Original | Odaily Planet Daily ( @OdailyChina )
Author | Dingdang ( @XiaMiPP )
In the context of the uncertain direction of the crypto market and the lack of new narratives in the market, the real world asset (RWA) track is attracting the attention of global investors and institutions with its unique potential. As a bridge between traditional finance and Web3, RWA injects new vitality and possibilities into the market by tokenizing assets such as government bonds and real estate.
This issue of Odaily Planet Daily invited three industry pioneers, Rania from Ondo Finance, Laura from Pharos, and Jeffrey from R2 Protocol , to discuss in depth how RWA can ensure asset credibility, solve traditional financial pain points, improve transaction efficiency, and share their experience in cooperation with top institutions. They also had a wonderful conversation around regulatory challenges, industry vision, and the opportunity for RWA to explode, revealing the opportunities and future of this track for us.
Guest Introduction
Rania (Ondo Finance)
Hi, I’m Rania, and I’m in charge of sales and business development for Ondo Finance in the Asia Pacific region in Singapore. I have four years of experience in the Web3 industry, and previously worked at Bakkt for four years. Let me briefly introduce Ondo Finance. We are an American blockchain technology company, known for pioneering the tokenization of US Treasury bonds. We have two core products: USDY for the retail market and OUSG for institutional investors. The total locked value (TVL) currently exceeds US$1 billion, second only to BlackRock.
Laura (Pharos)
Hi, my name is Laura. I joined Pharos two months ago and am responsible for marketing and strategy. I was previously in charge of marketing and sales of the first Solana phone at Solana Labs. I worked in financial technology for many years at Visa and PayPal. Pharos is an EVM-compatible, high-performance Layer 1 public chain. Our team has a deep background in Ant Group. Our CEO is the former CTO of Ant Chain, and our core technical team has also been working in blockchain technology at Ant for many years. We believe that Pharos is the fastest public chain among EVM-compatible chains, capable of 50,000 TPS and 2 Gbps throughput. In February and March of this year, we launched the public development network, and will launch the test network next month. From a business perspective, we focus on the RWA track because it is the blue ocean of Web3 and the stock market is huge. The professional background of the team and the in-depth cooperation with Ant are our core advantages. Hundreds of millions of dollars of assets will be deployed on Pharos in the early stage.
Jeffrey (R2 Protocol)
Hello everyone, my name is Jeffrey. I entered the crypto industry in 2017 and have nearly eight years of experience. I have participated in multiple Web3 projects such as Layer 1, Layer 2, DeFi, DEX and lending. I am a serial entrepreneur. The R 2 Protocol I am currently leading is a stablecoin income project based on real-world assets (RWA). We work with compliant third-party asset management institutions, such as Ondo Finance, to integrate their financial products to provide underlying asset allocation and income generation for our stablecoin R 2 USD. The team has 13 people with an average of 4-5 years of industry experience, covering traditional finance and Web3 fields. After six months of polishing, we launched the test network today. Welcome everyone to experience it!
Question 1: How does RWA ensure the authenticity and credibility of on-chain assets? What technologies or processes are used?
Rania (Ondo Finance)
Ondo Finance is the only company in the industry that provides a full range of RWA solutions, covering asset selection, platform building, infrastructure and partnerships to promote financial assets on the chain. We pay great attention to compliance and work with top institutions such as BlackRock, Franklin Templeton, etc. As for the authenticity and credibility of assets that everyone cares about, we adopt a bankruptcy isolation framework to ensure that investors enjoy priority repayment rights. For example, our USUY and OUSG products are backed by US Treasury bonds and bank deposits 1: 1, with a collateral ratio of at least 103%. These assets are regularly verified by an independent institution, ANKURA Trust, to ensure the legal protection and asset security of holders.
Laura (Pharos)
As a public chain, we will cooperate with multiple asset issuers, such as Ant Group. We found that different assets have different rights confirmation needs. Some assets are easy to confirm due to their characteristics, while others are more difficult. For example, the output and credibility of new energy assets (such as photovoltaics, energy storage, and battery swapping) in China and the Middle East that Ant cooperates with are difficult to measure. They use AIoT devices, such as installing sensors on photovoltaic panels or energy storage equipment, to collect real-time data, such as power generation. These data are packaged and uploaded to the chain to support asset pricing and credibility. Because these assets can generate electricity themselves, the data is naturally suitable for being uploaded to the chain. We work with issuers to customize the title confirmation process based on the characteristics of the assets to ensure authenticity and credibility.
