RWA: On-chain IPO and recombination of real world assets

Written by: Paolo & Andy @VDX

TL;DR ：

Big Picture: Why is it said that the on-chain financialization is a top-level national strategy and market trend in the United States – RWA is a tool for the global asset “de-geographic output and competition for on-chain liquidity”. The United States constructs a highway network for the free flow of global funds and assets by using high-quality assets + open borders + standard output, pushing the valuation and settlement radius of the US dollar onto the open chain.

The essence and core value creation of RWA: The essence of RWA is the on-chain reissuance of real-world assets, rewriting “issuance - circulation - pricing - trading - settlement - combination”; its value comes from 1) efficient and trustworthy settlement, 2) open matching of funds and assets, 3) asset combinability. Enhancing corporate capital efficiency and asset plasticity.

Market landscape: Early competition focused on on-chain asset issuance, while the next stage will focus on channel and ecosystem integration: The current emphasis is on ensuring compliant issuance and on-chain integration, while running through leading models; as the barriers to issuance lower, competition will shift towards channel control and ecosystem collaboration (market making, subscription and redemption, collateral, hedging, distribution). Integration of DeFi protocols, liquidity routing, and scene access are key focal points.

Opportunities for entry at different stages of the industrial chain: core stages include “issuers – tokenization platforms – distributors”, along with third-party service providers such as blockchain financial contracts, oracle services, law firms, custody, and auditing. In the future, the industry will converge into a “RWA Prime Broker” super platform, integrating issuance, compliance, clearing and settlement with distribution/liquidity.

Publisher: In the short term, focus on yield and liquidity realization, prioritizing strong consensus and differentiated underlying.

Tokenization platform: relatively low value capture, may be integrated upstream and downstream, focusing on compliance and neutrality.

Distributors: Master the control of capital routing, with the potential to achieve scalability, focusing on capital acquisition and channel coverage.

Big Picture: Why is the Financial Chain Transformation a Top-Level National Strategy and Market Trend in the United States?

Researching Project Crypto, the Trump administration, and SEC Chairman Paul Atkins' various policies and statements, we believe that the on-chain financial strategy may have risen to a de facto top-level national strategy in the United States. The positioning is to make the US dollar an open chain “programmable settlement standard”; the tools are stablecoins and RWA; the path is legislative anchoring + on-chain US dollar assets + funding channel access (traditional financial institutions, CEX, DeFi); the goal is to expand the interest rates and rules of the US dollar into an open chain settlement gravitational field. From the GENIUS Act stablecoin bill passed in July to the accelerated entry of traditional asset management, exchanges, and banks, this chain has already been put into practical operation.

The main approaches for advancing the on-chain finance in the United States include three aspects.

System lever: Decentralization of issuance rights, with pricing and anchoring rights becoming more market-oriented. Establish a licensing framework for stablecoins/RWA at the federal level, including reserve quality, disclosure frequency, and transparency standards; the control lever evolves from “permission control” to “market selection and competition.”

Asset Hand: Transform “US dollars, US treasury bonds, US stocks” into blockchain; bring US dollar assets on-chain, allowing global DeFi/on-chain institutions to use US dollar interest rates as the “gravitational field”; collateral and hedging become accessible, minting, redemption, and clearing speed up, attracting idle stablecoins and risk capital globally into US dollar assets.

Channel grip: Standardize the “clearing and settlement pipeline” to an open chain.

Integrate packaged on-chain assets into traditional financial institutions (brokerages, stock exchanges), crypto CEX, and on-chain DEX/DeFi protocols, expanding user and capital access. At the same time, as regulatory details for on-chain asset issuance are released, gradually embed regulatory logic into the protocols.

Long-term impact trend

1. On global finance and capital flows: The “gravitational field” of the US dollar expands, and the on-chain pricing power and asset anchoring power of the US dollar are strengthened.

2. For other regions: liquidity is siphoned off, “regulatory follow/defense”, forcing regulatory and market infrastructure upgrades.

