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Original title: "IOSG Weekly Brief|Ethereum RWA Explosion: Regulatory Changes and New Growth Engine #278" Original article by Sam, IOSG Ventures TL; DR: Take the stablecoin bill as an introduction, introduce the recent public attention and discussion on RWA, and then start talking about the RWA data analysis on Ethereum (zksync can be used as a highlight) What impact will the emergence of Etherealize have on Ethereum Ethereum's stablecoin issuance and DeFi have always had a strong moat, combined with the new policy of the United States, can traditional finance and DeFi be organically linked through RWA, as the most credible and decentralized blockchain, We continue to be bullish on where Ethereum's points are The bill catalyzes and the market is concerned Against the backdrop of a rapidly evolving traditional financial and regulatory environment, the recent passage of the GENIUS Act has reignited interest in RWAs. In addition to stablecoins and major legislative developments, the RWA space has quietly reached a number of important milestones: continued strong growth and a series of notable breakthroughs – such as Kraken's launch of tokenized stocks and ETFs, Robinhood's proposal to the U.S. Securities and Exchange Commission (SEC) to give token assets the same status as traditional assets, and Centrifuge's $400 million decentralized JTRSY fund on Solana. At a time when market attention is at an all-time high and the wider adoption of traditional finance is just around the corner, it's important to take a deep look at the current RWA landscape – and especially the status of leading platforms like Ethereum. Ethereum-based RWA has shown impressive month-on-month growth, often maintaining double-digit highs; Growth in 2025 will accelerate even faster than in 2024, when it was a single-digit month. Another key factor driving this momentum is Etherealize as a catalyst for regulatory development, and the Ethereum Foundation's strategic focus on RWA. At this critical juncture, this article will take a deep dive into the evolution of RWA on Ethereum and its Layer-2 network. RWA Ecosystem Map, IOSG Data analysis: A panoramic view of Ethereum RWA growth The data clearly shows that Ethereum's RWA value has entered a clear growth cycle. Looking at the total value of Ethereum's non-stablecoin RWA, the long-term trajectory is striking – it has remained in the $1 billion to $2 billion range for many years until it enters a phase of rapid growth in April 2024. This growth momentum continues to accelerate through 2025. The core driver is BlackRock's BUIDL fund, which is now worth $2.7 billion. As shown by the orange trend line, BUIDL itself has shown parabolic growth since March 2025, driving the overall expansion of the Ethereum RWA ecosystem. RWA.xyz, IOSG By asset class (excluding stablecoins), the market capitalization of real-world assets (RWAs) on Ethereum is highly concentrated in two main categories: Treasury projects (75.9%) and commodities (dominated by gold, 20.3%), with other categories accounting for a small proportion. In contrast, private credit accounts for the highest proportion of RWA market capitalization in the overall crypto market (57.4%), followed by Treasury projects (30.9%). RWA.xyz, IOSG RWA.xyz, IOSG Further focusing on the top assets of Ethereum RWA, the pie chart clearly reveals the dominance of BUIDL. Looking back a year ago, the comparison shows that BUIDL was comparable in scale to PAXG, XAUT and other products, and now it has formed a significant surpass. Although the composition of the top 10 projects is basically stable, the growth rate of treasury bond products is significantly ahead of that of gold products, and the market share continues to expand. RWA.xyz, IOSG RWA.xyz, IOSG From the perspective of protocols, the current leaders are mainly stablecoin issuers - the top four protocols are Tether, Circle, MakerDAO (Dai stablecoin system) and Ethena. It is worth noting that the total value of the securitization protocol Securitize has significantly surpassed some stablecoin projects such as FDUSD and USDC, and has jumped to the top. Other securities protocols in the top 10 include Ondo and Superstate. RWA.xyz, IOSG Focusing on the month-to-date data for the beginning of 2024, the wave of growth began in April 2024 and achieved a staggering 26.6% increase in the month – a quarter of the total incremental increase in Ethereum RWA in a single month. This momentum continued into the next three months, and although it slowed slightly between August and December 2024, the network still maintained an increase of about $200 million per month (about 5% QoQ and over 60% annualized). Growth exploded again in January 2025, surging 33.2% month-on-month. After a brief correction in February, Ethereum maintained