In 2024, RWA (real world assets) became a hot topic of discussion in the Web3 world. As a bridge between real assets and blockchain technology, RWA provides a new possibility for assets to be on-chain. However, in this crypto market known for high-yield and speculative assets, the attractiveness of RWA still faces challenges. Compared with native Web3 assets, RWA's returns appear relatively "conservative", and compared with those speculative tokens that can double quickly, RWA's stable returns do not seem attractive enough.

But those who truly understand RWA understand that its value goes far beyond stable long-term returns. The core potential of RWA lies in its ability to promote the digital transformation of real assets, inject more trust-based assets into DeFi (decentralized finance), and shape a new economic order in the Web3 world.

In order to solve the resistance to popularization and unleash the true potential of RWA, RealtyX has joined hands with several leading projects in the RWA field to launch a movement to promote the deep integration of RWA and DeFi - MTR RWAfi Movement . This movement is driven by innovation and education, and explores new possibilities of RWAfi (RWA + DeFi) by joining forces with leading projects and blockchain platforms in the industry.

In order to inject sparks of thought into the industry, the first discussion was themed "Mapping the RWAfi Ecosystem" , which deeply analyzed the composability potential of RWA and DeFi, and laid the foundation for the future development of the ecosystem. From heated discussions to practical work, the RWAfi Movement is redefining the intersection of real assets and decentralized finance, leading the industry towards a future with more trust, efficiency and long-term value.

The discussion was hosted by Jade, head of strategy at RealtyX, and co-hosted by the Plume blockchain team. It invited many heavyweight guests, including Plume co-founder and CBO Teddy, PG, founder of RWA market project Polytrade, and Clair, CEO of perpetual contract agreement Silver Koi.

The discussion was conducted in English. Below are the key excerpts and translations of the key points.

Compiled by RealtyX DAO community contributor Sanqing.

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Jade (RealtyX): Hello everyone! I am Jade from RealtyX, and I welcome everyone to participate in the first discussion of our MTR seminar and AMA series. Today’s topic is “Exploring the RWAfi Ecosystem”, and I will be the moderator of this discussion.

Before we begin, I would like to briefly explain what "MTR" means:

1. First, it stands for “Most Trusted and Rewarding RWAfi”, which reflects our commitment to building an influential real-world asset and decentralized financial ecosystem.

2. Secondly, “MTR” is also the name of the Hong Kong subway system. We want to pay tribute to Hong Kong because RealtyX was born in Hong Kong and is currently a member of the Hong Kong Cyberport incubation program. The MTR subway system is the best metaphor for our efforts to promote development and strengthen connectivity in the RWA field.

Next, we are honored to have invited several industry pioneers and innovators from Plume Network, Silver Koi and Polytrade. Let’s start with a brief introduction of each guest and their projects.

Teddy (Plume Network): Hello everyone, I am Teddy, and I am very happy to participate in today's discussion. Plume is a permissionless EVM network focusing on the RWA field. Our core goals include: tool development, promoting asset distribution, and enhancing asset composability.

We are committed to bringing new users into the RWAfi ecosystem and unlocking trading and liquidity opportunities for them, and we are also using the great projects on Twitter Spaces today to achieve this goal. Thank you again for the invitation, I look forward to the discussion!

Claire (Silver Koi): Hi everyone, I’m Claire, Silver Koi is the first decentralized exchange (Equities Perp DEX) that supports perpetual contracts for stocks. It may sound a bit complicated, but it’s actually very simple. We allow users to trade perpetual contracts for assets such as stocks, commodities, foreign exchange, etc. on one platform, and provide up to 200x leverage while maintaining low funding rates and low slippage. Our goal is to bring users an efficient and low-cost trading experience.

PG (Polytrade): Thank you Jade! I am very happy to be a part of this discussion today. I have a deep connection with the MTR (Hong Kong Metro) because I have spent a large part of my life in Hong Kong. So, I really like everything about it here. I am the founder and CEO of Polytrade. Polytrade has become one of the largest RWA asset trading markets in the world, and we will soon transform into an RWA center. Our philosophy is very simple. Just like teams like Plume are building infrastructure to help more users and projects enter the RWAfi ecosystem, our job is to build a front-end or DApp so that all ecosystems can be seamlessly connected and users can interact easily.

In other words, users can complete all RWA-related operations on Polytrade without leaving the platform, such as tokenization, asset management, indexes, loans and other functions. We position Polytrade as a super application for RWA, which is our current core goal.

