Will RWA be the next battleground for Binance and OKX?
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Will RWA be the next battleground for Binance and OKX?
Don't doubt it—the largest incremental market lies in real-world assets.
Navigating Web3 tides with focused insightsAuthor: Ye Kai
Articles are worst when they're both dull and long. Sometimes once you start writing, it's hard to stop—and so the topic drifted into RWA exchanges. Ever since last year’s Hong Kong Web3 conference, some industry figures have been pushing to launch an exchange together. Back then, I wasn’t optimistic about Hong Kong-licensed compliant exchanges, so instead spent considerable time researching regional markets in Dubai and South America, as well as the potential for vertical RWA-focused exchanges. I’ve also visited many friends at various exchanges, deeply studying the crypto exchange ecosystem—especially the murky money-laundering industry, plus core operational aspects like community user acquisition and traffic投放 (traffic investment). Several friends rushed to submit their license applications before the end of March this year. But I never believed in Hong Kong’s licensing process or its later Bitcoin ETFs. Sure enough, several firms applying for Hong Kong Type 7 licenses have already withdrawn; I believe more institutions will follow.
Setting aside U.S. actions against certain exchanges, offshore giants like Binance, OKX, and Huobi have recently seen a flurry of token launches with no real buyers stepping in. Meanwhile, Hong Kong-licensed HashKey (Hong Kong site) remains compliant but suffers from negligible trading volume and liquidity. Only after launching its international site did it see slight activity—but even then, it merely takes a slice of the existing crypto market pie. Amid this chaotic fog, is there a new opportunity?
01 The Next Opportunity for Exchanges
Will RWA exchanges become the next battleground that decides between Binance, OKX, and licensed exchanges?
Those who understand know that native cryptocurrency exchanges are already highly mature, especially those led by Chinese teams—Binance, OKX, and Huobi being prime examples. In terms of scale, unless Binance faces self-inflicted crises like Huobi did, OKX has little chance of overtaking it. Secondary-tier exchanges like KuCoin and Gate also struggle to surpass or disrupt the top players.
Launching another offshore exchange is unlikely to succeed either—the playbook is too well-known. Built on gray-market laundering operations, resembling casinos, these platforms rely heavily on user acquisition tactics and marketing flows. Chinese teams have pushed this model to its limits; everyone uses the same people, the same methods. Differences are marginal—fifty steps versus a hundred. A new entrant might grab a small piece of the pie, but surpassing incumbents? Unlikely.
Hong Kong’s licensed exchanges are essentially a false premise. Regulators remain old-school finance veterans. So-called innovative products like STO (security tokens) and Bitcoin spot ETFs still serve traditional financial interests—the Hong Kong Stock Exchange and its network of intermediaries dividing up the spoils. There’s no real space here for Web3’s emerging forces to gain traction.
New赛道 Web3 wallets? OKX and Binance have worked on them for ages. But inscriptions, runes, memecoins—none sustained momentum. They lacked longevity and trading volume. Even BTC core developers remain skeptical of inscriptions. Building a major new ecosystem around these seems nearly impossible.
In contrast, U.S. Bitcoin spot ETFs have proven far more resilient than their Hong Kong counterparts. The key takeaway? To grow big, you must engage real-world capital and attract new, incremental users.
Overall, Binance and OKX are already deeply entrenched in the existing crypto market. Their only real path forward isn't further tinkering with Web3 wallets or memecoins—it's RWA (+DePIN) exchanges/markets focused on tokenizing real-world assets.
02 Is RWA the Deciding Point?
Is the next decisive battle for Binance and OKX in RWA?
Why say this? Because the largest source of growth lies squarely in real-world assets.
In my first RWA article, I listed global monetary and market figures from 2020 (in USD): silver $43.9 billion, gold $10.9 trillion, stocks $89.5 trillion, global bonds $253 trillion, real estate $280.6 trillion, derivatives $558.5 trillion (low) to $1,000 trillion (high)—not including emerging assets like AI computing power or renewable green energy.
