Table of Contents
Researcher
Key Takeaways
With markets worth over $100 trillion each, real-world assets (RWAs) like commodities, bonds, and stocks represent an enormous untapped opportunity for crypto's next phase of growth. Institutional asset managers such as BlackRock, Franklin Templeton, KKR, and Hamilton Lane are issuing tokenized RWA funds to capture this massive market.
As a full-stack L1 blockchain, Plume's purpose-built RWA Chain specializes in bringing RWAs onchain into a RWAfi ecosystem. The platform simplifies the process of tokenization, liquidity management, and go-to-market for RWA projects by combining essential functions like custody services and KYC/KYB verification into a single integrated solution.
Plume's RWAfi vision extends far beyond mere tokenization. By building a comprehensive onchain ecosystem and community for RWAs, Plume enables new use cases for everything from traditional assets to abstract concepts like GPU price indices and economic indicators—blurring the lines between real world and crypto.
The thriving Plume ecosystem now has over 180 teams building on it, spanning specialized lending protocols, perpetuals, real estate, and even hotel booking services. This diverse range of applications demonstrates the platform's ability to transform how we interact with RWAs, and think of them as practical products and useful services.
1. Background - Emergence of Onchain RWA Market
1.1 Potential of RWAs in Crypto Market
Real-world assets(RWAs) represent crypto's next major opportunity, and for good reason: their sheer market size is staggering. While the entire crypto market currently stands at $3-4 trillion, individual sectors like commodities, bonds, and stocks each command markets exceeding $100 trillion. This vast scale hints at the transformative potential of bringing RWAs onchain.
Within the crypto ecosystem, the market for tokenized RWAs continues to grow and has already established itself as one of the sector's greatest success stories. Stablecoins, the leading example of RWAs, processed an astounding $10 trillion in onchain transactions during 2023. Tether, one of the largest issuers, has minted over $130 billion in stablecoins and generated an impressive $5.2 billion in profits just in the first half of 2024. In the realm of onchain protocols, MakerDAO has generated over $27 billion in revenue over the past twelve months—accounting for 40% of all Ethereum-based DeFi protocol revenue. Meanwhile, protocols like Ondo, Ethena, and Frax are accelerating the onchain transition of traditional assets. Yet despite these remarkable achievements, we've barely scratched the surface of RWA's vast potential.
Source: rwa.xyz
The shift toward tokenization has become an undeniable trend. Coinbase's analysis reveals a 39% YoY surge in Fortune 100 companies launching onchain initiatives in Q1 2024. While stablecoins remain the primary driver of tokenization growth, there's rapidly growing interest in tokenizing off-chain assets like U.S. Treasury bonds. The TVL of tokenized assets (excluding stablecoins) has more than doubled since early 2023, reaching $3 billion—a clear indicator of the market's direction.
Source: The Fortune 500 Moving Onchain
As the technology matures and its benefits become increasingly apparent, the momentum behind tokenization seems unstoppable. A next-generation financial system built today would naturally incorporate the key features of tokenized assets: 24/7 availability, instant global settlements, broader market access, seamless interoperability through shared technology, and customizable transparency. These advantages provide financial institutions with the foundation to enhance operational efficiency, increase liquidity, and create new revenue opportunities through innovative applications.
1.2 Intensifying Competition in the Tokenization Market
We're already witnessing a shift in the industry towards tokenization. Giants in TradeFi like BlackRock, WisdomTree, and Franklin Templeton are increasing their deposits in onchain tokenized funds, while Web3 native projects like Ondo, Superstate, and Maple Finance are accelerating the adoption of tokenized money market funds. In a recent interview, BlackRock CEO Larry Fink emphasized this trend, stating, "We believe the tokenization of financial assets is the direction for the next evolution. Every stock, every bond will be on a universal blockchain."
Source: Tokenization: The Future of Commodities
The opportunity hasn't gone unnoticed by major protocols either. Large and small protocols alike are racing to capture their share of this massive market:
Tether, the issuer of USDT, the largest stablecoin, is launching into broader asset tokenization through its 'Hadron' platform. The platform offers integrated services for token issuance and management, including KYC/AML, risk management, and secondary market monitoring. It particularly focuses on helping nations and corporations leverage alternative financing opportunities.
Ripple has announced the launch of the first tokenized money market fund on the XRP Ledger (XRPL). Working with UK's Archax and Abrdn, the project aims to tokenize a portion of a £3.8 billion liquidity fund, with plans to bring more asset managers' RWAs to XRPL in the future.
Aptos is building 'Aptos Ascend', an institutional digital asset management platform. Built on Microsoft's Azure technology, it combines SK Telecom's Web3 wallet infrastructure with Brevan Howard's financial market expertise. The platform's core mission is to help institutions efficiently manage digital assets and expand tokenized asset liquidity globally while maintaining regulatory compliance.
2. Plume Enables RWAfi
2.1 Plume Network: Purpose-Built Blockchain For RWA
Plume Network is a full-stack architecture and ecosystem designed specifically for the integration and utilization of RWAs onchain. One key distinction lies in the native integration of tokenization processes and regulatory compliance mechanisms directly within the blockchain architecture. This design enables RWA owners and institutional investors to leverage the benefits of onchain systems without requiring extensive technical knowledge or infrastructure development.
