Internet Capital Markets (ICM) is a product of the integration of the digital economy and traditional finance, reshaping the patterns of capital raising, distribution, and circulation. Through internet technology, blockchain, decentralized finance (DeFi), and other tools, ICM injects new vitality into the global financial market. At the same time, the tokenization of real-world assets (RWA) as an important application direction of blockchain technology is also rapidly rising, attempting to achieve higher liquidity and accessibility by bringing traditional assets on-chain. The two have different focuses in promoting the digital transformation of finance, but both aim for a more efficient, transparent, and inclusive financial ecosystem. This article will analyze the development trends of ICM in the next three to five years, explore whether it will become a hotspot in the financial market, and compare it with the RWA track, incorporating the views of well-known scholars and industry leaders to dissect the advantages and disadvantages of ICM.
1. Definition and Core Characteristics of ICM
ICM refers to the digital transformation of capital markets using internet technology and blockchain infrastructure, achieved through decentralized platforms, smart contracts, and digital assets. ICM encompasses models such as crowdfunding, initial coin offerings (ICOs), decentralized lending, and liquidity mining, emphasizing disintermediation, globalization, and efficiency. Its core characteristics include:
Decentralization and Transparency: Through blockchain technology, ICM achieves transaction transparency, reducing reliance on traditional financial intermediaries.
Global Accessibility: ICM breaks geographical limitations, allowing global investors to participate in capital market investments and financing.
Innovative Financing Models: Such as ICOs and IDOs (Initial DEX Offerings) provide startups with low-cost and high-efficiency financing channels.
In contrast, the RWA track focuses on tokenizing real-world assets (such as real estate, artworks, bonds, etc.) to make them tradable on the blockchain. The core of RWA is to combine the liquidity of traditional assets with the decentralized characteristics of blockchain, emphasizing asset anchoring and compliance.
2. Development Trends of ICM in the Next Three to Five Years
1. Will ICM become a hotspot in the next three to five years?
The development potential of ICM in the next three to five years is mainly driven by the following factors:
Maturity and Popularization of Technology: The progress of blockchain technology (such as Ethereum's Layer 2 solutions and Solana's high throughput) has significantly reduced transaction costs and delays. According to Gartner's forecast, by 2026, blockchain applications in the financial sector will cover more than 10% of the global financial market, and ICM, as one of the core scenarios of blockchain finance, is expected to ride the wave.
Gradual Clarification of the Regulatory Environment: Although there is currently no unified global regulation for cryptocurrencies and DeFi, places like the United States and the European Union are formulating clearer regulatory frameworks. For example, the EU's MiCA (Markets in Crypto-Assets Regulation) is expected to be fully implemented by 2025, which will provide a fertile ground for the compliant development of ICM.
Increase in Institutional Investment: Traditional financial institutions (such as Goldman Sachs and JPMorgan) are accelerating their layout in the blockchain and DeFi fields, with ICM serving as a bridge for institutions entering the digital asset market, its attractiveness continues to grow. CoinDesk reports that the total locked value (TVL) in the DeFi market has exceeded $100 billion by 2024, reflecting capital confidence in ICM.
However, the hot status of ICM also faces challenges. Market volatility, regulatory uncertainty, and technical security issues (such as smart contract vulnerabilities) may limit its large-scale adoption. Nevertheless, considering technological advancements, capital inflow, and policy support, ICM is expected to become one of the core trends in the financial market in the next three to five years, especially in the fields of emerging markets and SME financing.
2. Industry Perspectives
Vitalik Buterin (Founder of Ethereum): Buterin has stated that the core of ICM is 'democratizing finance through decentralized technology.' He believes that the combination of DeFi and ICM can provide financial opportunities for under-served groups worldwide, but emphasizes that compliance and security are key to long-term development.
Cathie Wood (Founder of ARK Invest): Wood pointed out in a 2024 interview that ICM represents 'the next generation of financial infrastructure,' and its low cost and high efficiency will disrupt traditional capital markets, but she also warns investors to be cautious of market bubbles and regulatory risks.