Let’s recall: what drove this cycle’s BTC rally? Most point to Bitcoin spot ETFs. At their core, ETFs are bridges connecting the real world with Bitcoin—a classic RWA product. Traded on NYSE, CBOE, Nasdaq, while Coinbase handles the underlying Bitcoin spot trading, bringing in hundreds of billions in new capital, with daily incremental trading volume nearing $4–5 billion.
Right now, the only meaningful growth market consists of real-world assets, capital, and users. We emphasize that RWA’s essence is corporate financing, whose core is institutional markets. Mainstream real-world assets and funds reside in corporate and institutional hands. Moreover, RWA products allow novice users to participate without complex crypto wallets—using traditional exchanges, regular credit cards, or pension accounts. RWA tokens or digital assets come with professional custody and trading platforms.
Look back at Bitcoin spot ETFs: beyond U.S. public companies, consider the fund institutions following them in, along with banks and pilot investments from pension funds. Just analyze one thing: examine Bitcoin ETF allocations within their portfolios and previous asset distribution categories—you’ll quickly grasp the massive potential behind RWA assets.
When discussing real-world assets, RWA exchanges cannot ignore DePIN.
The combination of RWA and DePIN effectively maps or anchors real-world assets onto blockchain. DePIN serves as the infrastructure for issuing real-world assets on-chain—it's essentially IoT 3.0 + asset tokenization. Leading exchanges already have DePIN projects listed, but looking at current WiFi or data-sharing projects, few generate direct cash flow value. However, as foundational infrastructure for RWA issuance, DePIN can directly create RWA token value during asset issuance and trading processes. This RWA token cash flow can then be bundled into structured RWA financial products.
By integrating DePIN with DAOs, SPVs via smart contracts, and crypto funds (offering token dividends or liquidity), RWA asset issuance and anchoring can become more on-chain-native (implementation mode is complex enough for a dedicated article).
So let’s clarify:
Offshore leaders like Binance, OKX, and Huobi are native token exchanges, built initially on ICOs and futures, securing top-tier status. Their target customers are primarily retail speculators.
U.S.-based Coinbase sits somewhere between offshore and regulated. When Binance faced U.S. pressure and Bitcoin spot ETFs launched, Coinbase successfully captured this massive influx of traffic. Its customer base is mixed—beyond retail traders, ETFs brought significant institutional inflows.
Hong Kong-licensed HashKey (HK site) focuses on compliance, mainstream tokens, and security tokens, mainly serving PI (professional investor) clients. Retail participation is heavily restricted and limited. Overall trading volume remains low, mostly non-crypto-denominated, centered on compliant deposits/withdrawals.
Then there’s HKEX itself—though Hong Kong equities have declined sharply in trading volume, conservative regulation allowed it to seize control over Hong Kong Bitcoin spot ETFs, distributing benefits among broker-dealer allies. STOs may follow the same pattern. HKEX targets institutional and PI investors—essentially traditional investors/speculators in Bitcoin-related概念股 (concept stocks).
So do you still expect any revolutionary disruption from Hong Kong-licensed exchanges?
Instead, we should seriously ask: Is an RWA exchange the only viable bridge attracting traditional capital between offshore and licensed models?
03 Core Keys to RWA Exchanges
Despite vast market potential, RWA faces challenges bridging the real and digital worlds, requiring proper promotion, education, consulting, incubation, advisory services, etc. As real-world asset tokenization becomes widespread, involving large-scale migration, uplift, trading, and settlement, RWA exchanges and their ecosystem partners will play pivotal roles.
Yet most current licensed exchanges and those claiming to build RWA exchanges or protocols only solve the asset issuance problem—such as STO standards, NFT-based certificates, or tokenization workflows—and stop there. Industry players haven’t yet addressed four critical issues: market structure, participants (B2B & B2C), native tokens, and liquidity.