3. Regarding the cryptocurrency industry: the issuance of stablecoins has surged, and the value of crypto assets has risen, but there is a structural differentiation.

4. Opportunities for RWA issuers/participants: RWA connects to the global funding highway, reducing incremental and financing costs, and releasing liquidity of assets in financial Lego.

RWA Core Value Creation: Beyond Financing

• Essence = Asset Reissuance + Full Process Rewrite

• Value = Settlement Efficiency × Distribution Radius × Composability.

The value creation of RWA closely revolves around the core advantages of blockchain technology:

Efficient and trustworthy clearing and settlement: Reshaping the underlying architecture of enterprise operations

To B (financial institutions) – Achieve upgrades in underlying infrastructure and more standardized/convenient asset issuance, address issues of trust, traceability, and transparency through blockchain technology, and achieve more efficient clearing and settlement, gradually transforming the traditional financial system.

To enterprises – reduce intermediary wear and tear, simplify cross-border and over-the-counter processes, enhance reconciliation and penetration, accelerate capital turnover.

Open Finance: Breaking the Growth Ceiling

By allowing high-quality assets to enter the global clearing and settlement network, it helps to improve the existing difficulties in financing through channels, enhances the matching efficiency between the funding side and the asset side, significantly expands the issuance and distribution radius, and dilutes the constraints of “financing difficulties/expensiveness” with networked liquidity, greatly improving capital allocation efficiency and opening up new imaginative space for corporate growth.

Composability: Ignite Business Model Innovation

Connect off-chain assets with on-chain funds to achieve permissionless combination and leverage of assets in a more efficient network. On-chain, combinations such as “yield enhancement + hedging + re-staking” are allowed, forming a new paradigm for asset operation.

Industry Chain: How Enterprises Position and Participate

• Issuer - Tokenization platform - Distributor three-tier structure, with neutral third parties (oracle/custodian/law firm/audit) forming the foundation.

• The focus of competition has shifted from “whether to issue” to “channel and ecological integration,” ultimately converging on RWA Prime Broker.

The core components of the RWA industry are asset issuers + tokenization technology platforms + distributors, along with third-party service providers (oracles / lawyers / custodians / auditors / on-chain contracts, etc.), which expand to blockchain-native scenarios through on-chain packaging after off-chain compliant issuance.

• Positioning at the three ends of the industry chain: Issuers connect compliance and quality asset supply, tokenization platforms provide neutral on-chain issuance infrastructure, and distributors integrate ecosystems and control funding entrances.

• Core concerns of enterprises: Issuers focus on yield and liquidity, platforms emphasize compliance and neutrality, while distributors pay attention to user acquisition and channel coverage.

• Competitive landscape: The issuance side is decentralized; the platform side is squeezed by upstream and downstream but will see the emergence of third-party leading neutral platforms; the distribution side is relatively concentrated (including on-chain ecosystems and CEX).

• Current pain points: Lack of cross-border extension motivation at both ends of issuance and distribution; platform technology homogenization and thin value capture.

• Evolution Direction: The industry will converge into a “RWA Prime Broker” super platform, integrating issuance, compliance, clearing and settlement, and distribution/liquidity.

Market Structure and Breaking Opportunities

• First movers enjoy the “traffic × valuation” dividend, with barriers quickly shifting from licensing/issuance to cross-domain integration and operational capabilities.

• The funding side prefers high returns and high liquidity, while the asset side has an oversupply—under this mismatch, quality targets lead the way, with long tails spilling over afterwards.

The current market is in the stage of integrating compliant issuance and attempting ecological integration, running through leading asset cases. The early stage of the market possesses potential traffic and liquidity dividends. Companies that are the first to RWA (Real World Asset) quality assets can enjoy significant “traffic and liquidity dividends”. Early successful cases often achieve excess valuation premiums in the capital market. As the industry develops, the barriers to asset issuance gradually decrease, the market dividends gradually narrow, and competition will shift towards deeper industrial integration capabilities.

