2024 Public Blockchain On-Chain Real World Asset (RWA) Annual Report: Market Deconstruction and Paradigm Shift

Original Title: 2024 RWA MARKET REPORT The Rise of a New Financial Paradigm

Original Source: RealtyX DAO Chinese

In 2024, the public chain Real World Asset (RWA) sector witnessed explosive growth, heralding the rise of a new financial paradigm. Fueled by a triple engine of institutional rush, continuous technological breakthroughs, and gradually clarified regulations, RWAs are accelerating from concept validation to large-scale application. Innovative models such as asset tokenization, cross-chain interoperability, and smart contract automation continue to emerge, reshaping the financial ecosystem. However, structural issues such as liquidity stratification, yield-risk mismatch, and legal challenges to asset control rights must not be overlooked. Looking ahead to 2025, innovation in asset categories, evolution of technological paradigms, and the restructuring of regulatory frameworks will become the three major themes driving the development of the RWA market, injecting new momentum into the healthy growth of RWAs.

This article is contributed by Sanqing, a community contributor of RealtyX DAO.

Ⅰ Data Landscape: From Explosive Growth to Structural Evolution

1.1 Total Volume Breakthrough and Differentiated Growth Rates

(Sourced from rwa.xyz)

· On-chain RWA Total Volume: Around $15.4 billion by the end of 2024 (excluding stablecoins), with a year-on-year growth of about 80% (2023 data: about $8.6 billion)

Differentiated Growth Rates:

· U.S. Treasury Bonds: Year-on-year growth of about 415% ($769 million→$3.96 billion)

· Private Credit: Year-on-year growth of about 48% ($6.656 billion→$9.828 billion)

· Commodities and Other Assets: Year-on-year growth of about 32.6% ($1.16 billion→$1.537 billion)

Real Estate Tokenization:

While the overall market has experienced significant expansion, different asset categories have shown distinct growth rates: U.S. Treasury Bonds have achieved hyper growth due to their safe-haven nature and institutional adoption, while private credit and commodities reflect market participants' differentiated focus on risk, return, and liquidity. Institut ions are optimistic about the long-term prospects of real estate tokenization, expecting a compound annual growth rate of close to 20%, implying that digital transformation and improved asset liquidity will drive the scalable implementation of this sector.

1.2 Market Structure Evolution

By 2024, the RWA Market Shows a "Dual-Driven, Diversified Expansion" Pattern

· Dual-Driven: U.S. Treasuries (415% annual growth) and Private Credit (48% annual growth) together account for over 85% of the market. The former benefits from macro hedging demand and institutional entry, while the latter attracts allocation due to its high-yield properties.

· Diversified Expansion: Traditional asset classes such as real estate and commodities are growing steadily, while ESG assets, art pieces, supply chain finance, and other emerging fields are penetrating rapidly, collectively supporting market diversification.

Behind this layered expansion is the synergistic action of technology, capital, and regulation. The three major trends—liquidity restructuring, scalable implementation, asset innovation—form the core context of market evolution.

Three Major Trends: From Liquidity Restructuring to Ecosystem Prosperity

· Liquidity Premium Unleashing: Blockchain reshaping pricing logic

· Technological Empowerment: 24/7 trading and smart contracts reduce transaction costs by 30–90%, compress liquidity premiums, and enhance RWA asset valuation.

· Positive Feedback Loop: Liquidity improvement → attracting more issuers and investors → further reducing premiums, forming a market expansion flywheel.

Scalable Applications: Institutional and Infrastructure Dual Breakthrough

· Traditional Finance Entry: BlackRock (BUIDL Fund), Franklin Templeton, and others launch compliant tokenized products to validate RWA business models.

· Specialized Public Chains Rise: Projects like Plume, Mantra, and other Layer1 solutions offer compliant and efficient tokenization infrastructure.

· Pricing Infrastructure: Chainlink's oracle coverage extends to over 70% of on-chain RWA assets, addressing the challenge of true price anchoring.

Asset Diversification: "Core-Periphery" Layered Evolution

· Core Dominance: Sovereign bonds and credit maintain their dominant positions, but diverging growth rates (415% vs. 48%) reflect differences in risk appetite.

· Periphery Expansion:

· Traditional Asset Digitization: Real Estate (19–21% CAGR), Commodities boosting liquidity through tokenization.

