Recently, the hottest term in the crypto world is not BTC, nor ETH, but RWA (Real World Asset Tokenization). Data shows that this year, the on-chain value of RWA has exceeded 30 billion USD, with U.S. Treasury bonds and private credit being the main players. Giants like BlackRock, JPMorgan, and Apollo are all frantically positioning themselves. Many retail investors ask, 'What is RWA? Can ordinary people participate? Is it a scam?' Today, I will break down RWA in the simplest language and share three low-risk opportunities for ordinary people to participate.
First, let's understand RWA: it is the tokenization of real-world assets (like Treasury bonds, real estate, and credit) and trading them on the blockchain. Its advantages are clear: it is divisible, has 24/7 liquidity, and cross-chain interoperability. For example, a 10000000000 U.S. Treasury bond, which could only be purchased by large institutions in the past, can now allow ordinary people to participate with just 100 USD after tokenization, and they can buy and sell at any time. This is also why giants are positioning themselves—RWA bridges traditional finance and the crypto market, making it key to the mainstreaming of crypto.
The hottest in RWA is the tokenization of U.S. Treasury bonds. BlackRock's BUIDL fund represents this, as it corresponds 1:1 to U.S. Treasury bonds and distributes interest daily, with a total locked amount exceeding $2 billion. I have also allocated a portion to BUIDL, which offers higher returns than holding stablecoins and is safer than crypto assets. Besides BUIDL, there are also Paxos' USDY and Coinbase's USDP, which are compliant stablecoins backed by sufficient reserves.
Tokenization of private credit is the next big opportunity. JPMorgan and Apollo are tokenizing private credit assets and bringing them to the DeFi market. Private credit loans are given to businesses, providing higher returns than treasury bonds while keeping risks controllable. Ordinary people can participate in relevant DeFi protocols to earn a share of loan interest. Currently, these types of protocols are still in the early stages, and I am focusing on Maple Finance and Centrifuge, both of which are experiencing rapid TVL growth and have very professional teams.
Many people are concerned about the compliance risks of RWA. In fact, there is no need to worry; the U.S. (GENIUS Act) has established a regulatory framework for stablecoins related to RWA, requiring 1:1 reserve support and regular disclosure of reserve composition. The EU's MiCA regulation has also set clear requirements for RWA issuance. Although the compliance costs are high, they also filter out inferior projects. For retail investors, choosing RWA products issued by compliant institutions carries very low risk.
Finally sharing my RWA layout strategy: 60% allocation to treasury tokenized products (BUIDL), 30% participation in private credit DeFi protocols (Maple Finance), and 10% allocation to RWA infrastructure projects (Chainlink). Chainlink's CCIP protocol is the core of RWA cross-chain, and as RWA explodes, its value will become increasingly prominent.
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