After discussing the perspectives of the East and West on the market from the first level in the previous article, today I happen to take advantage of YZi Labs' official investment in Plume Network, an RWA platform, to talk about the recent changes in the RWA track that I have observed This matter needs to be divided into four parts 1. Does RWA really have application scenarios, or PMF 2. Which RWA assets are suitable for on chain and which are not What were the past solutions and what are the current solutions 4. Have you noticed the wind direction of RWA in recent months Let's first talk about whether 1-RWA really has application scenarios, or PMF - (excluding the stablecoin track on US bonds, Usual, MKR, etc. have already found PMF). Taking the US stock market as an example, this is the most noisy category on Twi. Many people think that listing on the US stock market is unnecessary, and they really want to invest in the US stock market through their own channels. Any target on the chain has greater volatility than the US stock market, so there is no need to play stocks on the chain I have a different opinion on this. Personally, I think the US stock market has its significance on the chain 1. From a channel perspective - Indeed, most of the big shots on A8 and A9 use securities platforms such as Futu and FirstTrade, as well as diversified investments in currencies, stocks, gold, and more. But I believe that most retail investors in the industry do not have US stock accounts. On chain US stock trading can at least open up their purchasing channels without any barriers. From another perspective, the total market value of stablecoins such as USDT/USDC is increasing, which is another way for the US dollar hegemony to spread relative to traditional finance. If Crypto's smart wallet with stable currency+Payfi+like Alipay experience goes to Mass Adoption one day, do you think Americans are willing to accept American stocks from all over the world? Most people in other countries in the world prefer to open accounts with various banks and securities companies to buy half alive stocks in their own countries for a few days, or simply invest in the seven sisters of the world's largest economy with one click like Taobao Shopping? 2. From the perspective of application scenarios, imagine a case where, as a young player, you have been making a huge profit of 100000 US dollars in the past few days by rushing towards Mubarak. You know that Tesla has recently halved, which is a good opportunity to buy at the bottom, and then you want to exchange these 100000 US dollars for Tesla stock. Even if you have a US stock account, you have to first convert the 100000 U OTC into fiat currency, which is then sent to the broker's account through the bank and bought from the broker. This process usually takes 3-5 working days (I bought US stocks through FirstTrade in Australia before I started trading Bitcoin in 2017, and it took 4-5 days to transfer them via Swift alone, with a handling fee of several tens of dollars). If one day your Telsta rises and you want to sell and exchange for BTC or U, this process will have to be repeated again... Imagine if there are US stocks on the chain, the U seconds you earn from Meme will be exchanged for Tesla, and the reduction in friction costs is really not a big deal. Half a point, but a tenfold or hundredfold improvement in experience Then let's talk about 2- which RWA assets are suitable for on chain listing Similarly, T-Bill, which has already proven itself, is not under discussion. Other RWA assets actually depend on who the specific target audience is For the To C end, stocks are undoubtedly the most suitable. Most retail investors have probably never been exposed to first tier private equity. Even if you tokenize the equity of a non listed company, few people can understand, buy, and hold it for a long time. Private credit collateral like those on Centrifuge, such as bridge loans in the real estate market and loans for corporate accounts receivable, are also not suitable for To C. The only thing that the vast majority of C-end users are familiar with is probably stocks. To C, for more scenarios, it should be a process from 0 to 1 to connect an asset through the chain for users who did not have a channel to purchase it before For the To B end, there are many things that can be tokenized, but compared to the To C from 0 to 1, the To B end should be more about reducing friction from 1 to 100. Just as primary private equity is already circulating between some institutions and high net worth investors, the bridge loan collateral placed on Centrifuge is likely to be able to lend money to banks, but this circulation process is relatively cumbersome and has high friction. Putting it on the chain, just like Payfi and Swift, can greatly enhance user experience and flow speed. Speaking of which, I remember talking about an RWA project last year, whose parent company is a top ranked asset management institution in the United States. They plan to issue tokens based on the primary equity of their clients on their asset management platform, such as Musk's SpaceX, on their own trading platform. This way, tokens can be easily circulated and exchanged, and ultimately settled in one go when SpaceX goes public. So for B, in addition to targeting trading users who are limited by institutions and enterprises, the issuing entities are also relatively restricted, just like the example above. Unless you already manage a large amount of SpaceX's equity in your own hands, you are simply an STO or RWA platform. If you want to attract SpaceX equity holders to issue tokens representing SpaceX's equity, there will be much more friction involved in resource cooperation, legal terms, and other aspects There are many intermediate states, both To C and To B, such as IP on chain like Story Protocol, royalties from a certain novel, box office revenue of a certain movie, sales of a certain