The Web3 community in 2025 is not lacking in 'hot opportunities'. Following DeFi, NFT, the metaverse, and memes, RWA has suddenly become the top trend—full of slogans like 'asset on-chain reconstructing the financial system' and 'trillion-dollar market new blue ocean', with various RWA industry associations, summits, alliances, and forums proliferating like cancer cells, outnumbering real, operational RWA projects by dozens of times. Even the old man selling pancakes at the village entrance has heard that 'putting houses on-chain can sell globally', but sorry, today we must pour cold water on that idea: when you shout 'RWA assets on-chain', you might not even know what you're talking about.

First, break the first myth: RWA is not a 'new species', it's just 'old money with a new accounting book'.

Don't be fooled by the packaging of 'Web3 innovation'. The funds you buy on Alipay, the A-shares in your brokerage app, and the bonds in your bank app are essentially all 'tokenization of real assets'—stocks are digital certificates of equity, funds are certificates of asset portfolios, bonds are electronic records of debt. The difference lies only in: traditional financial tokens exist in centralized databases of banks and brokerages, while RWA tokens exist in decentralized ledgers on the blockchain. It's like switching the ledger from Excel to Google Docs; the core remains accounting, just the method of accounting has changed.

But now many people speak of this as if 'humanity has discovered fire for the first time': 'Wow! Blockchain allows assets to go on-chain!' Please, stock tokenization has been around since the 17th century, it was just done with paper certificates back then, later evolving into electronic data. RWA is essentially 'tokenization 2.0', moving certificates from centralized databases onto the chain, adding features of immutability and decentralized verification, but the underlying logic is still 'using digital certificates to represent rights'.

To put it bluntly: if you buy Tencent's stock, the brokerage app shows you holding 100 shares, these 100 shares are the tokens of Tencent's equity, existing in the brokerage's database; if Tencent issues RWA equity, you receive 100 Tokens on the blockchain, which essentially still represent these 100 shares of equity, the difference being that these Tokens can circulate on-chain, while traditional stocks can only be transferred at the exchange. So don't mythologize RWA; it doesn't 'create new assets', it merely 'gives old assets a cooler ledger'.

90% of people get the focus wrong: the essence of RWA is not 'data on-chain', nor is it 'assets on-chain', but 'rights certificates on-chain'.

Now, the streets are filled with the nonsense of 'data on-chain = assets on-chain'. Some say: 'I scanned the property deed into a PDF and put it on-chain, now the house is RWA!' Wake up, even if you upload 100 photos of the property deed to the blockchain, the house is still registered in the housing authority's system, and has nothing to do with the on-chain data. Data is just information, while the essence of an asset is 'rights'—you own the house not because you have a photo of the property deed, but because your name is written in the housing authority's registry, which is the right granted by law.

Some boast: 'Our Token maps to real assets 1:1, holding the Token equals owning the asset!' What's the difference from children playing house? If you draw 'one million Tokens' representing the convenience store downstairs, does that mean the convenience store belongs to you? Any 'mapping' without legal endorsement is just a castle in the air. The core of RWA is not to move the assets themselves on-chain (houses can't be moved, equity can't be moved), but to tokenize the 'rights certificate proving you own the asset'—for example, converting legally recognized rights certificates like stocks, bonds, and property deeds into on-chain Tokens.

Key point: The essence of an asset is 'rights', and the carrier of rights is 'legally recognized certificates'. Movable property relies on contracts and invoices, immovable property relies on property certificates, equity relies on shareholder registers, and debt relies on debt contracts. What RWA needs to do is repackage these 'legally protected certificates' using blockchain technology to make circulation of certificates more efficient and transparent, but the premise is: rights under a legal framework first, then on-chain Tokens. If you skip the law and talk about 'assets on-chain', you're just being a rogue.

The blockchain community loves to say 'code is law', but in the field of RWA, law is the father of code. You fully own Bitcoin if you hold the private key because the 'rights' of Bitcoin are entirely defined by blockchain code; however, RWA Tokens represent real assets, and the rights associated with real assets are determined by the laws of various countries. For example, if you purchase an RWA Token representing a U.S. property, and the developer runs away, you cannot take your private key to a U.S. court to sue—first, the U.S. court will look at whether this Token is recognized as a legitimate rights certificate under local law; whether you qualify as a 'qualified investor' according to U.S. regulations; and whether your purchasing process complies with U.S. securities laws.

