The story is no longer sexy; applications have value.

Author: Liu Honglin

After watching Dr. Xiao Feng's speech "Starting from the Origin" at Wanwu Island, my first reaction was: this is a sharing session with extremely high information density and a wide range of content. It covers topics from RWA to PayFi, from stablecoin settlements to the collaboration between AI and blockchain. However, unlike some industry speeches that create excitement through "predicting hotspots" or "piling up concepts," it attempts to clarify the current dilemmas and opportunities in the industry using a language that is close to reality.

The story is no longer sexy; applications have value

One representative change mentioned in the speech is that when looking at the Web3 summit in Hong Kong now, the main forum has noticeably less discussion about Layer 1, cross-chain bridges, and modular blockchains. Instead, the focus has shifted to "application-side" themes like RWA, USDT payments, and PayFi.

This does not mean that technical routes are useless, but rather that the narrative structure of the industry has indeed changed: in the past decade, financing was driven by building protocol frameworks, but now, financiers are more concerned with whether a practical scenario can be realized within that framework and whether there are stable user behaviors and revenue models.

We have seen too many projects that become "useless after completing the protocol." Now, if you cannot provide a solution that connects to the real world, mere talk of "decentralization" is no longer enough to impress the market. At this point, discussing "returning to the origin" is meaningful—because if you have forgotten the mechanism that this system originally intended to replace, then it is even more impossible to talk about "replacement."

The industry has indeed reached a stage where it needs to look back and reconfirm its starting point—not in the slogan sense of "starting point," but rather, when you still want to continue developing blockchain products or businesses, what problem are you actually solving? For whom are you creating certain value?

The best current application of blockchain is still payments

When it comes to the real application of blockchain, the most convincing example remains the Yiwu scenario: a merchant selling T-shirts displays a USDT payment QR code, a customer from overseas scans the code, and the payment arrives instantly, allowing for shipping arrangements. This scenario may not seem high-end or supported by complex protocols, but it reflects a logic that has already been established—not "technology-driven," but rather a "business choice."

This does not involve price fluctuations, KYC thresholds, or the need to educate on how to use wallets. For merchants, it simply means "fast settlement, fixed exchange rate, and low fees"; for consumers, it means "can buy, can pay, and no mistakes." In other words, stablecoins in such transactions do not play an innovative role but serve as a minimum trust substitute and the most efficient value delivery. They are not transforming the payment system but filling the structural gaps that traditional systems cannot cover.

In the past, when we talked about Web3, we loved to discuss "reconstructing everything" and "breaking trust boundaries," but the reality is that most on-chain transactions do not require the reconstruction of social systems; they merely aim to reduce friction and improve efficiency in specific processes. Cross-border retail, remote outsourcing, and content creation revenue sharing—these "small and scattered" business activities are often expensive and slow to process through the banking system, and blockchain can serve as a "low-dependency, high-reliability" settlement foundation. This "structural clearing gap" is the real opportunity window for on-chain systems.

Therefore, in the future, blockchain may not capture all scenarios, but it can "replace the segment that no one is willing to take" in certain transaction structures. It may not necessarily disrupt SWIFT, but it can certainly create a high-frequency, stable channel system in localized edge systems. The real existence of such channels does not rely on public chain concepts or DAO organizations; it simply depends on a fundamental judgment: can your products and services actually solve my real problems and needs?

This is the true meaning of "blockchain landing."

Five classifications of tokens: distinguishing clearly determines compliance paths

What I found most valuable in Dr. Xiao's sharing was the classification of mainstream tokens into five categories, each with completely different value logic, use cases, and regulatory requirements, and they cannot replace each other.

The vast majority of Web3 projects, when issuing tokens, will claim that their project belongs to functional tokens, which to some extent has been misled by the direction of fundraising during Ethereum's early days. Ethereum is indeed a functional token, but its narrative and compliance logic may not necessarily apply to you.

