price of BTC, but is a derivative of its "future ability to purchase coins". These companies translate the narrative of crypto assets into the language of the capital market, introduce financial leverage and market liquidity to BTC through listing channels, and are also exposed to higher emotional and institutional risks.
Many VC investors have also pointed out potential problems with the DAT model. For example, Spencer Bogart of Blockchain Capital warned that the risk of DAT premium correction is very high, especially when the underlying asset rises, but the DAT premium shrinks rapidly, resulting in "being right in the direction but still losing money". Investors may be stuck at high prices and bear "double risk". [21] Emma Cui of Long Hash Ventures pointed out that a large number of new DATs are currently being issued, and in the next few months, there will be additional supply pressure from the unlocking of initiator/insider shares. If participants do not keep up with the purchase speed, the premium will be compressed or even turn negative, forming a systemic negative feedback. [22] Yuki Yuminaga of Fenbushi believes that when the market is good, the premium loses its weight and the valuation is pushed up by market sentiment (20%-100% premium). Under the influence of volatility or adverse news (such as the FTX incident), GBTC once fell to a discount of -40%, and DAT may also repeat the same mistake. [23]
In summary, DAT is not merely a new packaging for "corporate holding tokens," but rather a key player in the financialization of Bitcoin—a trading machine that can turn BTC into "weighted stocks." Their success depends on market sentiment, regulatory space, fundraising capabilities, and transparency in information disclosure; they shine brightly in favorable market conditions, but their valuations can evaporate rapidly in unfavorable ones.
Asset Stratification: Strategic Positioning of Bitcoin, Ethereum, and Solana
As Digital Asset Treasury (DAT) gradually becomes an important organizational form connecting traditional corporate structures with on-chain systems, the functional roles played by different on-chain assets within it are beginning to show a clear differentiation. This differentiation is not based on short-term market performance, but rather stems more from the asset's inherent technical attributes, governance structure, and compatibility with existing institutional frameworks.
First is Bitcoin (BTC). In the current DAT structure, BTC is still the most typical and mature core asset, occupying an absolute dominant position. [19] This position does not come from its on-chain operability, but rather from its extremely low system complexity . BTC has a fixed total supply, no governance participation, and a single function, making it closer to a "digital reserve asset" that can be included in the balance sheet of traditional companies and capital markets in a relatively familiar way. BTC-type DATs, represented by Strategy, do not rely on on-chain participation in essence, but rather construct the logic of corporate valuation and capital structure through asset holding itself. The advantage of this type of model is that it has a clear structure and low operating threshold, but it also determines that it plays a greater role in DATs.
