Original title: "How to upgrade the tokenization of RWA exchange to corporate crypto financing?"

Original author: Ye Kai (WeChat/Twitter: YekaiMeta)

RWA is a tokenization of real-world assets. When talking about RWA, we must talk about tokenization. However, if we emphasize tokenization too much, we will easily overlook that the core essence of RWA is corporate financing and institutional markets, while the core of the tokenization of RWA exchange is crypto corporate finance.

Many friends come to consult RWA and ask me whether this asset can be used to launch an RWA project? Or which asset is suitable for RWA?

The elements of RWA are not only the asset side, but also various elements such as the capital side, market participants, liquidity, etc. In addition, as for the same asset, it is different in your hands, in the hands of institutional funds, in the hands of industrial trade and core enterprises, and in the hands of arbitrage fund operators, and the feasibility of RWA issuance is also different.

How do you view the Tokenization of RWA?

In licensed exchanges or RWA exchanges, the term Tokenization can easily mislead the team or the market.

The current conservative route of RWA is to first develop financial products and then tokenize them, which is itself a compromise in the early stage. Tokenization is a means and method, but not the essence. What should the essence be?

As discussed at the beginning, the core essence of RWA is corporate financing and institutional markets, while the core of RWA's Tokenization is crypto financing. If it is not called Tokenization, it cannot reflect the newness of Web3.0, but the internal team needs to have a clear understanding and positioning:

For example, if it is called Enterprise Financing Business Group, the essential purpose is enterprise financing, which is nothing more than issuing ABS bonds but exchanging RWA tokens. In fact, if we look at the department structure of securities companies in traditional finance, the departments of bonds and IPO investment banks are all under the Enterprise Financing Business Group;

For example, if it is called Industrial Investment Banking Business Group, the essential purpose is industrial trade and supply chain finance as well as industrial digital financial derivatives. This is more about expanding from corporate financing to the integration of resources, funds and capital of the industrial chain where the enterprise is the core enterprise;

For example, the Investment and Financial Management Business Group is essentially aimed at RWA financial products such as crypto asset investment and financial management, fixed income, and insurance, with standardized Crypto investment and financial management products for PI investors and retail investors.

Is it a bit rustic? Many people will also think it is a step backward?

RWA products can be very grand and Web3.0 to the outside world, but if you are an RWA exchange, you can't be indifferent to the world with the Web3.0 shelf. No matter how high the flag of Web3.0 is raised, more traditional enterprises and old money must be guided to join. As for the internal corporate financing business group, it is necessary to take advantage of the momentum of big brands, bend down or pull down down-to-earth partners, build channels, conference marketing, and develop new digital investment banks and agents, so as to grasp the anxiety of entrepreneurs and the rigid demand for corporate financing.

Only by making money from the new golden shovel of corporate financing first, and thus expanding the number of members and asset pool of the RWA exchange. When more and more middle-level enterprises in an industry come in, how can the leading enterprises not come? When traditional IPOs are tightened and it is difficult to go public, will the issuance of RWA become the digital IPO of the industry?

And such an RWA ecosystem is equivalent to a new crypto ecosystem for corporate financing. It not only requires RWA exchanges, but also RWA's digital investment banks, digital funds, and digital brokers and market makers. We can't expect licensed exchanges to do everything, and it's not very realistic. This requires professional division of labor.

The development of the RWA market must require professional institutions, especially professional investment advisory institutions and investment research institutions, as consultants and financing consultants for enterprises to conduct crypto financing. Regarding the current anxiety of enterprises, one is the rigid demand for corporate financing, and the other is the exploration of overseas markets, which can be gradually met by designing appropriate RWA.

The RWA market also needs very down-to-earth channels and agents, just like the pan sub-projects in the currency circle, conference marketing, community marketing, etc. The corporate customer market also needs such a dragnet, but it is more of a consulting marketing, and KOL or agent nodes are more professional institutions and FA consultants.

Corporate financing and encryption go in opposite directions

From the perspective of corporate financing, we can look at the different directions of corporate financing products. If we refer to the corporate financing business group structure of securities companies, it will be divided into debt, IPO and other departments. Similarly, the tokenization direction of corporate financing can also be divided into digital debt, digital IPO, digital REIT and non-equity and non-debt innovative products.

- Digital bonds, generally corporate credit bonds, or issued fixed-income bonds, more complex ones are asset-backed securities (ABS);

- Digital IPO, tokenized equity financing or equity financing, ITO with a code similar to a stock code, equivalent to the digital stock of the RWA Exchange, with simultaneous on-chain information disclosure and on-chain auditing;

- Non-equity and non-debt innovations, such as Diguantong’s cash distribution, can be designed as a token cash flow distribution model on the chain combined with smart contracts;

- Digital REIT, traditional REIT is a publicly held trust investment fund (Trust Fund), while RWA corresponds to digital REIT, a Crypto Fund that combines DAO and smart contracts.

