Observations and personal opinions from BonnaZhu of Nothing Research Partner; the following content does not constitute any investment advice.

Chaos is inevitable.

However, using a heavy-handed approach to eliminate RWA is clearly overkill. Just because one track and narrative hasn't succeeded in the past doesn't mean it will never succeed. The key is who steps in to do it and the timing.

Times have changed; the GENIUS Act, the SEC's tokenization framework expectations, and the deregulation in the U.S. clearly indicate that the coming years will be an era of great integration between off-chain and on-chain, TradFi and DeFi.

But RWA is not something everyone can handle. Simply packaging an off-chain asset and bringing it on-chain for financing or selling is entirely different from BlackRock putting U.S. Treasuries and stocks on-chain to allow more people to access it.

The core theme of RWA is the latter; it is essentially an extension of the dollar's will, aimed at reaching more users and selling dollar assets to places that were previously inaccessible. RWA is a part of the dollar asset distribution system, functioning like capillaries.

This is why high-quality assets should come in, and there is a greater willingness to participate; the better the asset, the better its liquidity. On-chain, it can leverage existing depth to buy and distribute, making it easier to open new markets. It’s not about whether many people understand what high-quality assets are willing to come in; if that were the case, then what would it mean for stablecoins and tokenized U.S. Treasuries to succeed? Aren't they among the highest quality assets?

The same goes for U.S. Treasuries, and later for U.S. stocks and indices.

So in my view, if a RWA project is not focused on promoting dollar assets, but instead is trying to bring some peripheral assets on-chain, even hoping that going on-chain can make a certain asset more liquid, and trying to rely on on-chain to provide price discovery and liquidity for packaged assets, I’m sorry, the thinking is wrong, and it will certainly be hard to succeed.

Things that have no demand off-chain will not be wanted on-chain either.

However, the era of great integration is not just about the story of going from off-chain to on-chain (like Ondo Finance and Plume Network), but also the process of going from on-chain to off-chain. There are actually many high-quality native yields in this market that can be shared and break boundaries, and the teams creating these native yields are also working hard to package them and sell them to the traditional market in a compliant manner.

What I have observed includes Pendle's Citadel plan and Ethena Labs, which clearly mentioned establishing SPVs to allow traditional institutions to compliantly access USDe yields.

The future is far from as pessimistic as imagined. Trust the Process.