Jade (RealtyX & Moderator): Great, today we have a very comprehensive RWA scene. Great! Let's jump into the first question, but let's focus on the RWA part first, and then dive into the RWAfi ecosystem later. RWA (real world assets) has become a very hot narrative in the past year. So, what inspired you personally to enter this field? For your project, is it to solve a specific problem or to seize a certain opportunity? Especially by focusing on real assets to achieve the goal. Let's ask Teddy to answer first, followed by Claire and PG.

Teddy (Plume Network): Yes, that's a great question. For me, the idea came to me after I started working at BNB Chain. I was on their ecosystem team, responsible for introducing various projects, whether it was DeFi, GameFi, or SocialFi. RWA (real world assets) was already a hot track at the time, but to be honest, the entire field was still in its early stages of exploration.

I first came into contact with RWA in 2021, when I was in charge of related research in the Coinbase team. However, after joining Binance and BNB Chain, my task was to introduce various RWA projects. Several core problems faced by these projects often recur, such as insufficient tool support, lack of composability, and distribution difficulties, especially how to accurately reach the right holders with assets. Our ideas are gradually taking shape based on solving these problems.

My co-founder and I have complementary backgrounds. He is mainly from the field of investment and engineering technology, while I am more focused on ecosystem construction. We have noticed that most of the current RWA projects are led by people with a traditional finance (TradFi) background, who try to move traditional financial products to the blockchain. But the problem is that the mainstream users on the blockchain are more crypto-native rather than traditional financial users, so it is difficult to find the fit between product and market (Product Market Fit).

Therefore, we want to look at RWA from a new perspective. Our goal is to create more use cases for on-chain users through our protocol, such as lending, trading, and unlocking liquidity. For example, projects like Polytrade, RealtyX, and Silver Koi are all centered around these directions. We want to provide on-chain users with liquidity and trading opportunities that they could not access before.

We have always believed that in order for the RWA field to truly develop, we must start from the needs of on-chain users and design products that they can understand and accept. In fact, the core of all this revolves around the fit between product and market. If you look back at the development history of RWA, you will find that stablecoins are the products that best meet market demand because they are permissionless, highly liquid, and look and use them closer to crypto assets.

At Plume, our philosophy is to abstract away the underlying complexity and package the entire ecosystem in a way that on-chain users can easily understand. On the surface, users are exposed to decentralized financial products, but behind them are real real-world assets that bring real benefits to users.

Currently, we are tokenizing a variety of assets, such as alternative assets, treasury bonds, collectibles, GPUs, mining rights, etc. We hope to bring these assets to the chain so that more people can fairly obtain the benefits of RWA. For us, this is the real direction of growth in the RWA field - through DeFi, creating new liquidity and income opportunities for people and breaking traditional limitations.

Claire (Silver Koi): Thank you Teddy for sharing. Let me start with my personal experience. I lived in Asia for a long time and noticed that in many regions, it is very difficult for ordinary people to access foreign markets. Take the US stock market as an example. It is the largest market in the world, but it is difficult for more than 4 billion people to access it. Many of my friends who want to invest in the US stock market have to go through a very cumbersome process, such as going through up to 10 different brokerage accounts, which often require high minimum deposits to open an account. In addition, they often have to pay seven or eight different fees, and if they want to trade fractional shares (fractional shares, which can be ½, ¼, or even 1/100 of a whole share), the fees will be even higher.

All of these barriers prevent a lot of people from getting better investment opportunities. That's why we wanted to create Silver Koi. We firmly believe that the opportunity to grow wealth shouldn't be reserved for a privileged few. Why shouldn't people in other regions - and I don't want to say just "non-US," but people in many regions - be able to grow wealth like everyone else? They should have the tools to use, too. So, that's why we started building Silver Koi.

Our goal is to make trading extremely simple. We want everything, like clicking to place an order, to be done in less than five clicks from start to finish, and for trades to be settled in less than a second. In fact, we have already achieved this. Speaking of fees, I just mentioned that high fees are one of the main barriers that many people face. We eliminate all of these fees for our users: no rollover fees, no management fees, and no additional charges for fractional trades. In addition, we are committed to providing extremely low funding rates to remain competitive with major centralized exchanges.

Of course, another focus of ours is speed. All operations can be completed very quickly, and users can freely transfer funds at any time. We hope that through these efforts, we can truly achieve our goal: to make investing simple and clear.

PG (Polytrade): I really like what Teddy and Claire just shared. They mentioned the important reasons for entering the RWA field and deepening their roots in this field. For us, when we got involved in RWA, RWA was just a vague term. At that time, almost no one really understood what RWA meant.