The first category is reserve tokens, with Bitcoin as a typical representative. This type of asset emphasizes scarcity, immutability, and censorship resistance. It does not rely on an application ecosystem or trading logic for support but exists as a system-level value anchor. Its operation does not require permission, and its price is entirely determined by the market, leading to significant volatility. Some countries and institutions have begun to include it in asset allocation, but policy differences persist. If you want to discuss reserves, you must acknowledge that it is not suitable for payments and cannot explain cash flow; it is suitable for "strategic positions" but not for product design.

The second category is functional tokens, such as Ethereum and Solana's on-chain tokens. Their value comes from network usage—you need them to deploy contracts, stake for validation, and pay gas fees. The problem is that the premise for the value of these tokens is the genuine activity of the entire on-chain ecosystem. Without continuous development, users, and transactions, the price of functional tokens is essentially "hollow." What you need to do is not just package the tokens but truly build the system; the more users utilize it, the more stable the value of these tokens becomes.

The third category is payment tokens, which are the stablecoins we are familiar with, such as USDT and USDC. They are pegged to real-world currency units, issued by centralized institutions, and maintain market trust through custodial banks and auditing mechanisms. Their core value lies not in technology but in "settleable, low-threshold, high-efficiency," making them the most direct infrastructure on-chain. Currently, in cross-border e-commerce, personal remittances, and small B2C settlement scenarios, these tokens have already formed a practical usage scale. However, they are not free currencies, nor decentralized assets; they have always been a "financial tool" managed by a credit system. Regulatory attention is also increasing, and there will certainly be stronger licensing systems and usage thresholds in the future.

The fourth category is security tokens, which are currently the hottest topic of RWA (Real World Asset Tokenization). This type of token is often misunderstood: it is not as simple as "asset digitization" but a digital security that is fully embedded in the financial regulatory system. If you want to discuss RWA, you must clarify what the underlying assets are, who the custodian is, where the clearing mechanism is, and who bears the compliance disclosure. Many projects like to use concepts like "on-chain gold" or "tokenized real estate" for packaging, but the reality is that without a clear legal structure and compliance path, these tokens are essentially risk certificates that cannot withstand scrutiny.

The fifth category is entertainment tokens, such as meme coins. They usually lack a stable anchor and do not advocate functionality, relying entirely on community atmosphere and dissemination heat. Once the hype fades, their value can quickly drop to zero. These tokens can exist and do have their market foundation, but the key is not to misinterpret their role. If a token is driven by emotion, it cannot be expected to bear the responsibilities of a financial instrument; if it is for cultural narrative, it should not promise value preservation or appreciation. Once identities are confused, problems will arise.

Different token types correspond to completely different regulatory logic, expectation management, and product structures. Whatever type you are dealing with, you must respect its boundaries. If you are discussing a securities-based revenue model but label it as a payment token, or if you clearly have a meme coin but present it as a reserve asset, it not only makes no sense but is also doomed to go nowhere. Regulation is changing, the market is changing, and everyone's patience with tokens is changing. Clarifying who you are is far more important than presenting a "new model."

RWA: Going on-chain is not the focus; compliance is key.

Recently, RWA has become one of the hottest topics, so Dr. Xiao devoted a significant portion of his speech to it. If I were to summarize it in one sentence, it would be: the RWA projects that can truly succeed are not those with the strongest technical capabilities, but those that can clearly articulate their legal structure, asset ownership, and clearing mechanisms.

The market does not trust whether you can write a logic on-chain; it trusts whether you have transplanted the "trust elements of financial assets" from the real world onto the chain. Take gold tokenization as an example: if a miner or gold refinery stands up and says, "I produce this much gold every day, and I will issue tokens to you," it is certainly possible to write a logic on-chain. But the question is, why should the market trust the token you issue?

This is not a question of technical capability but rather that this model lacks three critical elements:

• Ownership verification mechanism: Who will prove that the gold you claim is real and belongs to you? Is there an ownership certificate? Is there a third-party custodian?

• Custodial arrangements: Where is the gold stored? Who is safeguarding it? Is there a legal disposal mechanism? Can it be seized?

• Legal structure: In the event of payment, clearing, or default issues, can token holders assert their rights? In which judicial system can they assert them? According to which contract?