· Emerging Categories Emerge: ESG, Luxury Goods, IP, and other long-tail assets accelerating on-chain, with Supply Chain Finance (such as Accounts Receivable tokenization) unlocking SME financing potential.

The above three major trends—liquidity restructuring to reduce transaction friction, institutional-grade infrastructure to enhance trustworthiness, asset expansion to unlock long-tail value—are collectively driving deeper penetration of RWAs. Among them, real estate tokenization has become the most representative paradigm breakthrough due to its comprehensive integration of the three trends.

Focus Area: Paradigm Breakthrough of Real Estate Tokenization

Meanwhile, although the volumes of other niche areas are relatively small, they continue to demonstrate sustained market dynamism, providing support for the diversified development of the RWA ecosystem.

· Growth Trajectory: According to the optimistic forecasts of the ScienceSoft research team, by 2030, the global tokenized real estate market size may even reach a massive $30 trillion, accounting for 15% of real estate managed assets. They state that although this market is still in its early stages in 2024, the increasing adoption of tokenization technology by property owners, along with growing investor demand, further validates the rationale for issuing real estate tokens.

· Strategic Value: By integrating liquidity enhancement, institutional compliance, and multi-scenario applications, real estate tokenization has become a typical representative of RWA transformation potential, consolidating its core position in the broader RWA ecosystem.

Key application scenarios of Real Estate Tokenization include

Value Proposition: Breaking physical constraints through blockchain to achieve 24/7 global liquidity, unlocking the value of existing assets.

Ⅱ Industry Driving Factors: Analysis of the Triple Driving Engines

2.1 Institutional Entry

Institutions not only view RWAs as a new investment track but also seek to leverage public chains as underlying technology to optimize capital operations and enhance operational efficiency. Institutional entry will accelerate market maturity, drive the improvement of industry infrastructure, and further expand the digital boundaries of real-world assets.

Strategic Layout of Traditional Financial Giants

In March 2024, BlackRock launched the BUIDL tokenized fund based on the Ethereum network, mainly investing in cash, US treasuries, and repurchase agreements, providing qualified investors with an opportunity to earn USD returns. As of July 2024, BUIDL has managed assets exceeding $500 million, becoming one of the largest tokenized government bond funds.

In addition, institutions such as Fidelity, JPMorgan Chase, Citigroup, and others have also strategically positioned themselves in the RWA field.

Institutional Entry Driving Standardization and Infrastructure Development

The entry of institutions has not only brought in funding and resources but has also propelled the standardization and infrastructure development of the RWA market. Through collaborations with blockchain projects, traditional financial institutions are exploring best practices for tokenizing real-world assets, fostering market maturity.

BlackRock's BUIDL Fund has partnered with blockchain projects like Securitize, Maple Finance to ensure tokenized products comply with regulatory standards, providing an on-chain credit market to facilitate the creation and trading of credit products. Through a collaboration with Circle to establish a USDC liquidity pool, enabling real-time 1:1 exchange between BUIDL and USDC, liquidity for tokenized products has been enhanced.

JPMorgan Chase's Onyx Digital Asset Platform, through a tokenized collateral network, leverages blockchain to achieve the tokenization ownership transfer of money market fund shares, allowing asset management firms and institutional investors to pledge or transfer fund shares as collateral, improving capital efficiency.

2.2 Technological Breakthrough

Compliance Breakthrough

To ensure that blockchain applications comply with regulations such as Anti-Money Laundering (AML) and Know Your Customer (KYC), many projects are exploring embedding compliance mechanisms directly into the blockchain systems. For example:

Tokeny Solutions has developed the ERC-3643 token standard, which integrates identity management and transfer restrictions directly into the token smart contract, enabling issuers to conduct investor eligibility checks, KYC/AML checks, and compliance rules on-chain. For instance, BlocHome utilizes the ERC-3643 standard to issue tokenized real estate, allowing the project to automatically verify investors' identities, ensuring compliance with regulatory requirements. According to BlocHome, after adopting the ERC-3643 standard, compliance costs reduced by 90%.

Tether launched the asset tokenization platform Hadron, offering risk control, asset issuance and redemption, KYC and AML compliance guidance, and supporting blockchain reporting and capital market management.

The Verite framework introduced by Circle is an open-source identity verification solution designed to provide interoperable identity standards for the decentralized finance (DeFi) ecosystem. The framework enables users to prove their identity on-chain while maintaining control over personal data. It holds the potential to achieve dynamic linking between on-chain identity and real-world asset (RWA) holdings.

