RWA Market Analysis: Key Differences Between Dollar RWA and Other RWAs

Recently, despite the downturn in the cryptocurrency market, the topic of RWA (Real World Assets) has sparked widespread discussion. Some believe that RWA is a trillion-dollar market with huge potential, citing that USD stablecoins, as the earliest and most successful RWA application, have a market cap close to $300 billion, while a large number of off-chain assets such as real estate, stocks, and bonds have the potential to be brought on-chain.

However, this view is overly simplistic. In reality, RWA is not a homogeneous concept, and there are significant differences between USD RWA and other types of RWA, making direct comparisons difficult. If other RWAs want to achieve rapid development, in addition to learning from the experiences of USD RWA, they also need to find a development path that suits their own characteristics.

For investors, to capture investment opportunities in the RWA field, it is first necessary to clarify the differences between dollar RWA and other RWAs. This article will analyze the differences between the two from four perspectives, helping readers understand the current situation and challenges of non-monetary RWA, so as to seek potential investment opportunities in the RWA track.

1. Use Cases: Differences in Clarity of Requirements

Dollar RWA (such as certain stablecoins) is essentially a digital extension of the dollar, primarily serving the trading settlement, cross-border payments, and hedging needs of the cryptocurrency market. These application scenarios are characterized by high frequency and essential demand. For example, in some countries with severe inflation, dollar stablecoins have become an important tool for wealth protection, with strong user demand.

In contrast, other types of RWA, such as real estate tokenization, primarily aim to achieve global financing or enhance asset liquidity through blockchain technology. This type of demand is relatively low-frequency, and the user base is also quite limited. Participants in the cryptocurrency market generally prefer to invest their funds in native digital assets like Bitcoin, Ethereum, or popular tokens. Additionally, assets with better off-chain yields often already have mature financing channels, while those with poorer yields are the ones actively seeking to go on-chain, further limiting the market size.

Overall, USD RWA is more like a "supplier" providing liquidity to the crypto market, while other RWAs are more like "demanders" seeking liquidity. Despite the similar names, there are significant differences in essence. It is worth considering whether there are other non-monetary RWAs that can provide liquidity to the crypto market.

2. Compliance and Trust: Differences in Maturity

Regulatory Adaptability

Some USD stablecoins are issued by regulated institutions, and their reserves are regularly audited to comply with relevant currency regulations. Although some stablecoins have faced controversies, they ultimately gained market trust through deep cooperation with trading platforms. In contrast, the regulatory environment for other RWAs is much more complex. For example, real estate on-chain involves legal ownership verification and cross-border judicial issues, and there is currently a lack of unified standards, making rapid promotion difficult.

Trust Foundation

The core of RWA lies in transforming credit into tokens. USD RWA is anchored to the US dollar, backed by the national credit of the United States, which has a very high level of trust among users. Other RWAs rely on the credit of off-chain asset issuers; for example, tokenizing real estate requires authoritative institutions to prove ownership, otherwise users find it difficult to trust the correspondence between on-chain tokens and physical assets.

In short, the trust foundation of dollar RWA is unparalleled, and other RWAs are hard to match. Therefore, in the short term, RWA categories with lower compliance thresholds and easier trust establishment may be more worthy of attention.

3. Technical Implementation: Differences in Complexity

The technical logic of dollar stablecoins is relatively simple: it mainly involves on-chain issuance and redemption, with a low technical threshold. The U.S. dollar and U.S. Treasury bonds are standardized assets, with low auditing and tracking costs. Other RWA involves complex processes such as asset valuation, dividend distribution, and settlement, which also require oracles to verify off-chain data in real-time. The on-chain processes for different types of assets (such as real estate) vary significantly, with high compliance standards and technical implementation difficulties, leading to naturally slower development.

Therefore, non-standardized RWA needs to establish specific standards for each type of asset, making breakthroughs difficult in the short term. In contrast, RWA that are relatively easier to standardize, such as gold and bonds, may be more achievable.

4. Promotion Methods: Differences in Development Models

The rise of dollar RWA originates from user demand: Due to regulatory restrictions on purchasing cryptocurrencies with fiat currencies, trading platforms have launched dollar stablecoin trading pairs to address this issue. As the usage expands, it gradually evolves into a digital dollar and integrates into the DeFi and cross-border payment sectors. This is the result of market demand driven from the bottom up.

In contrast, real estate, stocks, and other RWAs are largely driven by large institutions, motivated by the need for financing or to enhance liquidity, which belongs to a top-down model. The participation of ordinary users and entrepreneurs is relatively low.

It can be seen that a bottom-up development approach is more in line with the characteristics of the cryptocurrency industry. RWA projects that focus more on community development may find it easier to gain user recognition.

Summary and Outlook

The success of the dollar RWA is inseparable from clear demand, high liquidity, a solid foundation of trust, low technical barriers, and a bottom-up market drive. In contrast, other RWAs face challenges such as ownership mapping issues, regulatory uncertainty, technical complexity, and resistance from traditional interests, leading to a slower development process.

In the future, if other RWAs want to achieve breakthroughs, they need to make efforts in at least the following directions:

1. Regulatory Cooperation: Promote the cross-border legal recognition of on-chain asset ownership.
2. Compliance framework: Establish detailed standards by asset class to accelerate the compliance process.
3. Infrastructure: Improve RWA oracles, issuance platforms, and cross-chain liquidity protocols.

For investors, it is important to recognize the difference between USD RWA and other RWAs, and to understand the current state of development in the RWA field.

First, it is important to pay attention to the development trends of the RWA compliance framework in the United States. Secondly, focus on those RWA assets that can easily achieve standardization and transparency (such as gold and bonds). Finally, more attention should currently be paid to infrastructure projects in the RWA field, such as RWA oracles, RWA issuance platforms, and RWA liquidity protocols.