Gary Gensler (Chair of the U.S. SEC): Gensler takes a cautious stance on ICM, emphasizing that 'any ICM project involving securities must comply with existing laws,' but he also acknowledges the potential of blockchain technology, suggesting that improvements in the regulatory framework will promote the healthy development of ICM.
3. Comparative Analysis of ICM and RWA
Although both ICM and RWA rely on blockchain technology, there are significant differences in their goals, application scenarios, and challenges:
1. Commonalities
Technical Foundation: Both rely on blockchain technology and utilize smart contracts to achieve automation and transparency.
Inclusive Finance: Both ICM and RWA aim to lower the entry barriers for financial services, enabling more people to participate in investment and financing.
Global Market: Both achieve global capital flows through the internet and blockchain.
2. Differences
Nature of Assets: ICM focuses more on the creation and trading of native digital assets, while RWA specializes in the digitization of traditional assets, emphasizing the connection with the real economy.
Risk Focus: The risks of ICM primarily stem from technical vulnerabilities and market volatility, while the risks of RWA are more related to the valuation of off-chain assets and legal compliance.
Development Stage: ICM has entered a rapid growth stage (such as the growth of DeFi's TVL), while RWA is still in the early exploration stage, relatively small in scale but with huge potential. According to a Deloitte report, the RWA market is expected to reach a scale of $10 trillion by 2030, but is currently only in the tens of billions.
4. Analysis of ICM's Advantages and Disadvantages
1. Advantages
Efficient and Low Cost: ICM significantly reduces transaction costs through disintermediation. For example, traditional IPO costs may account for 7%-10% of the financing amount, while ICO/IDO costs are usually below 2%.
Global Accessibility: ICM allows global investors to participate, particularly benefiting SMEs and individual investors in emerging markets.
Innovation Driven: ICM has spawned a variety of new financial instruments (such as liquidity mining, flash loans), driving the iteration of financial models.
Transparency and Traceability: The public ledger of blockchain ensures the transparency and auditability of transactions, enhancing trust.
2. Disadvantages
Regulatory Uncertainty: The decentralized nature of ICM places it in a regulatory gray area, potentially facing policy crackdowns. For example, China's comprehensive ban on ICOs in 2021 demonstrates the reality of regulatory risks.
Technical Risks: Smart contract vulnerabilities and frequent hacking incidents, with over $2 billion stolen from DeFi protocols in 2023 (Chainalysis data).
Market Volatility: ICM is highly dependent on the cryptocurrency market, and severe price fluctuations may undermine investor confidence.
Trust Issues: Despite the transparency of blockchain technology, the anonymity of project parties and information asymmetry may still lead to fraud risks.
5. Conclusion and Outlook
Comprehensive analysis suggests that ICM is expected to become a hotspot in the financial market in the next three to five years, particularly in the fields of DeFi, digital asset financing, and global inclusive finance. Technological advancements, institutional participation, and improvements in the regulatory environment provide strong momentum for its growth. However, compared to RWA, ICM is more suitable for investors with a high-risk appetite and innovative enterprises, while RWA attracts traditional institutions seeking stability and compliance. The two are not in a competitive relationship but are complementary: ICM drives innovation in financial models, while RWA injects new liquidity into traditional assets.
In the future, the success of ICM will depend on the following key factors: first, the improvement of the regulatory framework; second, the enhancement of technical security; and third, the deep integration with traditional finance. The optimistic attitudes of well-known scholars and industry leaders such as Vitalik Buterin and Cathie Wood indicate that the potential of ICM is widely recognized, but its development path still needs to carefully balance innovation and risk. For investors and practitioners, understanding the differences between ICM and RWA, and choosing the appropriate track based on their own needs, will be key to seizing opportunities in the wave of digital finance. (Copyright infringement will be pursued)