Cross-Chain Interoperability

Blockchain interoperability refers to the ability for different blockchain networks to exchange information and value. Achieving cross-chain interoperability is crucial for promoting the collaborative development of the blockchain ecosystem. Currently, cross-chain communication protocols are emerging to securely connect different blockchain networks and address the challenges of a fragmented blockchain landscape. For example:

Wormhole has introduced the NTT framework, providing an open and flexible cross-chain solution that allows native assets to seamlessly move between different blockchains without the need for traditional wrapped token models. This innovation eliminates the intermediary risk of wrapped tokens, enhancing the efficiency of multi-chain liquidity integration.

Chainlink has released the Cross-Chain Interoperability Protocol (CCIP), a new open-source standard aimed at establishing a universal connection between hundreds of public and private chain networks to enable cross-chain applications. CCIP addresses the fragmentation issue in the blockchain space by ensuring data and assets can securely transfer between different blockchain networks, facilitating seamless interaction among various tokenized assets.

Public Chain Infrastructure

Through smart contracts, an RWA public chain can automatically conduct compliance checks, transaction settlements, and revenue distributions, reducing intermediary costs, improving operational efficiency, and providing a borderless platform for global investors to facilitate cross-border capital flows. Below are brief descriptions of two prominent RWA-specific public chains.

Plume Network

Plume is the first full-stack Layer 1 public chain built specifically for Real World Asset Finance (RWAfi), aiming to achieve rapid tokenization of real-world assets and global distribution. Its composable EVM-compatible environment supports the access and management of various real-world assets.

· End-to-End Tokenization Engine: Simplifies the asset onboarding process through automated compliance checks, KYC/AML integration, and compliance templates.

· Interoperability Hub: Its SkyLink cross-chain interoperability solution connects to 16+ public chains (such as Solana, Movement), allowing users to enjoy institutional-grade RWA benefits across multiple chains permissionlessly, fostering the development of a cross-chain RWA ecosystem.

· Ecosystem Expansion: Plume has onboarded 180+ protocols covering areas such as real estate tokenization, private lending, commodities, among others. Its strategic partnership with rwa.xyz ensures comprehensive on-chain RWA data analytics, offering users industry-leading tokenized asset data.

Mantra

Mantra aims to provide a permissionless, high-performance, and scalable Web3 development environment designed specifically for compliant Real World Asset (RWA) applications:

· Compliance Integration: Mantra is the first platform to receive the VARA-issued DeFi VASP license, allowing it to legally operate a virtual asset trading platform, brokerage services, asset management, and investment services in Dubai, further solidifying DeFi's legitimacy within the compliance framework.

· Real-World Impact: In partnership with the DAMAC Group, Mantra has tokenized $1 billion worth of Dubai real estate, enhancing the liquidity of high-value properties.

· Developer Friendly: It offers SDKs and APIs for seamless integration of identity verification, asset custody, and cross-chain settlements.

2024 RWA Technology Stack Recap

In summary, the 2024 RWA tokenization technology stack has achieved "three-layer decoupling," separating and synergizing the asset layer, protocol layer, and application layer.

Asset Layer

· ERC-3643 Standard: Widely used for compliant equity tokenization. This standard integrates identity management and transfer restrictions directly into the token smart contract, allowing issuers to conduct investor accreditation on-chain as well as KYC/AML checks to ensure token transaction compliance.

Protocol Layer

Chainlink's oracle network has made significant progress in RWA price data source coverage.

The Cross-Chain Interoperability Protocol (CCIP) supports seamless RWA cross-chain management, addressing inter-chain fragmentation issues and enhancing liquidity.

Application Layer

· Lending: Maple Finance was the first to introduce unsecured institutional loans and later opened up to retail users through Syrup.fi (launched in June 2024). Defactor also became a key player, offering on-chain lending solutions for RWAs and retail users.

· SME Financing: Centrifuge tokenizes real-world receivables and invoices, unlocking blockchain-based liquidity to support small and medium-sized enterprise financing.

· AMM Liquidity Provision: IX Swap enhances Automated Market Maker (AMM) technology to facilitate liquidity provision for tokenized assets.

· Secondary Market Trading: Polytrade drives the development of the RWA secondary market, enabling efficient trading of tokenized assets.

This decoupled architecture allows each layer to evolve independently while maintaining seamless integration, thereby propelling RWA from niche experiments towards scalable institutional-grade solutions.