We now see many so-called "RWA projects," but in the end, we find that either they cannot pass ownership verification, or they lack a clearing pathway, or they cannot penetrate compliance. The RWA that can truly succeed in the future must have access points to traditional financial structures, a legal-level closed loop, and efficiency optimization in on-chain structures. None of these can be missing.

Thus, you will find that the projects that are truly advancing the furthest in the direction of RWA almost all have licensed financial institutions backing them. For example, BlackRock is tokenizing short-term bond funds, with custodial banks, fund disclosures, and regulatory reports; the companies in Hong Kong that are piloting RWA are essentially starting from traditional financial products rather than directly "on-chaining assets." The entry point for RWA is actually traditional financial institutions. Either you cooperate directly with them, or you must do better in legal structure than they do.

The only gap that entrepreneurs can cut into is that the structural design is more efficient than traditional methods, rather than outsourcing trust in a rough manner. If a project only emphasizes "assets on-chain" but does not address ownership, compliance, and circulation, that is not RWA; it is a "renamed crowdfunding platform."

Ethereum "has lost China," but the problem is not just that

Dr. Xiao Feng mentioned in his speech: "Ethereum has fallen to this point because you have lost China." This statement is quite heavy and clearly reflects his personal observations as an early participant. However, from a more structural perspective, this statement may only be half true—Ethereum has indeed lost China, but its problems go beyond that; and "China" itself is no longer a single variable.

Looking back over the past few years, there have indeed been many Chinese developers among the earliest batch of Ethereum developers, node operators, and DApp experimenters. Since 2015, local institutions, including the Wanxiang Group, have continuously supported Ethereum's technical evangelism, fundraising, and ecosystem building. In the early years, the activity level of the Ethereum China community was even one of the highest in the world. However, after 2017, as domestic regulations tightened, ICOs were restricted, trading platforms were reorganized, and developer activities shrank, Ethereum's public space in China was rapidly compressed. It is hard to say that this did not have an impact, but you cannot say that its path dilemma is entirely due to this.

The more critical issue is Ethereum's own system choices and evolutionary path. Over the past few years, Ethereum has undergone a series of changes, including the PoS transition, the explosion of the L2 ecosystem, MEV games, and governance decentralization. However, at the same time, the overall usability and threshold of the network have also increased. Gas costs, development complexity, and protocol fragmentation are not unique to the Chinese market but are common anxieties among developers worldwide.

Let's talk about the issue of "returning to China." Today, when we discuss this problem, we cannot only look at it from an emotional perspective, nor can we focus solely on the policy atmosphere. It is not impossible for Vitalik to return to China to discuss technology, hold workshops, and invest in projects, but the premise is that this system must genuinely serve the real needs of a group of Chinese entrepreneurs. In other words, if Ethereum at this stage is only about "Staking is king" and "narrative arbitrage," rather than being a development platform that can be deployed at low cost, compliant, and generate revenue, then no matter how much you talk about "the return of Chinese developers," it will only be symbolic. You could say that China once missed the window to evolve alongside Ethereum, but Ethereum has also, in certain dimensions, lost a crucial feedback loop.

So ultimately, it is not about "who left whom," but whether this system still has "practical value" and "commercial entry points." Developers will choose chains that can be used, frameworks that can issue tokens, and models that can generate profits; this is the reality. The vitality of a technological ecosystem does not rely on sentiment or past achievements; it depends on whether it can still run business, connect scenarios, and meet expectations.

Summary by Lawyer Mankun

The reason this speech is worth documenting is not because it mentioned any "latest" technological trends, but because it helped everyone organize the logical path of the industry.

When the narrative recedes and arbitrage windows narrow, what remains is often not the most lively parts, but those that are closest to reality and most certain. What truly transcends cycles is not abstract idealism, but those projects that can fit into institutional gaps, run through transaction loops, and continuously improve system efficiency. In this sense, blockchain technology is not about creating a parallel world, but about repairing, connecting, and replacing those corners that the original systems cannot accommodate.

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