game, etc. tokenize these things. It seems that we are still in the early exploration stage and need to try and verify them one by one. Like the influence tokenize, FT failed, while Kaito was relatively successful. Celebrity Time Tokenize, http://Time.Fun After a few days of fire, it disappeared without a trace... These things need to be taken slowly What are the past solutions and what are the current solutions? Taking the US stock market as an example - in the past, the solution was mainly based on synthetic assets, represented by SNX, Terra's Mirror, and GNS At present, this path has been largely counterfeited, and the three platforms mentioned above have already taken down the synthetic US stock assets they previously listed. There are two reasons for this. Firstly, people are not very interested in "fake assets" synthesized from stablecoins or local currencies (such as SNX). You can see from the comparison of the volume of BTC, WBTC, and SNX's SBTC that one can see one thing or two. Synthetic assets, to be honest, are not as reassuring as "mapped assets" like WBTC. Secondly, at that time, Sec constantly checked water meters. Although synthetic assets were fake, Sec didn't need a reason to check you, so it was better to do less than more. These platforms also took down these synthetic US stocks one after another Now that Trump has taken office and the Sec chairman has been replaced, the regulation in this area is significantly better than in the previous two years. There are currently two plans for the new US stock listing One is to follow the traditional compliance broker dealer route, where the moment a user buys tokenized stocks on the chain, it triggers the corresponding actions of the off chain compliance broker in the US stock market. Essentially, orders placed on Robinhood are bought by Citadel on behalf of them in the stock market. The advantage is that the stocks you buy are 'real stocks', or at least they are backed by this broker 1:1, which is somewhat similar to WBTC to BTC. The downside is that trading hours completely follow the stock market, and you can't do 24x7 like Crypto. You also need to establish trust in this broker or platform. Another issue is that when selling, a Taxation Event will be triggered, and US citizens may need to submit tax related forms. Non US citizens also need to do KYC or similar procedures, which can be quite troublesome The second is Ondo Global Market's approach. After reviewing their documentation, they originally intended to follow the broker dealer route mentioned above, but later changed to a stablecoin like approach, allowing them to collaborate or authorize issuers to directly issue tokenized stocks (similar to Tether issuing USDT and Circle issuing USDC). The feeling is that the advantage is more flexibility, and it is possible to get rid of the trading time restrictions of the US stock market, and ultimately settle through the issuer at a certain time. The downside is that it is likely only applicable to Non US users and cannot be used by American users. Another issue is whether there will be different CAs for the same stock issued by different issuers (just like how different USDCs on a new chain are incompatible with each other). These specific details have not been documented, as the product will not be released until next year Finally, RWA platforms like Plume feel more like a framework, which includes KYC/AML, data storage/execution, consensus, ZKTLS verification, and more. In theory, partner institutions can issue various tokenized RWA assets here. This brings us back to the previous topic of "which assets are suitable for on chain" and will not be further elaborated Lastly, do you have any perception of the wind direction in the past few months for 4 RWA If you pay attention to observation, the wind in RWA has actually been blowing quite fiercely in the past two months. Let me give you a few "news" that I have observed 1. As mentioned above, Ondo plans to launch Ondo Global Market, an on chain stock market, by the end of the year or next year. Additionally, Ondo has recently become very close to Trump's WLFI and will collaborate with them Sui has also been hugging WLFI's thigh recently 3. Frax actively embraces Cedef and recently launched frxUSD, which is a collaboration with BlackRock+Superstate Ethena's newly released product Converge today focuses on one of the two most important scenarios they consider for blockchain - Storage and settlement for stablecoins and tokenized assets AAVE plans to launch a new coin called Horizen, which has caused a stir in the community. Stani personally came forward to clarify - "The Horizen plan aims to make up for Aave's current missing RWA business segment, and this plan is expected to achieve a revenue reversal of Aave's current business line in 5 years The Financial Services Commission of South Korea will release a release in February 2025, intending to allow corporate entities to engage in virtual asset trading in stages. I learned from my friends in the Korean industry that there is a possibility of restarting the STO (RWA's previous cycle name) plan in Korea. Do you think that allowing 'corporate entities to trade virtual assets' is not necessarily for your company to speculate on currency, but rather to tokenize some real financial assets into' virtual assets'? Fortunately, it is designed for circulation between companies YZi Labs announced today that it has invested in the recently popular Plume Network RWA platform The Momentum formed by these messages cannot be ignored, so my personal view on the main track of the next Circle is currently PayFI+RWA+Web2.5 Consumer APP. As for AI+Crypto, it can only be said that there is hope and we are still discussing and observing. After I finish writing the next article "Some Worth Talking About ETH and Solana", I will write a separate article on my recent thoughts on AI+Crypto as the conclusion of the fourth part of this collection