2.3 Regulatory Chess

By 2024, RWAs had made significant strides globally, but the large-scale implementation of RWA relies on clear regulatory guidance and policy environments. Governments and international regulatory bodies are actively exploring how to promote the development of this emerging field while safeguarding financial stability and protecting investor rights.

Divergence and Coordination of Global Regulatory Trends

· U.S. SEC: In 2024, the SEC outlined a regulatory framework for security tokens and tokenized assets, emphasizing that such assets must comply with existing securities regulations. This move provided clearer guidance for the compliant operation of RWA. Faced with SEC regulation of digital assets, some RWA projects (such as RWA Inc.) will collaborate with compliance consulting firms to conduct a security analysis of their RWA tokens and take appropriate compliance measures based on the analysis results.

· EU MiCA: Building upon MiCA, the EU further supplemented regulatory provisions for RWA. MiCA categorizes stablecoins into Asset-Reference Tokens (ART) and Electronic Money Tokens (EMT), setting clear requirements for their issuance and operation. Specifically, MiCA stipulates:

· Asset-Reference Token (ART): Refers to a cryptocurrency that is pegged to the value of one or more fiat currencies, one or more commodities, or one or more cryptocurrencies, designed to maintain a stable value. MiCA imposes higher capital requirements and stricter operational requirements on ART issuers to ensure they have sufficient asset reserves to support the token's value.

· Electronic Money Token (EMT): Refers to a cryptocurrency pegged to the value of a fiat currency, designed to maintain a stable value. EMT issuers must obtain a license from an electronic money institution and comply with relevant regulatory requirements.

Asian Regulatory Sandbox:

· Japan: The revised Payment Services Act in Japan has clarified the regulatory positioning of stablecoins as "electronic payment instruments."

· Hong Kong and Singapore: By issuing regulatory guidance and sandbox plans, they have provided a clear compliance path for innovative products like RWAs.

The Balance Between Regulation and Innovation

· Dynamic Regulation and Sandbox Mechanism: Multiple countries have adopted a "regulatory sandbox" model, allowing companies to experiment with new technologies and business models within a limited scope while collecting data to adjust policies. For example, the sandbox plan introduced by the Hong Kong Monetary Authority provides a testing ground for digital asset products like stablecoins, ensuring compliance without hindering innovation.

· Cross-Border Regulatory Coordination: As RWAs and other digital asset markets globalize, regulatory authorities worldwide are attempting to promote uniform regulatory standards under international frameworks (e.g., FATF, G20). This will help alleviate cross-border regulatory conflicts and information asymmetry issues.

Ⅲ Market Paradox: Structural Contradictions in Prosperity

3.1 Liquidity Stratification Phenomenon

The tokenization of RWAs was intended to enhance asset liquidity through blockchain technology, enabling assets to be traded more quickly and transparently in the market. However, in practice, different types of assets exhibit significant liquidity stratification:

Differences in Asset Nature and Market Size:

· Differences in Intrinsic Asset Attributes. For example, tokenized U.S. Treasury bonds have national credit endorsement, a mature trading market, and high credit ratings. They have active trading, high transaction volume, and a well-established price discovery mechanism, thus possessing high liquidity. On the other hand, assets like real estate and art have complex valuation, limited investor demand, and restricted trading methods, often resulting in high holding costs and longer exit periods, leading to insufficient liquidity.

· Market Size and Participant Structure. Highly liquid assets typically attract a large number of institutional and retail investors, coupled with sufficient market depth, allowing for quick matching of buy and sell orders at any given time. Conversely, low-liquidity assets may form information silos with fewer investors, sparse order books, low trading volumes, high price volatility, and difficulty executing large trades without significant slippage.

Participant Behavior and Expectation Management:

· Preference for High Liquidity Assets. Investors generally prefer assets that are easily liquidated with low transaction costs, especially evident during periods of high market activity. The trading activity of high liquidity assets will further attract more participants, while low liquidity assets may be marginalized, leading to a "survival of the fittest" market dynamic.

· Liquidity Premium and Price Volatility. Assets with higher liquidity often carry a premium, whereas low liquidity assets may experience significant discounts due to a lack of sufficient counterparties when immediate liquidation is needed, thus exacerbating price volatility and market risk.

