Currently, RWA is indeed very popular.
From the early April Hong Kong Web3 Carnival to the recent discussions in the Web3 lawyer community, everyone is talking about RWA. There’s a reason for that; after all, RWA is a relatively reliable and safe way to 'issue tokens.'
A few days ago, attorney Mankun shared insights on new RWA projects in China, as well as current RWA gameplay.
However, if we talk about precedents and leaders in RWA, we should turn our attention to the US. One of the more representative examples is probably Ondo. Especially in recent days, the SEC has met with them to discuss compliant issuance of tokenized securities, which certainly adds a big 'S' to Ondo's report card.
*Image source: screenshot from SEC documents
Therefore, in this article, attorney Mankun will discuss the playbook for US RWA based on Ondo's RWA model.
Analysis of Ondo RWA Model
The reason Ondo is considered a leading project in the industry is that, while most projects are still pondering 'how to bring real assets on-chain for token issuance and financing,' Ondo has already moved US Treasury bonds and money market funds onto the chain and integrated them into DeFi gameplay.
Take Ondo's issued token USDY (Ondo US Dollar Yield Token) for example; the real assets it is anchored to are short-term US government bonds and bank deposits, which means:
First, this asset has solid yield support. USDY is essentially a yield-bearing stablecoin, allowing investors to enjoy the returns from US debt or bank deposits daily.
Second, transparency and security are guaranteed. The underlying logic of the asset, such as custody, auditing, and yield distribution, still follows traditional financial compliance standards.
Additionally, USDY employs a bankruptcy isolation structure, completely separating reserve assets from the issuing entity, ensuring that in extreme situations, investors have priority claims on the reserve assets. Besides USDY, Ondo has also issued OUSG, which is anchored to short-term US Treasury bond funds, and its logic is similar to that of USDY.
Therefore, attorney Mankun believes that, to some extent, Ondo is more like transferring traditional financial wealth management products and clearing mechanisms onto the chain, ensuring returns and controllable risks while providing on-chain liquidity for assets.
Speaking of asset liquidity, we must mention another product from the Ondo team, Flux Finance.
If issuing tokens is just the first step for RWA, then how to enable RWA tokens to circulate on the chain is the key to appreciation. Hence, there is Flux Finance—a lending protocol specifically for RWA.
Flux differs from common lending protocols (like Compound and Aave) in that it allows users to use these tokenized government bonds (like OUSG) as collateral to borrow stablecoins like USDC.
So, the question arises: Treasury bonds have 100% security attributes; will placing them in DeFi trigger US regulation?
Ondo's solution is a permissioned system: not everyone can borrow using OUSG; they must pass compliance checks to ensure they are qualified investors. In other words, through a centralized review system, it avoids the chaotic state of 'any asset can be collateralized' in DeFi, ensuring that on-chain lending activities occur within a compliant framework.
This design serves as a template for the overall compliance of RWA + DeFi on the chain.
In fact, by this point, the gameplay for RWA has already formed a closed loop. However, Ondo continues to expand its territory in the RWA field—since RWA is so hot, and every project wants to do RWA, how can it be issued, and where can it circulate? There must be some infrastructure.
Indeed, Ondo has not been idle at the infrastructure level. It has built its own chain, Ondo Chain, specifically designed for RWA, with the core gameplay being:
Permissioned validators, traditional financial institutions like Franklin Templeton and WisdomTree serve as network nodes, ensuring the safety and compliance of the network.
Open application layer, any developer can issue RWA tokens or create dApps on this chain.
Built-in oracles + cross-chain bridges, the asset prices and interest rates on-chain are directly fed by the validators.
This entire framework meets institutional requirements for safety and regulation while ensuring the native openness of Web3.
Of course, with the infrastructure for everyone to issue tokens, token standards also need to be established. Thus, in 2024, Ondo announced plans to create Ondo Global Markets (Ondo GM).
Initially, the design of Ondo GM was relatively traditional, adopting a 'brokerage instruction model' where tokens represent investors' positions directed by traditional brokers, leaning towards a permissioned and closed model.
However, according to a blog post from February 2025, after in-depth discussions with developers, TradFi institutions, and US regulators, Ondo GM is redesigning the tokenization framework to create RWA tokens similar to stablecoins, where the tokens themselves can circulate freely, but the distribution layer embeds compliance licensing logic. This way, any token issuer can issue compliant and flexible RWA tokens through Ondo GM.
In summary, while others are still researching how to issue RWA assets, Ondo has already built a comprehensive system for how RWA assets can be smoothly integrated from the traditional financial world to the blockchain.
