Author: LateNeverr1

Compiled by: Deep Tides TechFlow

Started mining in 2014 and transitioned to ETH after it launched in 2015. Since then, I have experienced everything: the DAO hack event, the ICO frenzy, the summer of DeFi, the collapse of Terra, Celsius, FTX.

After going through enough cycles, you no longer get excited about "new" narratives. Most of them come back with a different name. Liquidity mining has turned into rewards mining, and ICO has become IDO.

RWA feels different, and I don't say that lightly.

It is not just another way to trade capital on-chain, but rather it brings the yields of assets that have never been on-chain onto the chain. This does not mean it solves all problems; many projects are still just vapor, but the support behind this track is much more solid than most project's PPTs.

Things I will check before encountering any RWA project:

• Before the tokens appear, is there already a lending business in existence? The founders of Maple have a traditional credit background, and 8lends was launched on a platform that had been doing offline P2P lending for several years. These are much more important to me than token economics or headline APR.
• Is the situation of defaults explained clearly, or is it being covered up? The Goldfinch incident in 2023 is a lesson for the entire sector. Real credit risk will eventually surface, and anyone pretending it won't happen is not worth your time.

I maintain small positions in several projects just to observe their performance. Most of my holdings are still ETH and validator nodes.

If you're a beginner, there is one thing you need to understand:

The over-collateralized lending like Aave is instant liquidation, while RWA lending recovers slowly from real assets and may take months. The risks of these two are completely different.

In the end, this is largely just moving old credit work to a new track. The hard part has never been the blockchain.

Selected replies from the comment section:

Careful_keklin: I entered the market in 2017, and after the Celsius incident, my criteria for screening projects are similar to yours. The most important point for me is whether the default scenarios are documented clearly somewhere or are glossed over. Most RWA protocols I checked in 2022-23 cannot even explain their own recovery processes, which speaks volumes. The outcome of Goldfinch is the inevitability of this model, not an exception.

be_boss: I completely agree, especially with the test of "Is there real business before the token?" In the ICO era, it relied on white papers, during the summer of DeFi it relied on APY, and in 2022 it relied on "we are compliant." The flagship rhetoric of each cycle looks rigorous until the next cycle starts. After each shuffle, the only teams still standing are those who have run credit business off-chain before issuing tokens. Goldfinch is particularly right about this—defaults are the real stress test, not TVL. The response of a team the first time something goes wrong speaks more about the situation than a year of dashboard data. "Old credit on a new track," that’s spot on; contracts have never been the difficult part.