To address this issue, many Real World Asset (RWA) projects take the following measures:

· Introducing Market Making Mechanisms: Encouraging market makers to provide liquidity for low liquidity assets by offering buy and sell quotes to narrow bid-ask spreads and increase trading activity.

· Integrating DeFi Protocols: Combining RWAs with DeFi protocols, such as using RWAs as collateral for lending or including RWAs in DEX trading pairs. Through DeFi protocols, liquidity for RWAs can be increased, providing investors with more earning opportunities.

· Incentivizing User Participation in Trading: Incentivizing users to engage in trading of low liquidity assets through airdrops, trading competitions, and other methods.

3.2 Yield Risk Mismatch Crisis

While RWAs have brought investors diversified earning opportunities, behind the allure of yield, there often lies a mismatch between yield and risk:

Lack of Risk Disclosure and Transparency

Traditional financial markets require strict information disclosure and regular risk assessment reports. However, in the tokenization process of RWAs, some platforms have not established standardized and transparent risk assessment and information disclosure standards. The lack of sufficient risk warnings makes it difficult for investors to timely understand the asset's credit condition, collateral quality, and market volatility.

Disconnect Between Asset Backing and Actual Risk Exposure

In many tokenization projects, to achieve digital asset management, SPVs (Special Purpose Vehicles), trust funds, or third-party custodial entities are usually set up to hold assets. However, if these structural designs are flawed, in the event of bankruptcy or default, the tokens held by investors may not be truly corresponding to the actual assets, leading to an exacerbation of yield risk mismatch. High-yield products often come with higher default probabilities and credit risks. In the RWA market, some products may lead investors to underestimate potential credit risks due to opaque marketing or ratings, resulting in significant losses when default events occur.

Market Sentiment and Risk Premium Volatility

Traditional financial markets usually have various risk mitigation tools (such as credit default swaps, collateral mechanisms, etc.) to balance risk and return. However, in many RWA tokenization products, such tools have not been fully developed and applied, leading to a more pronounced mismatch between returns and risks. In a decentralized trading environment, token prices are more influenced by short-term market sentiment and liquidity fluctuations. When market sentiment is optimistic, high-yield assets may be overly hyped, with prices far exceeding their fundamental support; and once the market turns cold or experiences a sudden risk event, prices drop rapidly, causing investors to enter at the peak and exit at the trough, further exacerbating risk mismatch.

3.3 Legal Paradox of Asset Ownership

During RWA tokenization, the ownership of assets has created an inherent paradox between the legal system and the technical framework. This paradox is mainly manifested in the dilemma of rights confirmation, failure of bankruptcy isolation, and cross-border judicial conflicts, making token holders face a dilemma of "triple rights suspension."

· Dilemma of Rights Confirmation: Blockchain technology provides a decentralized ledger that can ensure the uniqueness and transferability of tokens through encryption. However, real-world asset ownership relies on traditional legal systems such as real estate registration, company share structures, custody agreements, etc. Therefore, ownership of RWA may be fragmented between on-chain registration and off-chain rights confirmation.

· Smart Contracts vs. Real Legal System: Although token holders have ownership certificates on-chain, without corresponding legal recognition, this right may not be able to withstand third-party claims. For example, in real estate tokenization projects, even if holding tokens, if formal real estate registration is not completed, token holders may not be recognized as true asset owners under current law.

· Automatic Execution of Smart Contracts vs. Judicial Intervention: In judicial proceedings, courts may freeze or reallocate assets, and the automated execution logic of smart contracts may not effectively comply with legal orders, leading to conflicts between the legal system and the technical framework. This means that even if the on-chain transaction is completed, the court may still rule the transaction invalid or revoke it.

· Failure of Bankruptcy Isolation: Tokenized assets usually need to be managed by an entity (such as an SPV company, a trust fund, or a custody institution), and once this entity goes bankrupt, token holders may face:

· Unclear Asset Ownership: In the traditional financial system, securities, trust assets, etc., are usually protected by bankruptcy remoteness mechanisms, meaning that even if the manager goes bankrupt, holders' assets will not be used to settle debts. However, in the practice of tokenized RWAs, if the legal structure of the asset custodian is unclear, token holders may face the risk of assets being seized by the court or used to settle debts.

· Token Rights May Be Seen as Unsecured Claims: If regulators or courts deem tokens to be merely a "mapping" of assets rather than direct ownership certificates, token holders may not be able to enjoy priority repayment rights in bankruptcy liquidation and may only be treated as ordinary creditors in line for repayment. This would severely undermine the credit foundation of RWA assets as financial instruments.

