Author: Shao Jiadian
Recently, the wave of RWA (Real World Assets tokenization) has swept through social media in the mainland. From the blockchain circle to the finance circle, from self-media to investment groups, it seems that overnight, RWA has become synonymous with financial freedom. Various 'RWA project teams', 'full-service providers', and 'mentor teachers' have sprung up like mushrooms after rain, each swearing that RWA is the next hot spot, and if you miss it, you will regret it for life. However, the busier this circle gets, the more it seems chaotic, with those cutting leeks, speculating, and selling anxiety all mixed in. I really can't help but throw a bucket of cold water—this circle is now a boiling pot of excrement, with a few chives floating on the surface, while underneath, scythes bubble away.
Today, we won't discuss technical details; let's peel back the layer of the emperor's new clothes and talk about the 10 most painful truths in the RWA circle. Buckle up; let’s drive straight in.
Truth 1: RWA is a financing tool, not a myth of wealth creation.
Many people envision getting rich overnight when they hear about RWA, thinking that simply throwing any asset onto the blockchain can transform it into a shiny 'wealth code'. Wake up! The core of RWA is to tokenize real-world assets through blockchain technology, turning them into tradable digital assets. In simple terms, it is a financing tool that helps companies activate their assets or provides investors with more choices. It is not a lottery, nor a money printer.
Do you think that buying RWA tokens is equivalent to buying a 'future hundredfold coin'? Don’t dream. The revenue model of RWA is not much different from traditional financial products; it relies on the cash flow or appreciation potential of the underlying assets. Those who frequently shout 'invest in RWA for wealth freedom' are mostly trying to cut your leeks. RWA can help companies solve financing problems, but it has nothing to do with the fantasy of ordinary people getting rich.
Truth 2: Truly compliant RWA is basically inaccessible for mainland Chinese users.
If you think RWA is a 'feast everyone can participate in', then I have to dampen your spirits: truly compliant RWA products, like those issued in Hong Kong and Singapore, are basically inaccessible for users from mainland China. Why? Because compliant RWA products must adhere to strict financial regulations, and issuers must ensure the legitimacy of investors' identities and sources of funds, as well as comply with local securities laws, anti-money laundering laws, and other regulations.
RWA products in Hong Kong target qualified investors (professional investors) who need to provide proof of several million Hong Kong dollars in assets and pass strict KYC (Know Your Customer) and AML (Anti-Money Laundering) checks. As an ordinary retail investor from the mainland, you can’t even open an account, let alone buy. Those shouting 'everyone can invest in RWA' in WeChat groups or Douyin are not compliant products; most are air coins or funding pools specifically targeting your wallet.
Truth 3: Everyone who tells you 'investing in RWA tokens can make money' is just preparing to cut you.
The most disgusting aspect of the mainland RWA circle is the rampant 'air coins' and 'funding pools'. The most magical thing now is that a group of people who can't even distinguish between ABS and REITs have started teaching others how to play with RWA. Their rhetoric is surprisingly consistent: 'Traditional asset liquidity explodes after going on-chain', 'RWA tokens can be traded globally 24 hours a day', 'Holding means enjoying asset appreciation'... Sound familiar? This is exactly the same as the slogan 'blockchain disrupts everything' during the ICO (Initial Coin Offering) era. These projects wave the RWA flag, telling you to invest a few thousand to buy their 'RWA tokens' and wait for hundredfold returns. Brother, come on, where's the good fortune in that? These so-called RWA tokens have no underlying asset support, not even a white paper; they are pure scams.
What’s even more ridiculous is that some projects are engaging in multi-level distribution and recruiting for commissions, which is no different from pyramid schemes. You invest money, and in the short term, you may see 'high returns', but that’s just the front leeks feeding the back leeks; once the funding pool collapses, your principal won't even bubble up. Don’t believe those sayings like 'RWA is the future of blockchain' or 'missing RWA means missing wealth'; the real RWA is a serious financial product, not a casino for you to gamble your fortune.
Truth 4: Companies doing RWA should find brokers, lawyers, and accountants; don’t look for 'intermediaries'.
Companies wanting to do RWA should also keep their eyes wide open. There’s a bizarre phenomenon in the current RWA circle: a group of self-proclaimed 'full-service providers for RWA' intermediaries are more active than brokers, accountants, and lawyers combined. Many 'full-service providers' and 'mentor teachers' have emerged in the mainland, bragging that they can help you put assets on-chain, issue tokens, and sell globally. Haha, most of these people are just intermediaries, doing nothing but facilitating deals and charging you a consulting fee.
Doing RWA properly is similar to doing ABS (Asset-Backed Securities) or REITs (Real Estate Investment Trusts); you need to find a professional broker, lawyer, and accountant to form a solid triangle. They will help you design the transaction structure, run regulatory approvals, conduct due diligence, and valuation. What can intermediaries do? They can't even figure out the compliance process; at most, they'll draw a big pie for you and charge you a 'service fee.' If a company wants to do RWA, don’t be fooled by these 'mentor teachers'; finding a reliable financial institution is the right path.
Truth 5: Not everything can be RWA; assets that can't sell off-chain won't sell on-chain either.
A classic line in the RWA circle is: 'Traditional asset liquidity is poor? Just go on-chain! After going on-chain, it can be traded globally!' As if any asset thrown onto the blockchain can become a hot commodity. Brother, be realistic! If an asset can’t sell off-chain, why would it sell once it’s on-chain? The essence of RWA is asset securitization, and the core is the quality of the underlying assets and the revenue model. If your asset is a mess, like a pile of unwanted inventory or a vacant office building, going on-chain doesn’t change anything.