double-digit growth for four consecutive months, with month-on-month growth exceeding the 20% mark in April and May. RWA.xyz, IOSG BUIDL With BUIDL's rapid rise to become the largest project in the Ethereum RWA ecosystem by market capitalization, a detailed understanding of its growth path is crucial. The month-on-month growth chart reveals that the indicator remained relatively stable through March 2025 and then showed an explosive jump in March 2025. However, the latest May data shows that the ultra-fast growth trend has slowed slightly, but there is still an increase of $210 million, an increase of 8.38% month-on-month. Developments in the coming months are a key window to watch – we need to track whether growth continues to slow or continues to grow explosively. RWA.xyz, IOSG BUIDL's explosive growth stems from a number of factors. The growth was largely driven by institutional demand, and the competitiveness of the products was a key driver of success: 24/7 operations, faster settlement than traditional finance, and high yields within a compliance framework. Notably, DeFi integrations are realizing synergies and unlocking more utility, such as Ethena Labs' USDtb product, which has 90% of its reserves backed by BUIDL. At the same time, the recognition of BUIDL as a high-quality collateral continues to grow, and the launch of sBUIDL by Securitize further unlocks the DeFi integration scene. BUIDL's asset distribution is highly concentrated: about 93% is concentrated on the Ethereum mainnet, which is difficult for other ecosystems to achieve. At the same time, as AUM continues to expand, BUIDL's monthly dividend has reached a new high, reaching $4.17 million in March 2025 and soaring to $7.9 million in May. BUIDL distribution, screenshot from RWA.xyz Stablecoins Given the structural impact that the GENIUS Act will have on the regulatory framework for stablecoins, it is important to systematically examine the trajectory of the Ethereum stablecoin market. Since 2024, the sector's total market capitalization has continued to show a solid upward trend, maintaining a resilient monthly growth pace, albeit at a slightly slower pace than other RWA segments. RWA.xyz, IOSG Among the smaller projects (< $500 million), most of them experienced a sustained contraction in early 2024. However, towards the end of 2024, the market value of most projects continues to rise, and the market value of GHO, M, USDO continues to grow. At the same time, a number of new stablecoin projects have emerged across the 50 M market capitalization, the Ethereum stablecoin ecosystem projects are more diverse, and the small-capitalization projects have continued to prosper since 2025. Medium-sized projects ($5-$5 billion) will only have FDUSD and FRAX in 2024; BUSD plummeted from $1 billion in January 2024 to less than $500 million in March 2024 due to the termination of the offering. However, in 2025, USD 0 and PYUSD will both break through the $500 million threshold, and mid-sized stablecoins will be more diversified. The top stablecoins (> $5 billion) continue to be dominated by USDT and USDC: USDT stabilized at $40 billion for most of 2024, jumped to $70 billion in early December, and then gradually stabilized until the recent market cap decline; USDC has steadily grown from $22 billion in January 2024 to $38 billion in May 2025. At the beginning of 2025, USDS and USDe both exceeded $5 billion, but USDT and USDC are still far ahead in terms of market share. RWA.xyz, IOSG USDT and USDC occupy an absolute dominance, which directly affects the entire stablecoin ecosystem. The growth in November 2024 is particularly noteworthy: USDT surged 30.16% month-on-month and USDC grew by 16.31%. This spike was followed by months of growth, with USDC growing more solidly in subsequent months, all of which grew by more than 5% per month. According to the issuer, Tether attributed this to "the influx of collateral assets on exchanges and institutional desks in response to the expected surge in trading volumes"; Circle highlighted that "USDC circulation increased by 78% year-on-year... In addition to user demand, it is also due to the rebuilding of market confidence and the improvement of the standard system driven by the regulatory rules of emerging stablecoins." However, there has been a clear shift in market momentum recently – USDT on the Ethereum chain has stalled in the past four months, and USDC has declined for the first time in May 2025 after months of growth. This phenomenon may signal that the market is moving towards a new phase of the cycle. RWA.xyz, IOSG L2 Ecology In the broader RWA ecosystem, Ethereum retains absolute dominance with a market share of 59.23% (excluding stablecoins), but it still faces key challenges. Screenshot from RWA.xyz Notably, zkSync jumped to second place with the Tradable project's