· Cross-Border Judicial Conflicts: RWA tokenization typically involves multiple legal jurisdictions, such as the location of assets, token issuance jurisdiction, investors' locations, etc. Conflicts between the laws of different countries may leave the rights of token holders in an uncertain state.

· Differential Recognition of Asset Ownership by Different Legal Systems: In some countries, digital assets may be considered legitimate property protected by property law, while in other countries, they may only be considered contractual or note rights subject to different legal frameworks. Therefore, investors may face the inability to obtain legal protection for their tokenized assets in these countries due to differing legal interpretations.

· Cross-Border Enforcement Issues: Suppose an investor holds a blockchain-based tokenized gold asset, but the gold is stored in a bank vault in another country. If the ownership of gold is interpreted differently by the laws of the two countries, the investor may not be able to effectively assert their ownership claim. Additionally, there are technical barriers to enforcing court freezes or seizure orders on the blockchain.

IV Future Projection: 2025 RWA Three Major Trends

4.1 Asset Category Revolution

Wave of Non-Standard Assets On-chain:

As the RWA market continues to expand, private credit and U.S. Treasury bonds are expected to remain dominant due to their excellent liquidity and credit ratings. However, non-standardized assets, particularly real estate in developed regions or high-growth economies, will undergo a significant on-chain process in 2025.

According to Bitwise's forecast, by the end of 2025, the RWA market size will reach $500 billion. Security Token Market predicts that tokenized real estate will reach $1.4 trillion, and Roland Berger predicts that real estate will capture nearly one-third of the market share. Roland Berger's forecast indicates that real estate is expected to become the largest tokenized asset type by 2030, occupying nearly one-third of the market. This is mainly due to the maturity of blockchain technology and increasing demand for RWAs, with these traditionally less liquid assets expected to achieve more efficient trading and management.

(Inspired by Roland Berger)

RWAFi Large-Scale Convergence Innovation: Before the real world formally transitions into the Web3 era, the development of RWA was mainly driven by the desire for traditional financial liquidity. However, with RWA's move to the chain, this process is not just about asset digitization but rather a deep integration with blockchain finance such as DeFi. This integration has led to a powerful "RWA+Any 'Fi'" model, driving diversity and depth in financial innovation. The combination of real estate tokenization and DeFi is a key direction of RWAFi convergence innovation. Through putting real estate assets on-chain and integrating them with DeFi protocols, the following innovative applications can be achieved:

· Collateralized Loans: Using tokenized real estate as collateral to borrow from DeFi lending platforms (e.g., using tokenized apartments as collateral to receive a stablecoin loan).

· Yield Farming: Token holders can deposit RWA tokens into DeFi protocols to earn interest income (such as loan repayment returns) or protocol rewards (such as governance tokens). Unlike passive holding, yield farming can actively optimize asset returns.

· Liquidity Mining: Users can provide liquidity for RWA token trading pairs on decentralized exchanges (DEXs) to earn transaction fees and liquidity incentives, with returns proportional to the liquidity provided.

Case Study: RealtyX, Plume Network, and ecosystem partner RealtyX (a real estate tokenization platform) and Plume Network (an L1 blockchain built specifically for RWA) are driving the implementation of the RWAFi innovation framework:

· Tokenization: RealtyX tokenizes real estate (such as Dubai residential properties) on the Plume blockchain, ensuring compliance and cross-chain interoperability.

· Collateralized Loans: Token holders can use RealtyX tokens as collateral to borrow on lending platforms integrated with Plume (such as Defactor, Mystic Finance).

· Yield Farming: By combining RealtyX's real estate tokens with Pendle's yield tokenization protocol, users can create tradable tokens representing future rental income, optimizing investment returns.

· Liquidity Mining: The RealtyX token can be paired with a stablecoin to form a liquidity pool for DEX (such as Rooster Protocol) trading. Liquidity providers can receive RealtyX and Plume's native token incentives.

4.2 Technology Paradigm Shift

Adoption of Zero-Knowledge Proof Technology

Zero-Knowledge Proof (ZKP) technology has shown significant potential in various areas of Web3. In the RWA field, the application of ZKP can achieve asset verification and transactions while ensuring data privacy. This is particularly important for on-chain transactions involving sensitive information assets such as real estate, private credit, etc., enhancing transaction security and trust.