Hong Kong investors are not fools; they are smart money. They look at cash flow, risk exposure, and exit mechanisms when investing in RWA. Your 'annualized 20%' return model can be seen as nonsense at a glance. RWA is not magic; whether on-chain or off-chain, the logic of assets remains unchanged. Those shouting 'everything can be RWA' are just trying to get you to spend money to make mistakes while they profit from it.
Truth 6: You don’t have to set up a subject in Hainan; data compliance is not that mystical.
The mainland RWA circle has a 'mystical' operation: many project teams say that if you want to do RWA, you must set up a subject in Hainan to handle data compliance for overseas transfer. Come on, is it really that exaggerated? Data transfer indeed needs to be compliant, but regulations like the 'Data Export Safety Assessment Measures' have long established procedures at the national level. Not all data exports require approval; only cross-border transmission of sensitive data needs to be filed or assessed for safety. Compliance requirements for data export depend on various factors such as the specific data type and export scenario, not every situation needs to go to Hainan.
Moreover, Hainan's special policies mainly target offshore businesses in the free trade port, not the only route for RWA. When companies do RWA, the core is to run through compliance processes, such as finding lawyers to outline data compliance plans and communicating with regulators for filing. Don’t listen to those who say 'you must go to Hainan' or 'Hainan is the paradise for RWA'; the path to compliance has always been transparent, so why the detours?
Truth 7: Hong Kong's RWA products basically have no secondary market; global trading? Dream on!
There's a common 'myth' in the RWA circle: RWA tokens can be traded globally with unbeatable liquidity. What’s the reality? The Hong Kong SFC is particularly cautious about secondary trading; currently, RWA products issued in Hong Kong have only allowed very limited inter-institutional trading. AntChain's charging pile RWA and Xunying Group's battery swap cabinet RWA are essentially still private placement products, and retail investors can't even touch the trading interface. Why? Because RWA is essentially securitized assets, subject to strict financial regulation, and trading must comply with securities laws and exchange rules.
Do you think that buying an RWA token allows you to trade globally 24 hours a day like trading Bitcoin? Dream on! RWA products in Hong Kong usually target institutional investors or qualified investors; retail investors simply cannot get involved. Those projects claiming 'global circulation of RWA' are mostly just using 'blockchain' as a gimmick; in reality, it's just a closed fund pool. Liquidity? Nonexistent.
Truth 8: The RWA track is not the wealth code for ordinary people; don’t be fooled by anxiety marketing.
One of the most annoying aspects of the RWA circle is the overwhelming anxiety marketing. Phrases like 'RWA is the future of blockchain', 'missing RWA means missing wealth', and 'ordinary people can also rise through RWA' can really make one feel nauseous after hearing them too often. Brother, RWA is a serious financial track, dealing with the combination of asset securitization and blockchain technology; what does it have to do with ordinary people making money?
Those who can truly make money from the RWA track are either professional financial institutions or players who understand asset operations. Ordinary retail investors? At most, they can buy some compliant RWA products and get a fixed return, which is not much different from buying bonds. Those hyping 'RWA can make you rich overnight' are just trying to get you to pay for their 'courses' or 'tokens'. Don’t let anxiety hijack you; RWA is not your lifeline.
Truth 9: Compliance and regulation are the soul of RWA; without compliance, RWA is just an empty check.
The greatest value of RWA lies in compliance and regulation. Without these two, what’s the difference between RWA and air coins? Compliant RWA products must have clear underlying assets, transparent transaction structures, and be subject to scrutiny by financial regulatory authorities. The reason why RWA in Hong Kong is reliable is that it is under strict regulation by the SFC (Securities and Futures Commission of Hong Kong), ensuring the rights and interests of investors.
Looking at those 'RWA projects' in the mainland, how many are truly compliant? Most don’t even have white papers; where the assets are and how the profits come in is all just talk. If you invest your money and the project team runs away, who do you cry to? The soul of RWA is compliance and regulation; without these two, any 'RWA' is just an unguaranteed empty check.
Truth 10: The issuance cost of RWA is not low; it may be higher than traditional financing.
Lastly, many people think RWA is a 'low-cost financing tool', but that’s not the case at all. RWA issuance involves asset assessment, legal due diligence, transaction structure design, blockchain development, and regulatory approval—each step costs money. When you add it all up, the issuance cost of RWA may be higher than traditional loans or equity financing.
Especially for small and medium-sized enterprises, wanting to issue RWA still faces high upfront costs, such as lawyer fees, audit fees, and technology development costs. Hong Kong's RWA projects can easily cost several million Hong Kong dollars, and few mainland companies can afford that. So don’t listen to the nonsense that 'RWA is a savior for small and medium enterprises'; financing methods should depend on the company's situation, and RWA is not a panacea.
Conclusion: Wake up, RWA is not your lifeline.
The purpose of writing this article is not to deny the value of RWA—asset tokenization is indeed a future trend, making asset securitization more efficient and transparent; it is indeed a direction for the combination of blockchain and finance. But the problem is: this circle is too restless, too eager for quick success, and treats leeks as fools. Air coins that cut leeks, anxiety-selling marketing accounts, and intermediaries charging sky-high fees have made a serious financial track a mess.
Ordinary people wanting to participate in RWA can at most buy some compliant RWA products and get a stable return; don’t expect to get rich overnight. If companies want to do RWA, they should seek professional institutions and go through compliance processes; don’t let 'full-service providers' rip you off. RWA is not a myth, nor a casino; recognize these 10 truths, and don’t let your wallet become someone else's leek field.
If after reading this article, you still want to jump into the fire pit of RWA—then please tell me your wallet keys before you jump; I’ll keep them safe for you.