single driver, while Stellar relied entirely on the Franklin Templeton BENJI Fund ($455.9 million) in third place. Although the RWA book data of the two public chains is impressive, its structural shortcomings cannot be ignored: lack of asset diversity and dependence on a single project. BENJI's Composition, screenshot from RWA.xyz As zkSync and Stellar demonstrate, most L2 networks are currently facing the same challenge of insufficient biodiversity, with their RWA market value highly dependent on 1-2 core projects. For example, Arbitrum: Of the total market capitalization of US$256 million, BENJI contributed US$111.9 million (accounting for 43.7%), and Spiko accounted for US$93.5 million (accounting for 36.5%), with a total monopoly of more than 80% of the market capitalization; Polygon also shows a similar distribution pattern, with core market capitalization sources concentrated in two major projects: Spiko and Mercado Bitcoin. Spiko's Composition, screenshot from RWA.xyz Expanding the horizon to the entire L2 ecosystem, the RWA value and market share of each network are significantly differentiated (see the table below). Except for zkSync, only Polygon and Arbitrum have formed a substantial scale effect, and the rest of L2 is still in the early stage of development. The success of Polygon and Arbitrum is highly dependent on a single driver, Spiko, which contributes about one-third of the total RWA value in both networks. RWA.xyz, IOSG Looking at the evolution of the overall RWA market value of the Layer-2 network, its growth cycle is not fully synchronized with that of Layer-1: the growth will not start in mid-2024. zkSync's integration into Tradable has resulted in a $2 billion market cap increase. But even when this impact is taken out, the L2 growth trend is still here – L2 networks have continued to grow by double-digit quarter-over-quarter since September 2024. In contrast, in the previous phase, RWA expansion has always been sporadic and weak. In summary, the end of 2024 marks a shift in the development of L2 ecosystem RWA: entering a strong growth cycle. RWA.xyz, IOSG Etherealize: The new engine for Ethereum RWA As a key force driving Ethereum RWA adoption, Etherealize was born out of a deep insight into the bottleneck of the industry: when protocol layer breakthroughs fail to translate effectively into physical applications, institutional engagement often stalls. To this end, Etherealize systematically bridges the gap between technological breakthroughs and practical implementation by developing customized tools, building a network of strategic partnerships, and being deeply involved in policymaking. At present, Etherealize mainly promotes the popularization and application of Ethereum RWA through market education and content dissemination, as well as data panel tools. On the one hand, the team has written and published a number of in-depth articles about Etherealize and the Ethereum ecosystem, and participated in a number of well-known podcasts and interviews with traditional financial and crypto media, making a big impact through dialogues with industry opinion leaders. On the other hand, Etherealize actively communicates with regulators, and has successfully held a number of seminars and symposia on digital asset compliance and regulatory issues, and continues to put forward constructive solutions on how to standardize and promote the RWA process. Recently, Etherealize founder Vivek Raman was invited to present at the House Financial Services Committee hearing on "American Innovation and the Future of Digital Assets", continuing to expand Ethrealize's important role in regulatory interactions. At present, Etherealize has only launched a data dashboard on the product side for market education and promotion, but the team explains in the roadmap that it will develop SDKs for institutions, etc., and is recruiting founding engineers, so it is worth continuing to pay attention to Ethereal's progress in promoting RWA products. In the next roadmap, Q2 2025 will focus on the release of an institutional-grade SDK that combines a managed interface, compliance process, and gas optimization module to help banks and asset managers build a secure and auditable issuance process, significantly lowering the barrier to entry for traditional financial institutions to participate in Ethereum RWA. On top of this, a pilot project of Noir-based enterprise wallets will be launched in the third quarter to ensure that privacy protection reaches the enterprise level and meet the confidentiality needs of RWA transactions through the "privacy by default" mechanism. In the fourth quarter, the team will focus on the international market: the team plans to establish cooperation with Singapore's Digital Port and Switzerland's Crypto Valley Association to localize product functions and