The most difficult part is how Crypto Corporate Finance can help companies with high-quality real-world assets achieve greater decentralization and native tokenization? Greater Web3.0?

From the perspective of industrial investment banks, corporate financing should bring upstream and downstream industry chain resources and industrial transaction cash flows to tokenization. It takes time for an industry to accept and carry out tokenization. From the experience of industrial digital transformation, it is often the middle-level companies that are difficult to surpass by traditional means and will be swallowed up at any time. They have the motivation to accept tokenization and try. When the middle-level companies come in to drive changes in the industry, the head companies and core companies will begin to understand and enter, and slowly drive the upstream and downstream industry chains to enter. Of course, it is not ruled out that a relatively concentrated or niche emerging material or resource industry will be in place under the promotion of core companies.

Compared with a certain enterprise or asset package held, an industry is completely different. In the industry, there are procurement needs, daily industrial trade, stock assets and standardized warehouses or warehouse receipts, corporate credit and bank credit, transaction volume and transaction flow, and mature financial and capital institutions such as supply chain finance, commercial bills, leverage, futures, and spot arbitrage.

If the middle can lead the head and the community can lead the long tail, and based on the 28 principle, an industry can gradually realize RWA tokenization and RWA transactions, this energy is still huge.

From a capital perspective, corporate financing cannot just look at assets, but must talk about capital.

In the traditional financial market, corporate financing bonds, including IPOs, all require under the table negotiations. Before issuing RWA, the underwriter, financing rhythm, and share period must be negotiated. It is impossible for funds to come as soon as RWA is issued.

When it comes to funds, we must pay attention to the investment trends of global funds, the multipolarization trend, and the regional monetary system. In the past two years, global funds focused on short-term cash flow. This year, with the expectation of interest rate cuts and inflation, the focus of funds may change again. High-quality fixed-income bonds and inflation-resistant high-quality real estate, high-tech, pharmaceuticals and biology, etc. will become investment trends. The multipolarization trend formed after the decoupling of China and the United States, and the regional settlement and clearing system will have an impact on funds, which will further affect the issuance of RWA products that need to be invested in.

It seems that China-friendly Middle Eastern funds will be the first choice, but due to different economic structures, the Middle Eastern funds that need to be reinvested may not be completely matched; and although European and American funds have withdrawn their capital due to the decoupling of China and the United States, they have recently regained momentum, and some potential funds may find a jump point to turn around and then come back to invest in high-quality Chinese assets. Therefore, RWA must follow the Goldilocks principle, and the best one is the best.

Another example is the drip irrigation model. If we only look at its asset and capital structure, combined with the trend of global funds focusing on short-term returns of cash cows in the past two years, the asset targets are mainly those cash cow chain store assets. Financial products with daily cash distribution are designed in the form of so-called non-equity and non-debt. In terms of structure, the guiding fund Fund is used to connect with various overseas funds to realize the investment and short-term return distribution of cash cow chain brand store assets in the mainland.

From the asset perspective, as mentioned above, look at assets from the perspective of funds and invest in what they like. This year, global funds, affected by the expectation of interest rate cuts and inflation, may shift from cash cows to high-quality bonds such as US bonds and high-credit quality corporate bonds, high-tech stock indexes, especially AI computing power and other sectors, stocks and private equity in new energy and pharmaceutical and biological sectors, special operating cash flow real estate, and cultural film and television related hot assets.

From the channel perspective, RWA exchanges need to learn the funds, channels and organizational forms of old money. This is actually simple. The financial veterans in Zhonghuan are very skilled. It is nothing more than guiding and inducing them to quickly integrate into Web3.0, and then further thinking about how to achieve RWA resource integration.

RWA ecological market, for Zhonghuan, the professional service institutions of traditional finance are already very mature, but they cannot be copied and applied rigidly, but they need to study the most suitable innovative mechanisms such as Web3.0 and RWA's corporate financing professional services, institutional markets and information disclosure.

Traditional financial investment research, stock reviews, sales meetings and roadshows, compared with Web3.0's Alpha reports, communities, spaces and DAOs, learn from each other. After all, the effect of educating and guiding traditional entrepreneurs and institutional clients in the way of Web3.0 can be imagined. The promotion and education of RWA digital investment banks and securities companies, as well as RWA project roadshows, must rely on the existing mature channel model, and at the same time, how to use new forms of financing and digital IPOs in the new era.

RWA exchanges need a large number of ecological market partners to jointly promote the maturity of the RWA market. This will also promote a large number of RWA media and investment research promotion, RWA stock critics, new financial TV and new media programs, including a large number of related professional courses such as business schools, training courses and crypto investment boutique courses, to educate investors (PI and retail investors) on how to use new forms of crypto investment in the new era, such as Bitcoin ETF, such as RWA, etc. New wine in old bottles, it is nothing more than changing the product from stock to digital asset product with new RWA code.

Through the above discussion, RWA exchange and surrounding ecological market may have a more open and corporate finance understanding of Tokenization.

This article is from a contribution and does not represent the views of BlockBeats.