Author: Zhang Feng
(1) RWA may present a three-stage evolution pattern
The financial, technological, and industrial attributes of RWA successively become the core driving force of each stage, pushing the dominance from the capital side to the technology side and then to the demand side, with a clear path; meanwhile, each stage has systemic differences in asset forms, technical architecture, compliance frameworks, and user rights. Therefore, we believe that from the development path perspective, RWA projects and ecosystems will undergo a clear three-stage evolution—from the current investment institution-dominated stage, transitioning to the project party-dominated stage, and finally moving towards the user party-dominated stage.
The financial, technological, and industrial trinary attributes of RWA jointly determine the three-stage development path of 'investment institutions - project parties - user parties'.
Initially, the financial attributes are the strongest. RWA needs compliant pricing, rating, and liquidity, with investment institutions leveraging funding and licensing advantages to complete asset tokenization and market-making first, forming market benchmarks.
Subsequently, technical attributes become prominent. Project parties gradually have the motivation for proactive technological transformation, mastering infrastructure such as chain reform, oracles, and programmable contracts, enabling more physical assets to be efficiently tokenized and embedded in DeFi, reducing issuance costs and expanding supply.
Finally, the release of industrial momentum. When the scale of on-chain assets and yields is sufficiently large and the barriers to entry are low enough, end users can directly hold, trade, or mortgage RWA to obtain returns, achieving 'everyone is an asset operator'.
(2) Investment Institution Dominated Stage
The current RWA ecosystem is dominated by traditional financial institutions and professional investment institutions, characterized by high thresholds, strong regulation, and heavy reliance on credit, with the core issue being to solve the liquidity dilemma of non-standard assets and credit transmission problems.
(1) Asset Characteristics: Mainly High Liquidity Financial Assets
Private credit occupies a dominant position. Globally, it is at a scale of $10 billion, mainly corporate loans issued by platforms like Figure and Tradable, with an average annual interest rate of 9.74%, serving small and medium-sized enterprises that cannot obtain traditional bank financing.
Tokenization of government bonds is rapidly rising. Represented by BlackRock's BUIDL fund, which has a scale of $2.41 billion, underpinned by a portfolio of US government bonds, supporting redemptions in USD or USDC stablecoin, becoming the 'no-risk yield anchor' of the DeFi ecosystem.
Initial attempts with non-standard assets. For example, Hong Kong Delin Holdings tokenized Central business properties (valued at HKD 280 million), but requires professional investor qualifications and has limited liquidity.
(2) Technical Characteristics: Coexistence of Alliance Chains and Centralized Custody
Alliance chains dominate asset tokenization. For example, R3 Corda and Hyperledger Fabric, including domestic AntChain, are the preferred choice for financial institutions due to controllable node access and compliance with KYC requirements.
Off-chain assets heavily rely on oracles. Physical gold (PAXG) and real estate require licensed institutions for verification, with data mapped to on-chain tokens through Oracle pricing.
The functionality of smart contracts is single. Focused on basic issuance and dividends, such as BUIDL's automatic interest calculation feature, complex governance still relies on centralized SPVs.
(3) Compliance Requirements: Licensing and Localized Regulation
Hong Kong is promoting the sandbox system. The RWA regulatory sandbox starting in 2024 is continuously being improved, while the (stablecoin regulations), effective in August 2025, require stablecoin issuers to be licensed, and security tokens need SFC case-by-case approval.
The United States clearly defines securities attributes. The SEC includes most RWAs in the securities framework, which must comply with Reg D/S exemption clauses, with financing limits constrained by Regulation CF.
High cross-border compliance costs. Cross-border projects must simultaneously meet the requirements of multiple jurisdictions, such as Hong Kong (Securities and Futures Ordinance) and Cayman SPV structures, which takes a long time.
(4) User Rights: Priority for Professional Investors
High thresholds exclude retail investors. For example, most RWA projects only distribute tokens to 'professional investors', requiring KYC certification and a proof of assets of HKD 1 million.
Yield rights are superior to governance rights. BUIDL holders can earn interest, but have no rights to participate in asset strategy adjustments.
Exits depend on centralized redemption. The Securitize platform requires T+2 settlement for USD redemptions, limiting liquidity.
(3) Project Party Dominated Stage
As technology matures and regulatory sandboxes are promoted, physical enterprises and technology platforms gradually see the advantages of RWA, starting to increase technological content, build internal and external trust, develop an open ecosystem, and become core drivers, shifting their goals towards revitalizing their asset liquidity and expanding financing channels.
(1) Asset Characteristics: Large-scale Tokenization of Physical Assets
Non-standard assets are beginning to become mainstream. In addition to supply chain finance (accounts receivable, orders) and new energy assets (solar power plants), high-value assets like intellectual property, cultural creativity, and others are entering the market.
Fragmented investment is becoming widespread. The threshold for real estate tokenization has been reduced to $50 per share, with projects like RealT in the US supporting retail investors in real estate and collecting rent in stablecoins.
Stablecoins have become pricing hubs. Platforms like RWA Group support multi-chain stablecoin (USD/RMB/HKD) settlement, facilitating cross-border payments.
