Today, I met two friends offline, @ saisai1995 and @ CycleStudies. Although they were divided into two parts, the core topics discussed in both parts were similar, that is, whether RWA has space in the cryptocurrency market and whether it can drive the cryptocurrency market, including ETH, out of the predicament. I shared my views with everyone. Firstly, there is a fundamental difference between RWA and STO, with the most essential difference being that RWA requires a higher level of compliance, which is similar to the position of the SEC in the United States. RWA requires a large amount of assets to enter, and the main reason for a large amount of assets to enter is not because of real estate being put on the chain or raisins being put on the chain, but because compliant assets are put on the chain. In human terms, it refers to compliant assets issued by compliant platforms. As mentioned earlier when we talked about stablecoins, the hard acceptance of stablecoins is actually the basis of RWA, such as US bonds. Currently, even if the debt ceiling is raised, the ceiling that can be purchased can still be expected. However, if RWA based on US bonds is opened up, compliant stablecoins can be used directly to invest in US bonds through compliant "on chain brokers", which is equivalent to expanding DeFi's yield. Furthermore, DeFi and RWA were combined to issue RWAFi. For example, stablecoins were used to buy T-Bills (short-term US bonds), and on chain protocols (third parties) provided Staking (staking) based on the purchase of T-Bills for confirmation. Although the tokens were issued as collateral, they actually provided liquidity based on the chain for US bonds, and Staking's assets could be used as collateral to achieve nesting. This is the gameplay of financial assets. For another example, so far, spot ETFs in the United States hold over 1.2 million BTC in stock, but Bitcoin's spot has been available for purchase for many years. Why do we have to wait for the ETF to pass before buying? It is because of sufficient compliance, compliance can carry large assets, and compliance can protect BTC custody under the law. If there is theft or other situations, the custodian needs to compensate 100%, reducing the black forest rule in the cryptocurrency circle. So although we have seen various RWA projects, those that can obtain licenses are the ones that can ultimately come out. Only projects that have been approved can carry large funds and provide secure services. In addition to US bonds, high-quality corporate bonds are also the best targets for RWA. For example, bonds issued by MSTR are not something that ordinary investors can buy, but BlackRock can buy them. If BlackRock buys them at a 4% yield and then sells them on the chain at a 5% yield (2.5% MSTR yield+2.5% expected coin issuance yield, just an example, don't take it too seriously), it can achieve rights confirmation. I believe there will still be people buying them. Today, I gave an example. If LV or Herm è s is also selling their bonds on the blockchain through BlackRock or someone else, and providing VIP treatment for investors who buy more than $1 million, it is equivalent to confirming RWA's rights. Of course, strict KYC and AML are required here, but the most interesting thing is that RWAFi does not need them. RWAFi's institutions can complete KYC and AML in the name of the institution and then go to retail investors for financing and purchase, becoming RWAFi. This can become a very interesting business activity. In addition, some people say that RWAs have low liquidity, but this is actually wrong. The liquidity of RWA depends on what the underlying assets are. If it is really US Treasury bonds on the chain, what liquidity is still lacking? One of the best liquidity in the world is US Treasury bonds, right. But if you insist on putting coconut on the blockchain and Cambodian real estate on the blockchain, there is indeed not enough liquidity, and the reason for the lack of liquidity is that it is not compliant enough. PS: Please don't ask me what RWA assets I can buy. Either I need to ensure compliance, or I need to ensure that there are sufficient industry returns and cash flow income. Otherwise, buying anything has nothing to do with real RWA. PS2: Nowadays, many computing power on the blockchain is also a form of RWA. Although there may be some shortcomings in terms of compliance, if there are real profits to airdrop or repurchase equity, it may not be impossible. Using RWA as a part of income confirmation should be a viable form of RWAFi in the market. This tweet is sponsored by @ ApeXProtocolCN | Dex With Apex