We started to enter this field in 2021. I come from a Web2 background and have worked in trade finance for nearly a decade. I hope to bring these valuable assets to the chain and provide DeFi liquidity for small and medium-sized enterprise (SME) borrowers. This is the opportunity for the birth of Polytrade in 2021.

At the time, the term RWA was a little funny to us, because literally, almost anything real can be called RWA. Nevertheless, some terms will gradually be accepted by the market, and RWA is one of them. Over the past four years, Polytrade has been working tirelessly, starting with the tokenization of single assets, focusing on trade finance. Later, we transformed into a market-based platform model.

In this process, we found that the biggest challenge lies in the problem of asset discovery. Therefore, we hope to become the "OpenSea" in the RWA field, allowing users to easily discover the dynamics of various protocols, chains, and industry transactions, as well as understand which protocols are running, which assets are being traded, and which tokens are available.

We then started to engage in secondary trading of these assets and launched buy now pay later (BNPL) and other innovative financial products on the platform. Eventually, we realized that there was still an important link missing in the entire ecosystem, which was speculation. Most people are not inclined to speculate on RWAs. For example, few people would bet on whether gold will rise by 20%. The characteristic of RWA is its stability, which is essentially in contrast to the high volatility of crypto assets.

Therefore, our goal is to introduce speculation to Web3 users, and our solution is a token-based model. We will build Polytrade into a super application where users can not only trade assets on this application, but also trade, pledge, and borrow RWA tokens. We are also developing prediction markets to further enrich the user experience.

We have made good progress and now have more than 60,000 to 70,000 active users. We are also working with Plume to actively explore in the testnet and plan to complete the final integration. For users, our goal is to provide a comprehensive application portal where they can complete all operations.

The advantage of this model is that we do not compete with other protocols, but provide them with a distribution platform. This is a pure distribution strategy that allows us to comfortably work with all protocols and add value to the entire ecosystem.

Jade (RealtyX & Moderator): Great, I think your sharing just now has laid a very good foundation for my next question. Teddy and PG both mentioned that although RWA has great potential, it also faces a key challenge, which is that it is not attractive enough to Web3 native users. Because these users often pursue higher returns and fast-paced financial speculation.

So my next question is for Teddy: In this context, from your perspective, why is it so important to create an interconnected RWAfi ecosystem? At the same time, how does Plume Network support and promote the development of this ecosystem through infrastructure construction? I know you have partially explained this in your previous answer, but this time you can explore this topic in more depth.

Teddy (Plume Network): This is a great question and I’m excited to dive into this topic. As I mentioned before, creating an RWAfi ecosystem is very important to us because traditional RWAs are usually static. People buy tokenized treasuries or private credit products, but most of these assets just sit in their wallets with no additional utility or yield.

By building a RWAfi ecosystem, people can do more with these assets, such as bringing them to different lending protocols as collateral, lending, and even participating in decentralized finance (DeFi) recycling strategies. These are unprecedented in the traditional RWA field. If you just develop DApps on a general blockchain alone, these functions are difficult to achieve. At present, general L1 and L2 chains perform well in the overall ecosystem, but they cannot provide sufficient support when supporting certain vertical needs, such as market expansion, demand creation, and ecosystem incentives. This is why we want to build the RWAfi ecosystem.

We want users to be able to trade RWAs like crypto assets while ensuring compliance. We achieve this goal through many of Plume's products. For example, our Plume Arc is an asset tokenization engine that allows anyone to tokenize any asset in a compliant manner. We have integrated multiple compliance solutions, tokenization solutions, and developed an internal transfer agent, while making more changes to the chain layer protocol. Another of our protocols is Nest Protocol, which is a yield stream protocol. Users can invest in yield tokens that represent future cash flows. This allows ordinary users to access assets that may have previously required accredited investor status or completed KYC to participate. This is somewhat similar to how DAI and SI work, and we have reproduced this mechanism on the underlying technology.

By combining these products, we are able to unlock huge network effects in a single network. This way, when capital enters our ecosystem, it can flow continuously. For example, users can invest in one asset and then plan across assets and participate in more DeFi activities, such as trading on the Silver Koi platform, or working with Polytrade, or even accessing these assets through some kind of aggregator. There are a large number of assets on Plume, and through this network, we hope to integrate DeFi projects with RWA in the same ecosystem to create brand new opportunities for users.