Jeffrey ( R2 Protocol)
Our approach is somewhat different from the previous two guests. R 2 Protocol has many years of experience in the Crypto field, and our advantage lies in the Web3 ecosystem. Our strategy is to cooperate with compliant RWA asset issuers, such as Superstate, Securitize, Centrifuge and other high-quality issuers. Our model is strengthening strengths and avoiding weaknesses. They are responsible for the compliance and tokenization of assets. We reach out to their products through KYB, KYC and asset verification, and provide them to users as one of the underlying asset packages of R 2 USD, while taking into account liquidity, risk and rate of return. This mode of cooperation relies on the professionalism of the issuer to ensure that the assets are authentic.
Question 2: What are the concerns of traditional finance about RWA? How can the project solve them in a targeted manner?
Jeffrey ( R2 Protocol)
Traditional finances main concerns about RWA include unclear asset ownership, opaque fund use, and differences in regulatory terms in different regions. For example, Europes MiCA regulations have caused headaches for many tokenization institutions. DeFi has solved most of these problems. For example, asset transfer records can be publicly queried on the chain, which is very transparent. We have added a more reliable endorsement on the R2 side. User funds will flow into compliant products, such as Ondo Finances OUSG, but we will not keep these assets in our own wallets or foundation accounts. Instead, they will be transferred directly to compliant custodians, such as Copper or Fireblocks, through smart contracts. R2s smart contracts are only responsible for dividend and interest calculations, and do not touch the underlying assets themselves. This design makes the flow of funds transparent and reliable, solving the problems of unclear ownership and opaque funds. In addition, we will publish audit reports on the underlying assets every month with third-party auditors and custodians.
Question 3: What is the difficulty and threshold of RWA asset transactions? How can the project simplify transactions and increase market activity?
Rania (Ondo Finance)
We, Ondo, mainly target three issues of traditional finance: accessibility, transparency, and market efficiency. We call it Wall Street 2.0. In terms of accessibility, global investors have difficulty accessing US financial products due to high thresholds, minimum balances, and fees. Tokenization allows US bonds and US stocks to be put on the chain like stablecoins, making it convenient for users to buy. In terms of market efficiency, it is expensive to buy US stocks in the traditional market, and you have to wait 2-5 days for bank transfers, which is very inconvenient. We improve efficiency by putting them on the chain, and also support more DeFi scenarios, such as users can use these assets as collateral in lending agreements to improve capital efficiency. At present, our USUY for the retail market has reached US$600 million TVL and OUSG for institutional users has reached US$400 million TVL. It supports 9 chains, such as Solanas Drift Protocol, Suis Aave, Arbitrums Camelot, etc. Users can trade or borrow at any time. In the RWA T-Bill market, Ondo accounts for 85% of the market share.
Jeffrey ( R2 Protocol)
Traditional RWA assets, such as government bonds and money market funds (MMFs), generally lack trading liquidity. Ordinary investors do not know where to invest in US stocks or US bonds, or require complex KYC processes, and high-quality investment products are almost inaccessible to them. R2 Protocol uses the R2 USD stablecoin as an intermediate channel to provide small and medium-sized investors with a simple and fast channel, allowing them to access high-quality financial products with low or even zero thresholds and obtain safe and stable returns. We are a Crypto native team that simplifies the user experience in the form of DeFi. Web2 provides real returns, and Web3 provides simplification and transparency. The two complement each other. However, we also found a problem. Some RWA issuers support fewer chains, such as only supporting Ethereum, while Ondo supports fewer chains. More cross-chain collaboration is needed in the future. At present, issuers mainly issue on Ethereum, Solana and Arbitrum are also preferred, and Move chain also has potential.
Question 4: Can you share a successful case study of cooperation with RWA projects? How is the cooperation with traditional banks or institutions?