RWA underlying assets are mainly divided into two categories:

• Fixed income products (government bonds/MMF/private credit/accounts receivable/physical assets ABS, etc.) provide stable cash flow returns

• Equity assets (stocks/PE/gold/artworks, etc.) provide volatility.

The market development stage aligns with the three core changes brought by RWA to the industry: compliant issuance - open finance - composability. From permissioned token issuance, to permissionless wrappers, and then to the RWA ecosystem, the global mainstream market is gradually opening up compliance boundaries to explore derivative scenarios.

Looking at the current development situation of the capital side and asset side in the market, although the volume of stablecoins on the capital side is showing accelerated growth, most on-chain native funds still prefer on-chain high yield and high odds, and the audience corresponding to RWA assets is relatively scarce in terms of funding; in contrast, the demand for on-chain financing from the real-world asset side is relatively excessive.

Therefore, the asset side should prioritize leading assets and differentiated assets, as well as empower asset appreciation; similarly, as a distribution channel, it should prioritize finding quality assets for funds. Market development should also prioritize mainstream assets with strong consensus and high liquidity. As the scale of the funding side gradually increases, it will gradually spill over to long-tail and alternative assets. Ultimately, in the phase of everything being on-chain, the scale distribution of asset categories will converge to the pattern of traditional financial markets.

Opportunities for breakthroughs in the industry chain segments

Publishers rely on top assets to scale up, creating economies of scale or expanding differentiated assets.

• The market issuance threshold is gradually lowering, and long-term issuers are gradually extending downstream. There is an opportunity in vertical tracks to form leading issuers + bundled third-party service providers, combining distribution channels + brands to achieve stronger bargaining power.

• Long-term decentralized investment banking on the chain (similar to traditional finance where there are local leading asset issuers), but will form regional leading RWA Prime Brokers.

The tokenization platform runs through the issuance channels, connects compliance and technical architecture, and is relatively neutral to third parties.

• The core capability lies in compliance ability, licensing, architecture reuse, and marginal cost reduction.

• Long-term integration by upstream or emergence of third-party leading technology service providers such as Paxos

Distributors seize the funding end and connect the on-chain ecosystem.

• It can be either CEX or on-chain.

• Strengthening long-term barriers and relative concentration at the top

On-chain ecosystem integration

RWA brings asset choices with real cash flows and different risk preferences and yields to the entire on-chain ecosystem, while various on-chain infrastructures also provide additional empowerment for underlying RWA assets.

Analyze the transmission and combination mechanisms of different types of RWA assets on the chain, with the most directly related infrastructure including oracles – DEX – lending pools, etc. Among them, oracles serve as the core infrastructure for the on-chain and off-chain mapping of RWA assets, while DEX acts as a liquidity hub, becoming a key upstream component of the RWA ecosystem.

Due to the different investor profiles for equity-type and fixed-income RWA assets, their impact mechanisms on on-chain infrastructure also vary: equity-type RWA asset audiences pursue volatility, and core infrastructure is transaction-oriented, such as Perp Trading, leveraged lending, etc.; fixed-income RWA asset audiences pursue yield, with inherently low secondary price fluctuations and low trading demand, and core infrastructure is yield-oriented, such as staking, yield swaps (similar to Pendle), etc.

Key Case Analysis: Different Attempts at Compliance and On-Chain

• The trade-off function of Path = Compliance Boundary × Right Confirmation Depth × Distribution Radius

• First “property rights and pricing penetration”, then “channel and market-making arrangement” - clearly define rights/revenue rights and extreme confirmation paths, selecting neutral oracles/custody and issuance paths; simultaneously design CEX + DeFi distribution, market-making/redemption/repurchase and revenue components.

Equity: Stock Tokenization

Currently, there are three mainstream solutions in the market:

1. xStocks / Dinary offshore SPV share tokenization, adopting a B2B business model to connect on-chain and off-chain exchanges, by weakening the underlying rights corresponding to the token (such as voting rights, etc.) to avoid being classified as a securities risk; published in a relatively compliant manner as securities.