Our testnet has proven the potential of this model. In just two months of testing, we have achieved 280 million transactions, covering about 18 million wallets, of which 4 million are active independent users. This scale is unimaginable in traditional RWA projects.

In contrast, traditional RWA projects often have difficulty attracting users. For example, based on my recent observations on Etherscan, Ondo Protocol may only have 50 holders. By combining RWA with DeFi, we enable users to truly explore its potential.

A good example of this is our pre-deposit event two weeks ago. The target TVL for this event was originally $5 million, but it was filled in just 70 seconds, and eventually reached $30 million TVL in 90 minutes. This growth rate shows that the construction of the RWAfi ecosystem can bring real product-market fit to users.

We believe that working with projects like RealtyX, Polytrade, and Silver Koi will be the best way to advance this space, which is why we are focused on building the RWAfi ecosystem.

Jade (RealtyX & Moderator): That’s awesome! So, how is it from a project perspective? Maybe we can ask PG from Polytrade to share first. From a project perspective, how is an interconnected RWAfi ecosystem with DeFi elements different from an ecosystem without DeFi elements? How will this bring value to your users?

PG (Polytrade): We are all working towards the same goal - promoting the popularity of RWA. Let more people believe in RWA and let them trade more on the chain instead of relying on off-chain operations. We need to continue to work hard to attract more Web2 users and let them see the real advantages of Web3, such as the convenience, security, transparency and possible lower costs of on-chain transactions.

Many of us on the team come from a Web2 background, so we are very aware of the problems with the traditional financial system and that the financial world needs to be redesigned and reinvented. Of course, this is not a novel point of view. We are past the stage where we need to sell people on Web3 - Bitcoin has hit $100,000, and institutional participation and acceptance are evident. More and more financial tools and products are entering this space.

For example, we have established a partnership with MasterCard and continue to develop DApps with them for institutional clients. Although our users may not care about our cooperation with MasterCard, we are well aware of the importance of these infrastructures.

Regarding the RWAfi ecosystem, I think it's a great concept, but at the end of the day, we are building a parallel financial world where all real-world assets migrate from Web2 to Web3. This will not only bring greater value to users, but also make these assets more accessible to everyone. Like Claire mentioned, why can't someone trade assets that are available globally? Why would geographic restrictions or capital barriers prevent me from purchasing a certain asset? Why can't I buy Apple stock with $10, when this opportunity only belongs to those who have millions of dollars?

This is exactly what the entire RWAfi ecosystem should ultimately strive for. As a market-based platform, one of our biggest advantages is being able to observe and participate in a variety of exciting projects, and I believe Plume has a similar experience. We see a lot of projects tokenizing different types of assets, and the diversity of these projects is beyond our imagination. They are not limited to financial assets or real estate, but also extend to areas such as green energy, climate projects, renewable resources, and commodities.

At present, Polytrade has received so many protocol requests that it even needs to suspend activities to better plan how to support and integrate these protocols. This speed and diversity of innovation makes me extremely excited. Polytrade will continue to be committed to becoming the largest distribution platform in this field. Partners like Plume are constantly bringing us users who need a simple and friendly front-end experience, which is the value of our platform.

In addition, our close relationship with the blockchain has also become crucial, as we not only help users acquire assets, but also create various on-chain activity opportunities for them. I have confidence in the entire RWAfi narrative and believe that this will be the right path to achieve greater mass adoption.

Claire (Silver Koi): These are all great answers, so I'll keep it short. At Silver Koi, our goal is to make investing accessible to everyone. Building an interconnected RWAfi ecosystem is important because it helps us achieve that goal. Being part of this ecosystem provides us with value in many ways. For example, users can easily access a wider range of investment opportunities, such as stocks. They can also invest in real estate through Realty X, or explore other asset platforms through Polytrade. Through such an ecosystem, users can actually access multiple asset classes such as stocks, commodities, foreign exchange, bonds, etc. Secondly, because of this ecosystem, it becomes easier to share infrastructure and liquidity, which not only greatly reduces costs, but also speeds up transactions and significantly improves the user experience. Ultimately, this ecosystem not only helps projects work better together, but also makes the user experience smoother. So, from our perspective, this ecosystem is a win-win for both projects and users. That's my answer.

Jade (RealtyX & host) : I personally agree with what the guests just said. For RealtyX, I think a supportive ecosystem, as well as an interconnected ecosystem, is essential for the project to thrive. Currently, we have partnered with Plume, and we also listed our assets on Polytrade a few months ago, and you can see that everything is closely connected. As Claire said, a smooth and seamless user experience is the key to bringing the next million or even billion users into this field.