(2) Technical Characteristics: Public Chain Layer 2 and Cross-Chain Breakthroughs
Layer 2 essentially solves performance bottlenecks. For instance, future low gas fee chains like Polygon support 24/7 trading, and settlement periods are shortened from T+2 to seconds, with efficiency improved by 90%.
Dynamic compliance is beginning to be embedded in smart contracts. For example, the Rtree platform verifies investor qualifications through zero-knowledge proofs and automatically implements KYC rules across different jurisdictions.
Off-chain assets - on-chain tokens begin to anchor each other bidirectionally. For example, the PAXG gold token is pegged to physical gold in LBMA vaults at a 1:1 ratio, with IoT sensors monitoring asset status in real time.
(3) Compliance Requirements: Regulatory Framework Mutual Recognition and Sandbox Innovation
The Hong Kong LEAP framework is basically implemented. It promotes mutual recognition of securities and commodity tokens, allowing cross-border trading.
The EU MiCA regulations are basically integrated. STOs (Security Token Offerings) can circulate in member countries, with Robinhood's European stock tokens subject to MiFID II regulation.
The sandbox further promotes compliance testing. The Hong Kong Ensemble sandbox tests hybrid models like art NFT + revenue sharing.
(4) User Rights: Governance Participation Sprouts
DAO governance is beginning to operate initially. Platforms are starting to create dedicated DAOs for RWA, where token holders can vote to decide asset disposal strategies.
On-chain yields begin to be distributed in real-time. Rent and interest are automatically distributed via smart contracts, avoiding delays in traditional finance.
Liquidity mechanisms are gradually improving. Compliance exchanges are beginning to be accessed, and some DeFi pools are opening up to retail investors to provide liquidity.
(4) User Dominated Stage
When the underlying infrastructure of RWA is complete, data utilization capabilities and efficiency will significantly improve, with individual users and communities becoming the ecological center, achieving the assetization of user data rights and decentralized governance.
(1) Asset Characteristics: Tokenization of Personal Assets and Data Credentials
Micro asset certificates are beginning to go on-chain. Personal carbon credits, social media data, and creative copyrights are circulating on-chain.
User-generated RWA (UG-RWA) is becoming popular. For instance, cross-border trade certificates are tokenized + DeFi lending, allowing individuals to issue assets based on order revenue rights.
Cross-chain global liquidity pools are gradually forming. Tokenized gold, real estate, and government bonds can be exchanged across chains, with friction costs approaching zero.
(2) Technical Characteristics: Quantum Security and AI-Driven DAO
Quantum encryption technology is beginning to ensure security. National Fortune Quantum and others are deploying quantum random number wallets to defend against quantum computing attacks.
AI oracle dynamic pricing is beginning to operate. Replacing traditional evaluation institutions, it analyzes the value fluctuations of non-standard assets in real time.
Fully automated governance engine operation. DAO proposals, voting, and execution are completed on-chain, realizing 'code is law' like the Matrix system.
(3) Compliance Requirements: Global Unified Standards
RWA identity passports are gradually maturing. On-chain KYC certificates are universally applicable across platforms, meeting the requirements of multiple legal jurisdictions.
Automatic tax compliance operation. Smart contracts automatically deduct capital gains tax based on user nationality.
(4) User Rights: Data Sovereignty and Governance Core
Data yield rights have been confirmed. After user behavior data is tokenized, it can be traded or mortgaged for loans.
Decentralized governance is beginning to mature. Voting weight of token holders determines asset strategies, such as whether to issue more tokens, liquidate, or collaborate across sectors.
User-led asset creation is beginning to operate. Individuals can issue 'order revenue right certificates', forming a UG-RWA (User Generated Real World Asset) market.
Table: Comparison of RWA Three-Stage Development Characteristics
(5) Current Positioning and Future Challenges
Currently, the global RWA ecosystem is clearly at the end of the investment institution-dominated stage, showing signs of transitioning to the project party-dominated stage:
Institutional assets still dominate, with private credit + government bonds accounting for 87%, and traditional giants like BlackRock and Figure controlling pricing power.
Technological infrastructure needs to mature. Mature and reliable compliant blockchain issuance infrastructure still needs refinement, and related technical agreements need further enrichment. The Hong Kong Ensemble sandbox may play a corresponding demonstrative role in the industry.
The regulatory system still needs to be improved. Hong Kong (stablecoin regulations), the United States (GENIUS Act), and the EU MiCA form the basic framework, but the system is not yet established, and cross-border mutual recognition is still lacking.
However, a leap to the next stage requires breaking through three bottlenecks:
Technical-compliance closed loop: The legal validity of oracle data requires judicial confirmation, and zero-knowledge proofs need to comply with GDPR.
Insufficient liquidity depth: Currently, most RWA relies on over-the-counter trading, and the RWA trading market has not yet reached its deserved prosperity.
Rebalancing of user rights: shifting from 'professional investor privileges' to governance rights accessible to retail investors, requiring a reconstruction of the DAO legal entity status.
Of course, the above is a rough classification of stages. In reality, representative features from the second and third stages may also begin to be realized in some highly digitized projects of the first stage, and there will still be institution-driven projects in the second and third stages, so this is not contradictory. It is just a matter of which type of project dominates in a given stage.