2. Robinhood uses CFD contracts to map stock price fluctuations, with tokens only anchoring returns and not corresponding to the ownership of underlying assets. A native token on the chain has not yet been issued; it is quickly establishing its presence and waiting for regulatory policies to be implemented.

3. StableStocks adopts a large account system, where users use stablecoins to subscribe and redeem tokens corresponding to securities trading within the brokerage, targeting a B2C business model.

Core user profiles are divided into three categories:

1. Reach new markets: Cover investors in third world countries or emerging markets who are unable to invest in your company due to traditional brokerage account restrictions.

2. Provide new gameplay: On-chain investors can use the company's stock tokens through DeFi lending or derivatives protocols to play out higher-level leverage and hedging strategies, increasing the trading depth and breadth of the stocks.

3. Empowering traditional stockholders: Traditional long-term holders can enhance their returns through on-chain wealth management (by using options to lock in the underlying stock value and mapping tokens on-chain to provide liquidity for earning excess returns).

xStocks US Stock Blockchain Architecture

Fixed Income: Tokenization of US Treasuries

Ondo Finance outputs risk-free returns on underlying US Treasury bonds to global investors through two wrapped tokens: OUSG (which lowers the threshold for domestic US investors via Reg-D) & USDY (which outputs to global investors via Reg-S)

Core User Profile:

1. Lower the investment threshold: Open investments that were originally only available to institutions or high-net-worth individuals to a wider range of qualified investors globally.

2. Empowering idle funds: Providing yield enhancement on stablecoins for institutions and individuals globally holding large amounts of stablecoins (on-chain hedge funds, on-chain idle stablecoins).

3. Build the yield base: Become the foundation of the on-chain treasury investment portfolio.

OUSG architecture

OUSG Mint Cash Flow

OUSG Redemption Cash Flow

USDY Mint Cash Flow

USDY Redemption Cash Flow

Action recommendations for RWA participants

Prioritize inventorying core assets: sort out assets that have a high level of internal consensus, are easy to standardize, are easily penetrable, have strong cash flow, or possess high growth potential. E.g. mainstream financial assets – high-credit corporate bonds, accounts receivable, gold ETFs, etc.; mainstream equity assets – company equity with high liquidity, high market demand, and high growth potential, etc. Differentiated assets – segmented assets that can amplify brand and channel (such as specific ABS) as a breakthrough in the second phase.

Choose the issuance path: Combine the sale target and channels, integrate mainstream regional top compliance agencies or adopt mature offshore paths such as foreign SPVs. Select a trusted third-party neutral platform (issuance, custody, oracle, lawyer, etc.) to ensure strong binding of price/net value with the underlying and clear KYC/AML and information disclosure boundaries.

Distribution and liquidity integration: synchronously layout on-chain protocols and CEX channels, design market-making/redeeming/rebuying and yield enhancement components (such as staking, swapping); strive to access mainstream liquidity pools and avoid liquidity fragmentation.

Clarify risks: legal penetration and investor suitability – ensure that the definition of rights/entitlement is clear, and the rights/settlement paths are explicit in extreme scenarios; pricing and oracle risks: net asset value/price strongly consistent with underlying assets to avoid liquidity mismatches that trigger runs; operation and reputation – redemption/repurchase and market-making mechanisms are transparent and verifiable, and information disclosure and audit frequency are acceptable to institutional investors.

The essence of RWA is to “reissue” the quality assets of your enterprise on a global blockchain, rewriting the entire process from issuance, circulation, pricing to combination. Its core business value comes from a more efficient and trustworthy clearing and settlement system, an open financial network that breaks boundaries, and a disruptive permissionless combination capability.

Business Action Suggestions:

Strategically emphasize: viewing the on-chain financial chain as a core strategy related to the future competitiveness of the enterprise, rather than a simple financing tool;

Actively embrace in practice: Take stock of the best quality assets suitable for RWA within the organization, prioritize top assets and differentiated assets, and run through the first model case.

Strong cooperation and partnership: Select the top partners in compliance, technology, and global distribution to seize the blue ocean market dividends.