A Divided Web3 World: At Least Three Types of RWA
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A Divided Web3 World: At Least Three Types of RWA
So what kind of RWA are you talking about?
Navigating Web3 tides with focused insightsBy Liu Honglin
Recently, when discussing Web3 with friends, the topic inevitably turned to RWA. Someone asked me if I've been working on any RWA projects lately. Hearing those three letters, I hesitated before responding—and first asked, "Which kind of RWA do you mean?"
It's not that I enjoy being mysterious. It's just that today, so many people in the space use the term "RWA," but everyone means something different. For some, RWA means issuing tokens; for others, it’s about branding and PR stunts. Some even treat it as digital pre-sales or crowdfunding. If you don’t clarify what they mean first, you risk offending someone mid-conversation, capsizing a friendship, and losing potential legal fees before they’re even billed.
So let’s take a serious look at the current landscape of RWA projects as I see them. Broadly speaking, there are three distinct models—all claiming to represent “real-world assets onchain,” yet each operating under entirely different logic, legal risks, and commercial goals.
The First Model: Asset Tokenization + Financial Compliance — The "Regular Forces" of DeFi
The core idea here can be summed up simply: transform traditional financial assets into programmable onchain tokens.
Imagine a short-term government bond (T-Bill) that previously required opening an account at a financial institution, submitting KYC documents, and going through layers of bureaucracy. Now, via platforms like Swarm, Ondo, or Matrixdock, users can directly purchase tokenized T-Bills. These tokens are backed by real-world assets—such as government debt, loans, bills, or fund shares—held in custody by regulated institutions. The tokens are issued on blockchain and can then be used within DeFi protocols for staking, lending, or yield aggregation.
This model earns the nickname “regular forces” because it must meet at least three critical conditions:
First, the underlying assets are real and legally held in third-party custody off-chain;
Second, the token issuance process is compliant and transparent, typically adhering to regulations from authorities such as the U.S. SEC, Singapore’s MAS, or the EU’s MiCA framework;
Third, investor access is restricted—not open to the public—with whitelists or accredited investor requirements commonly enforced.
The biggest challenge? High regulatory costs, complex operations, and extremely high demands on team compliance credentials. You can't just decide to launch one of these. But the benefits are clear: transparent capital usage, verifiable assets, and predictable returns—ideal for conservative investors who want exposure to onchain finance without gambling their capital.
Currently, institutions like Circle, Franklin Templeton, and Securitize are actively building in this space. For those aiming to bring Web2 financial flows onto the chain, this is the most viable and certain path forward for RWA.
The Second Model: "Blockchain Transformation 2.0" — Where Storytelling Trumps Product Building
Now consider the second type. It appears legitimate on the surface, but its foundation isn’t actual assets—it’s market capitalization management. This is classic Hong Kong-style maneuvering: listed companies issue a series of “RWA announcements,” spinning narratives about how blockchain will empower their physical business, hoping to drive stock speculation.
You’ve probably seen this play out: a struggling Hong Kong-listed company suddenly declares its entry into Web3. Press releases flood in—partnerships signed with unnamed platforms, plans to tokenize company assets or projects, promises of global allocation through RWA models. You check the whitepaper: pure fantasy. Dozens of press articles published, glossy photos taken, media coverage everywhere.
Why go through all this effort? Because these moves aren’t meant to serve the onchain ecosystem—they’re designed for capital markets. By crafting an RWA narrative, companies inflate valuations, satisfy shareholders, and secure funding. In essence, it’s “wrapping traditional assets in blockchain skin to extract value from public markets.” Some firms don’t even issue tokens—they merely change their website colors or launch a landing page and instantly brand themselves as “flagship Web3 transformation enterprises.”
In strict terms, these RWA projects involve no real asset tokenization and offer no defined rights to token holders. For the project teams, the goal isn’t digitization—it’s aligning storytelling with capital cycles. For retail investors, participation is largely symbolic: no tradable tokens, no onchain activity. The end result? You think you're investing in Web3—but in reality, you're buying a penny stock.
The Third Model: Mainland China’s “Token + Pre-Sale” Variant — Highest Legal Risk
The final model thrives particularly in the Greater Bay Area—especially Shenzhen and Fujian—where enthusiasm runs high. In Web3 startup groups, fintech discussion forums, or government招商 events, you’ll often hear pitches like this:
"Our project is RWA—we use tokens pegged to real goods, such as red wine, baijiu, green tea, property income rights, or equipment leasing rights... Buying our tokens locks in future收益."
It sounds like a blend of NFTs and RWA, but in practice, it's mostly an old-fashioned mix of crowdfunding and pre-sales dressed up in blockchain terminology. Common traits include:
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No compliant custody mechanism—the authenticity of assets relies solely on verbal claims;
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Tokens sold directly to individual users with zero investment thresholds;
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Promises of high returns—“double your money in six months,” “10x gains once the token lists, no dream too big”;
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Rudimentary project documentation—mostly offline PDFs or PowerPoint decks, lacking onchain data or code audits.
More critically, most of these projects effectively constitute illegal public deposit-taking or disguised fundraising. Even if the underlying assets exist, if the tokens are tradable, promise returns, and are marketed to the general public, they cross legal red lines under Chinese criminal law regarding unauthorized fundraising. And let’s not forget—some are outright scams using RWA as a cover.
Recent enforcement trends show that police, market regulators, and financial oversight bodies are increasingly monitoring initiatives labeled as “blockchain,” “digital commodities,” or “RWA innovation.” So don’t be fooled when someone shares a post saying, “This is RWA + new quality productive forces.” Step in carelessly, and you might find yourself charged with illegal fundraising.
So Which RWA Do You Mean?
At this point in time, the term RWA has become completely polysemic. Some are genuinely tokenizing financial assets. Others are harvesting capital markets. And some are simply running pyramid schemes with better graphics.
The irony? These three camps often end up at the same events, endorsing each other, co-headlining roadshows. The result? The RWA space looks vibrant—but beneath the surface, it’s chaotic and deeply fragmented in understanding.
We have the so-called “RWA consultants” to thank for this. They help clients design token structures, run investor outreach campaigns, connect with government resources, book exhibition booths—the full package. As a lawyer deeply committed to responsible and compliant industry development, I offer a few practical suggestions for those exploring RWA innovation. Before launching anything, ask yourself these four questions:
One: Are your assets real, custodied, and auditable?
Two: Does your token design avoid falling into securities classification?
Three: Are you selling to qualified investors—or to the general public?
Four: Do you have solid legal opinions and regulatory contingency plans?
If you can’t answer these four fundamental questions clearly, please refrain from casually throwing around the term “RWA,” and certainly don’t brand it as financial innovation.
We need the concept of RWA. We hope it succeeds. But more importantly, we need people who build it responsibly, legally, and sustainably—not ones who wander into regulatory minefields and drag their clients down with them. Yes, service providers may collect their consulting fees upfront, but ultimately, it’s the client who gets buried.
So the next time someone passionate about RWA starts talking about poetry and distant horizons, pause—and ask them:
When you say RWA—exactly which version do you mean?
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