Ondo's Role in US RWA
After discussing Ondo's RWA model, let's take a step back and see what problems Ondo has solved and what progress it has driven in the US RWA industry.
Attorney Mankun believes we can start from the following two levels:
Market Level
In the current industry, many people discussing RWA mostly focus on the narrative of 'helping traditional enterprises issue tokens for financing.' However, attorney Mankun believes that the true value of RWA has never been just issuing a token. For quality assets, exploring RWA means providing opportunities for assets with inherent value to achieve higher liquidity and usage efficiency, with lower thresholds compared to ABS and REITS, and more possibilities to utilize the programmability of tokens to discover more ways to activate assets in the future.
At this point, Ondo's design has set a standard for the industry.
Whether it’s the two RWA tokens it has already issued or the Ondo GM that is being developed, they are building a new financial market that circulates 24/7, allowing for instant minting and redemption, breaking the traditional financial rule of 'only trading during business hours.'
Of course, circulation is just the first step. Traditional financial products can circulate, but their liquidity is often limited to specific times and platforms, and cross-market, cross-asset play is basically locked down. It's like buying a gold ETF or bond fund; these assets may be 'flowing' in your account, but what can you do? At most, you wait for price fluctuations or switch platforms for trading; participating in lending, yield, or derivatives like play is basically impossible.
Ondo's RWA design aims to break down these 'walls.' Especially with DeFi, it can bring these tokenized traditional financial assets into various on-chain application scenarios. In simple terms, it allows these assets, which could only 'earn passively,' to be reorganized and appreciated on-chain, which may be the true value direction of RWA.
Compliance Level
The logic at the market level is actually quite realizable; as long as there is technology and funding, it can be done. But in the US market, the key hurdle to moving securities assets onto the chain is compliance, especially given the pressure from the SEC in recent years.
Thus, Ondo's ability to grow strong in such an environment certainly has its compliance reasoning.
First, attorney Mankun discovered during his visit to the Ondo platform that many products cannot be used under US IP, such as token types. This means Ondo has designed its products to actively limit US users, circumventing the high-pressure areas of US regulation.
Of course, simply shielding US IPs is not enough. Since the anchored assets come from the US market, Ondo must strictly adhere to US compliance standards in custody, auditing, and bankruptcy isolation, even if users are from overseas. Therefore, Ondo has implemented measures such as: custodial assets held in US-regulated trust institutions (like Ankura Trust), strict licensing and qualification checks for lending activities, and designing bankruptcy isolation mechanisms to ensure investors have priority claims.
But the question remains: what about the overseas market? What should the US market do?
In 2025, Ondo, in collaboration with Davis Polk law firm, negotiated with the SEC on the compliance of tokenized securities, leading to the aforementioned 'wrapped security token' proposal, which embeds permission controls in the distribution layer to explore paths like registration exemptions and market structure exemptions, seeking legal ground for tokenized securities in the US market.
In other words, Ondo is steadily navigating the non-US market using the existing compliance framework while proactively engaging in dialogue with US regulators to explore the possibility of compliant RWA asset implementation in a high-pressure environment.
Practical advice from attorney Mankun
After all this discussion, let's return to the most critical question: How exactly does one play with US RWA?
Attorney Mankun's advice is: don't fantasize about instant success. Avoidance + exploration, balance + gradual steps, is the most realistic approach.
First, the market lacks products but needs 'pathways.' The US securities market is large and of high asset quality, making it an ideal pool for RWA. But the regulatory barriers are also high, from securities law and market structure to brokers and anti-money laundering; each link is a 'minefield.' Although a crypto-friendly SEC chairman is in office now, no one knows where the regulatory direction will turn next. Therefore, it’s best to land in non-US markets first, ensuring asset compliance with regulations.
Second, while trying to design more gameplay, one must also be aware of the boundaries. Especially with DeFi, while the gameplay is rich, in the US market, the more flashy the play, the more sensitive the regulators become. Additionally, don’t always think about following the path of decentralization; the facts show that compliance still requires centralized participation, especially in high-risk scenarios like lending and derivatives, where centralized restrictions make the gameplay safer and more transparent.
Third, engage more with regulators to pave the way in advance. Don't think about circumventing the regulations; it's not possible. US market regulation is strong, and to grow, one must have their own compliance layout, including early collaboration with law firms or forming their own legal team to actively engage with the SEC and explore compliance paths.
In summary, first dig deep into the two major moats of market and compliance, then gradually find ways to break through; don’t think about achieving everything in one go.