From an RWA perspective, drawing lessons from traditional exchanges, market structure is complex—covering asset types, funding sources, trading methods, participant classifications, behavioral traits, and multi-layered trading channel designs.
RWA exchanges must first nail down capital-side strategy. First, unlike Hong Kong’s unique role in China-U.S. asset swaps—which diminished due to decoupling—could RWA capture off-the-books Sino-American capital flows? Second, comparing ICE, CME, LME—major commodity and precious metals exchanges—if such real-world assets were turned into RWA products, encompassing spot, futures, options, derivatives, contracts, plus leverage and arbitrage capital—the total capital pool would be enormous. Third, similar to Drip Capital’s Macau exchange, global capital constantly seeks “cash cow” assets. Whether meeting corporate financing needs or catering to overseas funds chasing operating cash flows and short-term returns, this represents massive demand within RWA.
On the asset side, RWA exchanges must highlight scarcity, leverage, and arbitrage opportunities. Based on current investor preferences, three types of RWA assets show strong promise: scarce physical assets, stable cash-flow-generating assets, and high-efficiency productive assets. Real estate is largely ruled out. Scarce physical assets include AI compute power, green energy, advanced materials. Cash-cow assets include naturally scarce or monopolistic sectors like energy, mining, finance, utilities; cross-cycle essentials like consumer goods, infrastructure; and efficient production assets like AI compute, high-end hardware, new materials. From a tokenization standpoint, RWA suits high-quality growth assets capable of generating consistent free cash flow.
RWA exchanges target incremental and industrial users, so participants differ from native crypto exchanges. Expected participants via asset tokenization include: physical commodity traders (e.g., bill-of-lading, warehouse receipt trading); asset allocators—mainly funds doing macro portfolio allocation—who need compelling incentives to use RWA exchanges; quantitative arbitrage traders, for whom RWA exchanges could offer tailored strategies and liquidity contracts; and intermediary service providers—brokers, dealers, makers—whose involvement depends on exchange outreach and market development.
Multi-tiered architecture is also crucial. The foundation combines CEX + DEX with AMM liquidity pools, plus OTC desks essential for institutional-scale trades. Given RWA tokenization, Layer 2 infrastructure is needed, alongside a LaunchPad for asset issuance, DePIN as real-world asset infrastructure, NFTs as equity/rights or delivery vouchers, platform tokens for governance/incentives/liquidity, DAO + Fund support modules, and liquidity mechanisms like yield farming.
In summary, key success factors for RWA exchanges include: onboarding real-world assets to chain via DePIN (IoT 3.0 + tokenization); creating endogenous value through native token governance, incentives, and arbitrage to attract new users; improving market structure and liquidity to address gaps in traditional finance; and enabling multi-layered fundraising and trading ecosystems.
Funding-wise, establish smooth, acceptable channels tapping overseas capital and financing markets to draw in institutional and corporate clients. Design profitable arbitrage spaces based on RWA asset characteristics—offering both substantial asset value and internal growth drivers. Leverage blockchain advantages combining NFTs, tokens, and smart contracts to restructure traditional equity, bond, and derivative values, while enhancing them with native token incentives. Ultimately, build a compelling financial narrative and increase platform token valuation, realizing a comprehensive RWA industrial blueprint: “DePIN + industrial trading + digital IPOs (RWA issuance) + digital banking + industrial indices/digital derivatives + industrial/platform currency.”
Don’t underestimate real-world asset scales. Forget CME or other commodity giants—for example, Shandong’s agricultural e-trading platform sees over 20 billion RMB in garlic alone. This is already an RWA-like model: electronic trading based on garlic planting cycles, spot trading, cold-storage warehouse receipts, leveraged and arbitrage-driven (via website + app). Such systems can easily migrate to blockchain—once on-chain, it becomes RWA trading.
Got carried away again—so much more to discuss about RWA exchange economic design. For now, just ponder this: Could RWA exchanges potentially replace HKEX as future nodes in a multipolar financial system?
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