Rania (Ondo Finance)
Ondo works with several top global institutions, including asset managers such as BlackRock, Franklin Templeton, WisdomTree, and Wellington. We use their assets to support OUSG products, while providing them with 24/7 cash liquidity, and assets can be converted into USDC at any time, which is rare in traditional finance. Many large companies want to participate in RWA tokenization, but lack the understanding of Crypto user needs, which is exactly what Ondo is good at. We help them design products and processes, and OUSG currently has a scale of US$400 million. Another example is that we partnered with Mastercard and Morgan Stanley two months ago to establish a three-party relationship. Users can instantly put bank dollars on the chain, or redeem on-chain stablecoins back to their bank accounts, eliminating 2-5 days of posting time. This barrier-free model greatly improves the user experience.
Laura (Pharos)
We are now in the testnet preparation stage. I can share a case that is being incubated and combined with the experience of Ant Group. We believe that RWA assets have a geopolitical imprint. Not all Asian assets want to be listed on the Nasdaq or NYSE, so we are building a Layer 1 public chain that is deeply rooted in Asia. Ant has completed multiple RWA businesses in the Hong Kong Monetary Authoritys Assemble sandbox, such as photovoltaic projects in Hunan and Hubei (hundreds of millions of RMB), battery swap assets (tens of millions of Hong Kong dollars), and charging pile assets in cooperation with Longstar. These assets are chained through AIoT technology and anchored to income rights. Our cooperation will go a step further. Ant will issue assets on Pharos, and the income rights will be issued in the form of stablecoins. Combined with Pharos token incentives, the annualized return will reach 15-18%. We also plan to launch the RWAFi layer, allowing LPs to borrow stablecoins with RWA tokens and put them into the DeFi ecosystem for circulation. This not only improves capital efficiency, but also provides financing channels for enterprises through Mini IPO and increases GDP.
Jeffrey ( R2 Protocol)
We are still in the early stages of the testnet and do not have our own cases yet, but I can share a friends project that is similar to the model mentioned by Laura. They tokenize the rental income of properties in prime locations, rather than tokenizing the properties themselves. Users invest in the right to rental income, and the project party absorbs Web3 and traditional funds to expand the companys scale, and uses the raised funds to reinvest in high-quality properties to generate more income. This model is applicable to any asset that generates real income, such as real estate or other fields. By going on-chain to attract on-chain and off-chain funds, similar to IPOs, the scale of business can be expanded. I know that many companies are already doing similar things, and this is definitely a trend in the future.
Question 5: Facing regulatory uncertainty, what strategies does the project have?
Jeffrey ( R2 Protocol)
In my opinion, RWA is the intersection of traditional finance (TradFi) and DeFi, and compliance is the moat of every project. We do not issue tokenized assets, but work with third-party issuers. We need to pass their KYB and asset verification, which involves a lot of legal and compliance information. The calculation and distribution of income must consider whether it is defined as a security, as well as the different legal terms of each country. Our team has part-time lawyers and works with a law firm to promote compliance matters. Since we are not an issuer, we do not need to apply for a license, but issuers like Ondo may need it. For example, Hong Kong and Singapore have different license requirements for asset issuance.
Rania (Ondo Finance)
Ondo operates through exemptions from the US SEC and does not hold a direct license. Our assets are managed by licensed brokers, such as purchasing US Treasuries through Morgan Stanley and StoneX. Ondo is positioned as a technology company and is responsible for blockchain. When selling products in other countries, we work with local licensed companies to ensure compliance. We adopt an active communication model and work closely with regulators to ensure that products meet legal standards. Currently, we rely on exemptions in the United States, and in the future, we will communicate with regulators in more countries to launch new products.
Laura (Pharos)
Regulation is the biggest challenge for RWA, and all practitioners will agree. We deal with it from three dimensions: First, choose regions with clear regulatory frameworks, such as the United States, Dubai, Singapore, Hong Kong, and the Cayman Islands. We have seen the trend of global compliance convergence from lawyers communication, and hope that in the future, after assets are issued in a certain region, they can be used in other regions without major adjustments. Second, choose compliant asset issuers, such as Ant issuing assets in Cayman, to ensure compliance from the source. Third, adopt a conservative strategy in the early stage, such as blocking individual users in the United States and only opening on-chain assets to qualified investors. We are positioned as infrastructure, not issuing assets, but using DeFi and RWAFi layers to prosper the RWA ecosystem.
