Today, I met two friends offline, @saisaisai1995 and @CycleStudies. Although we had two separate meetings, the core content of both was quite similar. We discussed whether RWA has space in the cryptocurrency market and if it can drive the market, including $ETH, out of its predicament. I shared my views with everyone. Firstly, there is a fundamental difference between #RWA and #STO. The most essential difference is that RWA requires a higher level of compliance, similar to the status of the SEC in the United States, because RWA requires a large amount of assets to enter. The main reason for the entry of large assets is not because of real estate or raisins being put on the blockchain, but because compliant assets are being put on the blockchain. In simple terms, it means compliant assets issued by compliant platforms. When we talked about stablecoins before, we mentioned that the hard backing of stablecoins is actually the foundation of RWA. For example, U.S. Treasury bonds, even if the debt ceiling is raised, the purchasing ceiling is predictable. But if RWA based on U.S. Treasury bonds is opened up, compliant stablecoins can be used to invest in U.S. Treasury bonds directly on a compliant "on-chain brokerage," which is equivalent to expanding the yield of DeFi. Moreover, DeFi and RWA are combined to issue #RWAFi. A simple example is using stablecoins to buy T-Bills (short-term U.S. Treasury bonds), and then an on-chain protocol (third party) provides Staking (pledging) based on the confirmation of rights of the purchased T-Bills. Although it uses its own issued Token as a subsidy, it actually provides on-chain liquidity for U.S. Treasury bonds, and the assets from Staking can be used as collateral for further financial maneuvers. This is the gameplay of financial assets. Another example is that, so far, U.S. spot ETFs hold more than 1.2 million $BTC in stock, but Bitcoin spot has been available for purchase for many years. Why wait for ETF approval to buy? It's because of sufficient compliance. Compliance can carry large assets, and compliance ensures that BTC custody is legally protected. If theft or other issues occur, the custodian is required to compensate 100%, reducing the "black forest" rules of the crypto world. Therefore, although we see various RWA projects, only those that obtain permission can ultimately succeed. Approved projects can carry large funds and provide safe services. In addition to U.S. Treasury bonds, high-quality corporate bonds are also the best targets for RWA. For example, the bonds issued by $MSTR are not available to ordinary investors, but BlackRock can buy them. If BlackRock buys them with a 4% yield and sells them on the chain with a 5% yield (2.5% MSTR yield + 2.5% token issuance expected yield, just an example, don't take it too seriously), it can achieve confirmation of rights. I believe someone will buy them. Today, I also gave an example. If LV or Hermès also sells their bonds on the chain through BlackRock or someone else, and provides a VIP treatment confirmation for investors who buy more than $1 million, it is equivalent to confirming rights for RWA. Of course, strict KYC and AML are required here, but the most interesting thing is that RWAFi may not need it. RWAFi institutions can complete KYC and AML in the name of the institution and then seek retail investors to finance purchases, turning into RWAFi, which can become a very interesting business behavior. Additionally, some friends say that RWA is low liquidity, which is actually wrong. The liquidity of RWA depends on what the underlying asset is. If it is really U.S. Treasury bonds on the chain, what liquidity is lacking? U.S. Treasury bonds are one of the best in the world in terms of liquidity. But if you insist on putting coconuts on the chain or Cambodian real estate on the chain, there is indeed not enough liquidity, and the reason for the lack of liquidity is insufficient compliance. PS: Please don't ask me what RWA assets can be bought. Either look for compliance or look for sufficient industrial returns and cash flow income, otherwise, buying anything has nothing to do with real RWA. PS2: Now, a lot of computing power on the chain is also a form of RWA. Although there may be some shortcomings in compliance, if there are real returns to conduct airdrops or buybacks of rights, it may not be impossible. Making RWA a part of the confirmation of rights of returns, this form of RWAFi should be able to thrive in the market. This tweet is sponsored by @ApeXProtocolCN | Dex With ApeX.