Next, let's move on. My next question has been partially answered in the previous answer, but I still want to expand on it a little bit, about the synergies we can achieve in the interconnected RWAfi ecosystem. If you want to add more content, can you talk about what unique advantages your project has that can complement other projects in the RWAfi ecosystem? Or, share what you are currently building in collaboration with other projects so that everyone can better understand how RWAfi actually works.

Teddy (Plume Network): We can use the three projects present today as examples to demonstrate the synergy in the RWAfi ecosystem. Once we launch the mainnet, the income product will become one of the core highlights of the ecosystem, and many users will come to Plume because of the diverse income opportunities we provide.

Assuming users transfer assets to Plume through our main bridge partner LayerZero, they can invest in RealtyX's yield assets through Polytrade's app and interface. Once they acquire these assets on the RealtyX platform, they can further use these assets as collateral to enter other lending protocols. For example, in the future, Silver Koi may accept these assets as collateral, allowing users to not only earn income but also trade on the Silver Koi platform. This ability to combine assets is a highlight of the DeFi field, which makes the use of assets more diverse. This network-level composability has been rare in the past, but is now becoming a new possibility.

In addition, we also see that many protocols are developing new strategies around this ecosystem. One of the main directions is the stablecoin circulation strategy. For example, users can use PUSD (Plume's stablecoin) as collateral to borrow more stablecoins, and then reinvest them into PUSD, and continue the cycle. In this way, users can increase the original 8%-11% stable income to 20%-30%.

The RWAfi ecosystem provides strong support for these strategies, enriching the income model of assets and giving users the opportunity to improve their returns through innovative ways. This is a very exciting field, and we have seen more and more opportunities emerging, and future developments are worth looking forward to.

Jade (RealtyX & Moderator): Thank you Teddy! Your answer is very clear and helps us better understand how the RWAfi ecosystem can bring real value to users. Let's quickly move on and throw out the last question. In the next 12 months, what do you think are the key indicators for the success of the RWAfi ecosystem? Are there any potential obstacles that need to be overcome?

Claire (Silver Koi): Okay, let me just make a quick prediction. Let's talk about the roadblocks first, which is probably one of the things that everyone is concerned about, which is regulation.

Regulation is probably one of the biggest challenges we face right now. The overall legal environment and rules are not clear enough, and each country and each jurisdiction has its own rules. The United States in particular is particularly uncertain in this regard. Although the situation may improve after some policy adjustments, no one can be sure. From a startup's perspective, this is especially difficult because it often takes a lot of time and resources to sort out these different rules. I hope that in the next 12 months, the legal environment will become clearer. At the same time, this is one of the meanings of the existence of the RWAfi ecosystem - we can share legal knowledge and even share some consulting resources. This actually responds to your previous question.

Next, let’s talk about the key indicators of success. We can measure it in many ways, but the most direct one is the number of new users. “New users” here include users brought in from the Web2 world, as well as users brought in from crypto natives. For Web2 users, the challenge is to educate and guide them, such as teaching them how to use tools such as crypto wallets. For Web3 native users, although they are familiar with crypto assets, they may know less about traditional markets. The difficulty may be related to factors such as age and educational background. If we can make progress in these two aspects, it will be a remarkable achievement.

Another key point is liquidity.

Teddy also mentioned this. Plume and the entire ecosystem are working hard to provide more shared liquidity for different projects, increase the depth of the capital pool and the variety of assets. This can bring more competitive pricing to users. We have also invested a lot of effort in the performance development of the platform, while trying to introduce high-quality liquidity to ensure that users get smaller slippage and lower fees.

Jade (RealtyX & Host): Claire's answer is very comprehensive. For Realty X, we also face regulatory challenges, which is actually an issue that all RWA projects need to pay attention to and work hard to overcome. At the same time, we also need to have more dialogue with the government. Fortunately, we are currently participating in the Hong Kong Cyberport Incubation Program, which provides us with a valuable opportunity to promote policy discussions.

In the next 12 months, we hope to see a more open and supportive legal environment, which will provide more room for the growth of the entire RWAfi ecosystem. As I just said, through the RWAfi ecosystem, we can not only cooperate with other projects, but also jointly explore how to promote relevant policy discussions and solve practical problems.

This AMA discussion was very inspiring and I hope everyone has gained something from it. Finally, thank you again to all the guests and audience for participating today. Don’t forget to follow these wonderful projects and guests on social media to keep up to date with their latest progress! Thank you for listening, and have a great day!

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