Here's a more painful example: someone domestically put a house in Beijing 'on-chain', issuing 1000 Tokens, each representing 0.1% ownership.

But according to Chinese law, property ownership changes must be registered at the real estate registration center; the flow of Tokens on-chain does not count. If one day the property owner sells the house and the Token holder seeks legal protection in court, the court will only look at the property deed, not the on-chain records—because the law does not recognize this 'on-chain rights certificate' as legitimate.

Therefore, the core of RWA is not a technical problem, but a legal construct problem: how to make on-chain Tokens recognized as legitimate rights certificates within the real legal system? This requires addressing three key issues:

1. Rights anchoring: Tokens must correspond to rights protected by law in reality (such as equity, debt, property), not just air.

2. Compliance framework: The issuance process must comply with the regulatory requirements of the target market (such as SEC regulations in the U.S., financial regulations in Hong Kong, China), otherwise it is illegal issuance of securities.

3. Dispute Resolution: When disputes arise regarding the rights represented by the Token, can the legal system recognize on-chain records as evidence and protect the rights of the holders?

Those who talk about RWA without legal considerations are either clueless amateurs or deceitful fraudsters—after all, the slogan of 'decentralization, global circulation' sounds much better than 'first getting the regulations in each country sorted'.

RWA is essentially a financial product; don't be blinded by 'decentralization'.

Many people hype RWA as 'the magical tool that disrupts finance', saying it allows ordinary people to invest in overseas real estate, top private equity, and artworks. But the truth is: RWA is just tokenization of financial tools, and finance inherently carries regional and regulatory shackles.

First, all RWA are 'financial products'. Whether it's property-backed bonds, corporate receivables, or fund shares, they are essentially tools for 'making money with money' and must comply with the core logic of financial regulation: protecting investors, preventing risks, and maintaining market stability. For instance, the U.S. requires that investors purchasing RWA-type securities must be 'qualified investors', while China stipulates that financial products must be approved and cannot illegally raise funds from the public. Projects claiming 'anyone can buy RWA' are either engaging in illegal fundraising or playing a dangerous game of 'regulatory arbitrage'.

Secondly, the regional nature of finance makes it difficult for RWA to 'circulate globally'. A real estate RWA Token issued in the United States may be viewed as 'foreign securities' in China, and cannot be sold to Chinese investors without approval; similarly, a corporate debt RWA from China may be unable to be purchased by U.S. investors due to regulatory restrictions. Even if global circulation is technically achieved, legal recognition remains a significant obstacle—can you imagine a Chinese investor holding an on-chain Token suing a defaulting U.S. company in a U.S. court? Not to mention the costs of cross-border litigation, whether 'the U.S. court recognizes the legality of your token ownership' is a major issue.

More realistically, financial risks do not disappear just because of 'going on-chain'. Credit risk, market risk, and liquidity risk present in traditional finance also exist in RWA, and may even become more hidden due to 'decentralization'. For example, if an RWA project issues Tokens backed by fraudulent assets, the immutability of the blockchain may actually make the scam harder to uncover—after all, the data is real, but the assets are fake.

Beware of the 'RWA bubble': 99% of the discussions are just hot air, the difficulty of implementation lies in the 'last mile'.

The current RWA ecosystem is quite reminiscent of the ICO boom in 2017: various white papers flying everywhere, the number of intermediaries outnumbering the landing cases, and industry associations outnumbering project parties. But very few can present compliant, operable RWA cases. Why? Because the implementation of RWA needs to cross three 'ghost gates':

This is the toughest hurdle. For example, in the U.S., the SEC views most RWA as 'securities', which must comply with the Securities Act, complete registration or obtain exemption, otherwise it's illegal. This means project parties need to hire top legal teams, spending millions on legal documents, and go through regulatory scrutiny. Domestically, the requirements are even stricter; any behavior involving 'asset securitization' or 'financial product issuance' must be approved by financial regulatory authorities, and unauthorized issuance may involve illegal public fundraising.

Second hurdle: Asset penetration.