Question 6: How does RWA improve traditional finance? What is the long-term goal of the project?
Rania (Ondo Finance)
Ondo is committed to solving the accessibility, transparency and market efficiency issues of traditional finance. There are three reasons for the rise of RWA in the past two years: the maturity of blockchain technology supports large-scale financial applications; the market demand for traditional assets has surged; and the regulatory frameworks of various countries for tokenization and RWA have gradually improved. Looking forward to 2025, RWA will move from concept to more products to accelerate on-chain, and stablecoin issuers and large companies are joining in. It is not limited to US Treasuries, but also assets such as US stocks will be on-chain. Ondo plans to launch US stock tokenization products within the year to create a permissionless, convertible ecosystem that anyone can easily buy. We hope that traditional finance will be more and more integrated with the on-chain ecosystem, promote Wall Street 2.0, and improve efficiency, transparency and accessibility based on RWA.
Laura (Pharos)
I completely agree with Ranias point of view. RWA is the blue ocean of Web3 and traditional finance. From the perspective of asset issuers, high-quality assets are difficult to raise funds efficiently in the traditional market for various reasons. Web3 can achieve mini IPO through tokenization and create GDP in a real way. From the perspective of buyers, RWA is permissionless and highly accessible, allowing more people to access high-quality assets and build a new Internet capital market. From the perspective of Web3 and TradFi, Web3s DeFi and RWAFi infrastructure greatly improve capital efficiency, and TradFis asset stock, such as tens of trillions of dollars in real estate, can double the growth of the Web3 market even if 0.1% is on the chain. Pharos long-term goal is to become the underlying infrastructure of global exchanges, supporting securities, commodities or other spontaneous exchanges, combining RWAFi and DeFi layers, so that RWA assets can be used as collateral while collecting interest, revitalizing DeFi scenarios, and improving liquidity and capital efficiency.
Jeffrey ( R2 Protocol)
The two speakers above have already described the advantages of RWA in a very comprehensive way. Whether RWA can make traditional finance better depends on whether it can provide value, whether it is long-term or short-term. According to the data, the RWA market will grow by 85% from 2024 to 2025, and is expected to reach US$15.2 billion in 2025, doubling every year, indicating that the market demand is very strong. In the past, Web3 projects were mostly driven by narratives, but now everyone is focusing on providing real value, such as Uniswap providing trading scenarios. RWA meets users demand for stable returns by putting real returns on the chain, especially when the market is unstable. Our long-term goal is to cooperate with compliant third-party RWA issuers to put real returns on the chain, form products through strategic thinking, and provide users with stable returns. In the future, we will launch diversified products for different users, such as high-risk and high-return products, which are difficult for traditional finance to provide. The core is to provide users with real returns.
Question 7 (extra): When will the RWA track explode? What are the opportunities or expectations?
Rania (Ondo Finance)
The definition of an outbreak is important. Stablecoins are a successful case of RWA, bringing the US dollar on-chain. But it will take time for ordinary users to widely purchase assets such as US stocks. I wish I had a crystal ball to predict the specific time, but we have seen that the market demand for traditional assets has increased several times from last year to this year, and there may be a breakthrough this year or next year. There should be hope before 2025, and we need to build patiently.
Laura (Pharos)
I agree with Ranias point of view. I also hope that a crystal ball can tell me the time. The outbreak of RWA may be the most difficult task facing Web3 practitioners. Pure on-chain ecosystems such as DeFi can be closed in Web3, but RWA requires TradFi and Web3 to be connected together. Financial language and on-chain contract language cannot communicate directly at present. Many visionary projects, such as Ondo, Pharos, and R 2, promote RWA from different angles, which makes us full of confidence in the future. The outbreak requires the connection of technology, finance and supervision. The participation of more institutions and governments is a key opportunity. Although the time is uncertain, more and more smart people are willing to try.
Jeffrey ( R2 Protocol)
I agree with Lauras point of view. The outbreak of RWA is limited by the compliance policies of various countries. It will be a progressive process. Compared with two or three years ago, RWA has made great progress, with more asset categories and stronger regulatory support. It has been slowly breaking out. With clearer supervision and growing market demand, RWA will gradually become a mainstream track.