compliance with the regulatory environment and market needs in Asia Pacific and Europe. At the same time, in order to reduce the friction between different Layer‐ 2 networks, the team will take the lead in promoting the standardization of rollups, and build a unified cross-link interface to realize the free flow of assets, and then integrate RWA under the Ethereum ecosystem to enhance interoperability. Finally, in order to bridge the gap between traditional financial institutions and blockchain technology, the team will continue to adhere to the 24×7 support model, providing end-to-end professional services from legal document preparation to smart contract deployment. Ethereum RWA strategic moat First-mover advantage The decision-making process of traditional financial institutions is different from that of DeFi: regulatory scrutiny, pilot verification, and proof of concept (PoC) can significantly extend the deployment cycle. At the beginning of the project, the institution will adopt a cautious strategy and start expansion after the pilot results are verified. Although Ethereum's head project BUIDL dominates, it still takes nearly a year of accumulation before ushering in explosive growth. Ethereum's core strength lies in its ecological first-mover status, which has completed experimental collaborations with a number of top financial institutions long before the rise of the RWA wave. Ecological accumulation In addition to institutional cooperation, the maturity of the RWA ecosystem requires long-term precipitation. Ethereum to maintain leadership: Breadth: Covering diversified asset issuers and depth of the agreement structure: The market value of many projects has exceeded the order of US$1 billion, forming a scale effect The integration of traditional finance and DeFi continues to deepen. Most RWA projects prioritize the deployment of the Ethereum mainnet and directly use the Ethereum ecosystem's mature decentralized lending, market making, and derivatives protocols to improve capital efficiency. Recent cases include Ethena's adoption of BUIDL as a 90% reserve asset for the USDtb stablecoin. The GENIUS Act's policy of forcing stablecoin reserves to tilt toward U.S. Treasuries is promoting the integration of U.S. Treasuries, on-chain Treasury products, and stablecoin protocols. At the same time, major DeFi protocols incorporate BUIDL into their core collateral systems. Ethereum maintains an advantage in RWA liquidity: the number of active addresses, token types, and liquidity depth are all leading. Although there is uncertainty in the collaboration mechanism of the Layer 2 ecosystem, it is still the core path for scaling. safe Security is the cornerstone of the RWA ecosystem, and smart contract technology maturity is key. As RWA projects become more logically complex, the requirements for smart contracts are also higher. In May 2025, the Sui on-chain Cetus protocol was hacked ($223 million in losses), exposing the lethal risks of oracle manipulation and contract vulnerabilities. Despite the $162 million recovered from the on-chain freeze, this type of passive contingency mechanism highlights the limitations of risk control. In contrast, Ethereum's core strengths lie in a more decentralized architecture, a track record of reliable operation, and a thriving developer ecosystem. Technological evolution The Ethereum technology roadmap will accelerate RWA development. First of all, improve L1 performance to bridge the core gap with high-performance public chains. Second, promote L2 interoperability and focus on the application layer, opening up the docking channel between traditional finance and on-chain RWA. At the same time, Ethereum's privacy roadmap strengthens security standards and privacy protection mechanisms (such as integrating privacy tools into mainstream wallets, simplifying the censorship-resistant transaction process, etc.) to provide protection for RWA transactions and build an asset confidentiality system that meets institutional-level requirements. The Genius Act: A double-edged sword for regulation The new stablecoin regulatory system not only strengthens centralized control, but also injects regulatory certainty into the market. Currently, Section 4(6) of the Act does not explicitly allow stablecoin issuers to pay interest to holders, and although the market may spawn alternatives, this issue remains uncertain. At the same time, the Genius Act requires stablecoin reserves to be 1:1 for highly liquid safe assets such as U.S. dollars or U.S. Treasuries. The USDC stablecoin's reserves have been allocated almost entirely to U.S. Treasury bonds, in line with the new rules. Other major issuers, however, will have to completely restructure their reserves or risk being forced to exit the US market. This will have a direct impact on specific designs such as