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RWAs build mirrors where they need building blocks

2025-07-13 15:10:12

Main Idea

Real-world assets (RWAs) in DeFi are often isolated and underutilized, but newer designs focusing on compliance and interoperability could bridge the gap between traditional finance and decentralized finance.

Key Points

1. Stablecoins have evolved into financial infrastructure, serving as programmable money, unlike many other RWAs which remain underutilized.

2. Tokenization alone does not guarantee adoption; early RWA models focused on custody rather than usability within DeFi.

3. Compliance is a major bottleneck for RWA growth, with legal frameworks like the GENIUS Act being a step toward enabling usable, compliant assets.

4. Liquidity in RWAs is hindered by lack of interoperability, preventing regulated assets from moving freely across DeFi.

5. New DeFi-compatible RWA designs are emerging, aiming to make them functionally relevant within DeFi rather than just adjacent to it.

Description

Most RWAs remain isolated and underutilized instead of composable, DeFi-ready building blocks. It's time to change that.

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