About Real World Asset Tokenization (RWA)

This month, centralized institutions and decentralized public chain projects and protocols such as BlackRock, Mantra Chain, Ondo, Alchemy Pay, Yala, and Ant Group are making various advances and attempts in the RWA track regarding different types of assets and protocol infrastructure.
The involvement of traditional financial giants and the accelerated attempts of various governments make it possible for RWA to truly change the hollowing out and scaling issues of blockchain finance.
The current scale of the RWA track has reached 36.5 billion USD, with an industry growth rate of approximately 60% year-on-year. The main areas involved include private credit, US treasury bonds, commodities, real estate, and equity securities, while the main focus of RWA in Hong Kong, China, is primarily on new energy assets.
Real-world asset tokenization (RWA) has become a hot topic in the crypto space in recent years as a key bridge connecting traditional finance and DeFi, but the controversies accompanying its development have also become increasingly prominent.
1. The potential and risks of RWA coexist.
1. Market Potential and Institutional Participation
The core idea of RWA is to tokenize traditional assets (such as government bonds, real estate, stocks, etc.), enhancing liquidity and programmability. For example, the tokenization of U.S. government bonds grew by 408% within a year, reaching $4 billion, and it is expected that the on-chain RWA scale could reach $16 trillion in the next decade. Wall Street giants like BlackRock have deeply engaged through projects (such as Ondo Finance), promoting the on-chain of securities and attempting to compete for market dominance within a compliant framework. This trend could reshape the power distribution of the global financial system, but it may also perpetuate the centralized control of traditional institutions.
2. Technical Bottlenecks and Trust Conflicts
Despite the possibilities offered by technology, RWA still faces challenges such as on-chain data consistency, oracle reliability, and cross-chain liquidity decentralization. For example, DeFi architecture is difficult to be compatible with traditional financial operations (such as stock splits and dividend distribution), and the synchronization of assets and on-chain data needs to rely on third-party authorities, which conflicts with the decentralized nature of blockchain. In addition, the security of RWA tokenized assets is highly dependent on institutional endorsements, and the participation of ordinary users is limited.
2. The Conflict of Community Governance and Benefit Distribution
1. Token economic model controversy
The Horizon plan of Aave has faced strong opposition from the community due to its profit distribution mechanism and the issuance of new tokens. For example, the profit-sharing ratio decreases from 50% in the first year to 10% in the fourth year, while only 15% of the new tokens are allocated to Aave DAO, with the remaining 85% potentially controlled by the team, raising concerns about the dilution of existing token value. The community believes that the issuance of new tokens is unnecessary and that governance should directly use AAVE tokens to avoid splitting the ecosystem.
2. The Game Between Decentralization and Compliance
RWA projects often need to balance compliance and decentralization. For example, Ondo Finance's architecture relies on traditional financial institutions, and the validation nodes require permission, which leads to the concentration of power in a few institutions, weakening community drive. Similarly, Aave Horizon, as a "compliance instance," may sacrifice decentralization features, raising community concerns about deviations from the core values of the protocol.
Three, the double-edged sword of regulation and compliance
1. Uncertainty of the policy environment
The regulatory direction in the United States is crucial for the development of RWA. The Trump administration may relax crypto regulations, such as nominating crypto-friendly Paul Atkins as SEC chairman, to promote the growth of the RWA market. However, differences in global regulatory standards (such as the EU's MiCA regulations) remain a non-technical barrier, particularly as KYC and anti-money laundering requirements add complexity.
2. The absence of a legal framework
The on-chain RWA needs to address issues such as legalizing asset ownership and compliance across jurisdictions. For example, the tokenization of real estate requires that on-chain records completely match real legal documents, but currently, there is a lack of unified legal and technical standards.
4. Market Acceptance and Long-term Value Controversy
1. Short-term speculation and long-term value skepticism
Some RWA projects have been criticized for their "low liquidity, high FDV" model, artificially inflating valuations through token locking at the expense of long-term sustainability. For example, over 95% of the tokens for projects like Starknet and Aptos are locked, leading to distorted market signals and making it difficult for public investors to benefit. This model may trigger selling pressure after token unlocks, undermining market confidence.
2. The contradiction between institutional demand and retail participation
RWA is mainly aimed at institutional users (such as compliant funds and banks), making it difficult for ordinary users to participate directly, resulting in a lack of community vitality in the ecosystem. For example, the tokenization of assets traded by Ondo Finance occurs more among institutions, with limited influence from ordinary investors.
5. Future Pathways and Possible Solutions
1. Innovative mechanism for balancing the distribution of benefits
The community suggests adopting a layered governance model: retaining AAVE Token as the core governance tool, while ensuring stable DAO revenue proportion through revenue sharing (such as USDC, GHO) rather than incentivizing with new tokens. In addition, proposals can be split and gradually advanced, prioritizing the resolution of liquidity guidance issues rather than hastily launching new coins.
2. Technical Standardization and Cross-Chain Collaboration
A unified RWA tokenization standard (such as asset mapping, clearing processes) needs to be established, and data reliability should be enhanced through oracle networks. Cross-chain protocols (such as Ondo Bridge) could alleviate liquidity fragmentation issues, but security risks need to be addressed.
3. Regulatory Cooperation and Compliance Innovation
The project party must actively cooperate with regulatory agencies to explore compliance frameworks (such as a hybrid architecture of permissioned and public chains), while also promoting the integration of decentralized governance with legal entities, for example, through DAOs holding legal ownership of real assets.
The development of RWA events in Hong Kong and the Web3 Festival in Hong Kong in 2025. This year's Web3 conference focused on the tokenization of RWA.
During the conference, the discussion focused on the Hong Kong Monetary Authority's "Project Ensemble" initiative, which aims to explore innovative market infrastructure to support the settlement using tokenized currency and identify practical applications for domestic and cross-border transactions.
A stable regulatory environment and a diversified product offering (including virtual assets and tokenization of RWA) have attracted a large number of investors.
Summary
The essence of the controversy of RWA is the collision of traditional finance and crypto-native values: it may become a breakthrough for the scale expansion of DeFi, or it may become a new tool for capital manipulation. Its success requires finding a dynamic balance between technological innovation, community consensus, and regulatory compliance, avoiding a repeat of the "token lock-up scam", and truly realizing the vision of asset democratization. #贝莱德数字股票申请#