For RWA to gain investor trust, it must solve the 'asset authenticity' problem. For example, does an RWA for real estate have on-chain Tokens that truly correspond to a real property? Is the ownership clear? Is there any collateral? This requires professional asset assessment, due diligence, and legal confirmation, rather than relying on 'smart contracts automatically executing' as stated in the white paper. Many projects claim 'going on-chain means rights confirmation', but in reality, property rights confirmation requires a lot of legwork; the blockchain merely records the result and cannot replace the offline legal processes.

Third hurdle: Investor protection.

Traditional finance has a mature investor protection mechanism, such as regulation by the securities authority, bank custodianship, risk warnings, etc. But what about RWA? Under a decentralized structure, who regulates the project parties? Who ensures investors' rights to information and redemption? If Token prices plummet, can investors redeem like they would with a fund? If the underlying assets are fraudulent, do investors have a channel for rights protection? Until these issues are resolved, RWA will always be just a 'castle in the air'.

Ironically, many RWA projects now play tricks to evade regulation: for example, placing the issuing entity in the Cayman Islands, using the guise of a 'Decentralized Autonomous Organization (DAO)' to evade legal responsibility, claiming to be 'not subject to any national regulation'. But the reality is, as long as you target investors from specific countries, you must comply with local laws—DAO is not a lawless land, and Tokens are not 'get out of jail free cards'.

The future of RWA: Tear off the 'myth' label and return to the essence of 'tools'.

Saying all these 'cold water' statements is not to deny the value of RWA. On the contrary, RWA indeed has huge potential: it can improve asset turnover efficiency, reduce financing costs, and provide liquidity for niche assets such as shares of artworks, real estate investment trusts (REITs), and corporate receivables. But the premise is: remove the filter of 'blockchain is omnipotent' and honestly address the core issues of law, regulation, and compliance.

The future of RWA should be like this:

  • Compliance first: issue under a specific legal framework, such as the U.S. Reg D private placement exemption or China's asset securitization pilot, first become 'legal financial instruments', then discuss 'on-chain innovation'.

  • Technology assistance: Blockchain is used to improve the efficiency of certificate circulation and enhance transparency, rather than to disrupt the legal system. For instance, using smart contracts to automatically execute dividends and real-time regulatory compliance checks with on-chain data.

  • Focus on vertical scenarios: starting with standardized assets, such as funds, bonds, commercial paper, and REITs, these assets have clear legal relationships and mature regulatory frameworks, making them easier to implement. Rather than jumping straight into high complexity and high regulatory risk areas like 'real estate fragmentation' and 'artwork splitting'.

Most importantly, investors need to be clear-headed: RWA is not a magical tool for passive earning, but a more efficient financial instrument that still requires risk assessment, legal review, and compliant investment. Projects wrapped in 'asset on-chain, global circulation' are either clueless amateurs or fraudulent schemes looking to exploit; the real RWA players are quietly negotiating with regulatory bodies in various countries, not shouting slogans on social media.

Conclusion: Don't be confused by 'going on-chain', see the essence of RWA clearly.

Returning to the initial question: when we discuss RWA assets going on-chain, what exactly are we talking about? It is not the technical gimmick of data going on-chain, nor the utopia of global asset circulation, but a compliance revolution of 'reconstructing the rights certificate system with blockchain technology'. The core of this revolution is not technology, but law; not decentralization, but regulatory compatibility; not creating new assets, but making old assets circulate more efficiently.

Those who talk about RWA without legal considerations are like building skyscrapers on the beach; those who ignore regulation while discussing global circulation are like carrying torches through a gunpowder magazine. The real value of RWA lies in the compliance documents of each jurisdiction, in the rights mapping of assets and Tokens, and in the specific terms of investor protection—not in the pretty words like 'disrupt', 'reconstruct', or 'trillion-dollar markets' found in white papers.

Next time someone tells you 'RWA asset on-chain changes the world', you might as well ask them three questions:

1. In which country's legal system is your Token recognized as a legitimate rights certificate?

2. How do you prove that the on-chain Token truly corresponds to real-world assets, rather than being air?

3. If the asset defaults, what legal channels do you have as an investor to protect your rights?

The answer lies in these three questions. The story of RWA has just begun, but only by tearing off the packaging of 'myth' can we see the real value—or the bubble.



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Author: Shao Jiadian, Liu Honglin.