algorithmic stablecoins and Delta Neutral stablecoins. By anchoring collateral to U.S. sovereign credit, regulators gain greater intervening power (and simultaneously drive demand for Treasuries), but loopholes in legislation can create new systemic risks – as the Commodity Futures Modernization Act of 2000 (CFMA) has taught in history. On the positive side, the bill's clear compliance boundaries could accelerate institutional entry: banks and asset managers can meet the regulatory certainty they have long seeked. More large companies and institutions will be licensed to issue stablecoins. For example, the joint crypto stablecoin being discussed by several major U.S. banks, or Meta's reconsideration of the possibility of launching a new stablecoin project. Ethereum's Resilience: A Diverse Ecosystem The resilience of the Ethereum stablecoin ecosystem stems from its diversity. Since the beginning of 2025, the market value of many stablecoin issuers has increased significantly, and many new stablecoin projects have emerged, including rich design dimensions: multiple collateral structures, yield strategies, and governance models. The GENIUS Act imposes a 1:1 reserve requirement on Treasury bonds, putting compliance pressure on most projects, forcing them to choose between restructuring their reserves or temporarily withdrawing from the U.S. market. The resilience of the Ethereum ecosystem sets it apart from public chains dominated by a small number of stablecoin/RWA projects – which reduces the risk of homogenization after the project is generally regulated. The diversified structure forms a natural risk isolation mechanism: even if some stablecoins adjust their strategies due to compliance requirements, there will still be projects that continue to promote innovation and maintain a decentralized core, and will not fully become part of the U.S. debt system. However, subsequent developments will also depend on the strategic positioning of the Ethereum Foundation and Etheralize. epilogue Ethereum's RWA ecosystem has seen explosive growth over the past few months. Among them, BUIDL is the strongest driving force for the development of the RWA in the near future, while a large number of treasury bond projects have also shown strong growth momentum. Behind the scale expansion, treasury bond projects have increasingly shown a trend of merging with Ethereum's existing DeFi and RWA ecosystems, such as BUIDL as collateral for lending or stablecoin projects. Ethereum still has a significant advantage in the RWA space. Whether it is the first-mover time advantage, security, deep ecological precipitation, grand technology roadmap update, or the strong leadership of BUIDL, the diversification of Layer 2 and the deep empowerment of Etherealize, these factors have jointly built the core barriers of Ethereum in the wave of traditional financial chain. With the promotion of the Genius Act, the integration of US dollar credit into the on-chain world is accelerating. This not only brings a larger influx of funds, creating more revenue and growth opportunities, but also poses a challenge: it makes the underlying support of the Ethereum financial system more biased towards fiat currency (USD), thus introducing fiat credit risk and making the on-chain settlement system an extension of US dollar hegemony; The on-chain world is no longer an independent parallel financial system. In the context of this explosive growth, there are also hidden concerns, the core of which lies in Ethereum's exploration of its own positioning - that is, whether it supports deep binding with the dollar system. Link to original article

NEW EP: How the Genius Act Could Change the Dollar Forever With Sam Kazemian & Stani Kulechov Stablecoins are just 1.1% of US Dollars today. That’s about to change. In today's episode of Mammoth May🦣, @robbie_rollup sits down with @aave founder @StaniKulechov & @Fraxfinance founder @samkazemian to discuss: > The Genius Act & Legal M1 Stablecoins > Why Banks Hate This Bill > Frax’s Pivot to Digital Dollar Infrastructure > Aave V4 & the Future of Onchain Credit > Why RWAs will Eclipse Crypto & Stables > Sam’s Stablecoin x AI Thesis Full episode links below. Timestamps: 00:00 Intro 01:17 Magic Ad 01:33 Massive Stablecoin Adoption 09:01 Stablecoins vs the US Dollar 18:53 Stablecoins, RWAs, Security Tokens 26:15 Big Banks Launching Stablecoin 30:28 Mantle Ad 31:09 Extending US Dollar Credit 37:38 Genius Act Reactions 46:30 Frax’s L2 to L1 Transition 59:44 AAVE V4 Proposal

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Excited to speak on stage next week at BTC Vegas with the author of the GENIUS Bill himself, legendary Senator Bill Hagerty. We'll discuss how American companies like Frax will work in positive sum, help cement digital dollar dominance, & lead this new stablecoin golden era. 🤝