Adoption of Modular Blockchain

Modular blockchain architecture has demonstrated advantages in enhancing network performance and scalability in other Web3 areas. In the RWA field, the adoption of modular blockchain can facilitate the flexible combination of different functional modules to meet the diverse needs of on-chain assets. This will promote standardization and interoperability of RWA, reduce the technical barriers and costs of on-chain transactions. For example, the Plume Network, which attracted over 180 RWA-related protocols and over 300,000 user addresses on the testnet, generating billions of transactions.

4.3 Regulatory Framework Reconstruction

Shift in U.S. Regulatory Policy

Considering the Trump administration's crypto-friendly stance and U.S. institutions accelerating their entry into the RWA field, it is foreseeable that the U.S. will demonstrate a more open attitude towards cryptocurrency asset regulation. It is expected that policies and regulations supporting on-chain RWAs will be introduced to encourage financial innovation while ensuring market stability and security. This will provide a clearer legal framework for the development of RWA, reduce compliance risks, and attract more institutions and investors to participate.

Transnational Unified Regulation

While not a major trend in 2025, with the continuous growth of RWA, particularly the predicted continuous growth of non-standard assets, this year may see numerous litigations involving RWAs, especially those related to non-standard assets. This will prompt regulatory agencies worldwide to consider establishing a unified international regulatory framework to address legal and compliance issues in cross-border transactions.

Conclusion: RWA's Journey Towards Institutional Maturity and Growing Pains

By 2024, RWA tokenization has moved from concept to reality, entering a phase of scalable application driven by institutional investment acceleration (e.g., BlackRock BUIDL), regulatory breakthroughs, and infrastructure upgrades (such as Plume Network's RWA-specific L1). However, as tokenized assets such as government bonds, real estate, and private credit continue to grow, the industry still faces a series of structural challenges.

Key Challenges

· Centralization Dilemma: Compliance vs. Decentralization Conflict

Many RWA protocols rely on a "permissioned DeFi" model (such as custodians, SPVs) to meet compliance requirements, which conflicts with the decentralization ethos of blockchain.

Asset legal ownership remains constrained by traditional legal frameworks, limiting smart contract autonomy in dispute resolution.

· Decentralization Gap: Access Barriers and Regulatory Hurdles

There is a conflict between lowering the investment threshold and barriers such as KYC/AML compliance, opaque disclosure, and high technical hurdles.

Although DAO governance holds potential, it still faces challenges of low participation and regulatory uncertainty.

· Market Fragmentation: Uneven Liquidity Distribution

Liquidity is concentrated in blue-chip RWA assets (e.g., U.S. Treasuries), marginalizing niche assets.

Cross-border legal uncertainty threatens the enforceability of tokenized asset ownership claims, increasing investment risk.

Path to Breakthrough: Collaboration Over Compromise

To achieve the global development of RWA, industry stakeholders need to focus on driving the following directions:

Seamless Interoperability

By leveraging Plume Network's RWA-specific L1 and RealtyX's DeFi integration, bridge the traditional finance and blockchain worlds to reduce asset friction.

Compliance Integration

Embedding KYC/AML mechanisms at the protocol level (such as zero-knowledge proof identity authentication) ensures compliance while protecting user privacy, demonstrating that compliance should not be an innovation barrier.

Global Governance Alliance

In collaboration with institutions such as FATF and BIS, the alliance is driving the harmonization of cross-border regulatory standards to ensure that the rights of tokenized assets are legally protected in situations such as bankruptcy and legal conflicts.

Educational Outreach for Mass Adoption

By offering a more user-friendly interface (e.g., RealtyX's retail-friendly Dapp), the goal is to lower the barrier of entry for the average user and enhance market transparency through the use of Chainlink's asset-specific oracle.

Charting a Responsible Blueprint for Scalable Development

The rise of Real World Assets (RWA) is not about replicating traditional finance but about reshaping trust:

· For institutions: Achieving 24/7 liquidity to enable previously illiquid assets to access the global market.

· For individual investors: Expanding market access to assets such as Dubai real estate and Asian private credit.

· For developers: Projects like RealtyX are validating that decentralized and real-world financial frameworks can coexist compatibly.

The infrastructure is already in place, and the industry trend is irreversible. The key now lies in efficient execution—industry stakeholders need to approach this with a rigorous mindset, an inclusive perspective, a future-oriented focus, and drive RWA towards institutional maturity.

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