The L1 RWA Chain itself is designed to withstand attacks that would overwhelm general-purpose blockchains if trillions of RWA assets were to be placed onchain. By incorporating a novel security model called Proof-of-Representation, tokenized RWAs themselves are part of the blockchain's security model, linking its security directly to the value of the assets.
Source: Relevance of onchain asset tokenization in ‘crypto winter’
The current onchain RWA market faces a classic bootstrapping challenge. Market participants are caught in a standoff: liquidity providers hesitate to commit without a robust selection of assets, while asset providers are reluctant to tokenize without guaranteed market depth. This self-reinforcing cycle has created a significant barrier to market growth. Plume addresses this challenge by breaking down the tokenization process into manageable components and providing an integrated management solution, creating a foundation for RWA projects to enter the market efficiently and experiment with various approaches.
The process of bringing RWAs onchain continues to face multiple obstacles. Providers must navigate regulatory uncertainty, access control complexities, technical implementation challenges, custody issues, varying license requirements across jurisdictions, and market fragmentation. For example, RealtyX, a real estate tokenization platform, reported that "out of three years spent building the service, two full years were consumed solely by establishing onchain service providers and workflows." This extended timeline for service implementation, primarily due to the need for individual projects to build complex service provider networks and workflows, significantly limits the realization of the RWA market's potential.
Source: Plume
To address these challenges, Plume has consolidated over 50 distinct features into a unified platform dedicated to RWA tokenization. These features incorporate essential legal and administrative functions required for onchain tokenization of RWAs, including custody services, on/off-ramps, and KYC/KYB compliance systems. Instead of implementing a fixed, predetermined framework, Plume delivers these features as configurable modules, enabling projects to select and implement only the functions they require. These features are integrated to operate cohesively, facilitating efficient data flow throughout the system.
At the core of the network lies Plume Arc, a comprehensive infrastructure solution for service providers seeking to register RWAs onchain. Through its streamlined approach to tokenization processes on a single platform, Plume Arc substantially reduces the time and resources required for asset issuance. Service providers can leverage Plume Network's regulatory compliance and asset management tools to operate RWA-based services with reduced technical complexity and legal uncertainty.
Plume's architecture reduces the significant entry barriers that have historically limited onchain adoption of RWAs. By handling the underlying infrastructure requirements, Plume allows projects to concentrate on developing their core services, which in turn helps expand both the quality and quantity of liquidity providers and asset suppliers in the RWA market.
2.2 RWAfi: Blurring the Boundaries Between Reality and Onchain
Source: 3DCenter.org
RWA represent a potential catalyst for the next growth phase in the onchain economy. The integration of off-chain assets into blockchain systems has substantially expanded the range of assets that can participate in the crypto ecosystem. This integration extends beyond merely adding new assets to the platform—it establishes direct connections with the physical world, enabling simultaneous expansion of both market value and user adoption in the crypto space.
Consider the tokenization of the GPU market as an example. GPU prices have shown significant volatility based on demand factors such as AI model training and Bitcoin mining. Traditionally, investors with insights into GPU price movements were limited to proxy investments like NVDA or BTC. However, in Plume's RWA market, the GPU price index can be brought onchain, allowing traders to directly speculate on GPU prices.
The scope of tokenization reaches beyond tangible assets into the realm of abstract concepts. Plume enables investment and hedging opportunities against macroeconomic indicators—from national and municipal economic growth rates to unemployment figures and even metrics regarding climate change. Through this approach, Plume's RWA framework dissolves traditional boundaries between conventional finance, cryptocurrency markets, and real-world economic activities, offering new perspectives on market structure and economic interaction.
Source: DeFi’s Permissionless Composability is Supercharging Innovation
Most of RWA projects have primarily focused on the fundamental task of registering off-chain assets in blockchain systems. Plume takes this a step further by introducing the concept of RWAfi - an onchain ecosystem built around RWAs. The true strength of an onchain ecosystem lies in its composability and permissionless nature. DeFi's growth wasn't driven by the success of individual protocols, but by multiple protocols interconnecting to create a larger ecosystem.
The same principle applies to RWA - its true potential emerges not just from registering assets onchain, but from creating an ecosystem where these assets can be traded, yield returns, serve as loan collateral, and interact with various protocols. For example, tokenized real estate could be used as collateral for borrow, or investors could build globally diversified portfolios through interactions with a single protocol. This innovation represents the vision that Plume promotes through RWAfi.
Source: Plume Network
Plume maintains a diverse ecosystem offering various services to realize RWAfi's potential. Users can generate returns through multiple channels, from staking in actual farms to earn 20% annual returns in stablecoins and tokens, to trading collectibles like sports cards and Pokémon cards onchain, and even making leveraged investments in Jordan sneakers or political events.
Plume ecosystem currently hosts over 180 projects across various domains, including RWA-specialized lending protocols, RWA-dedicated perpetual futures DEX, real estate and stock tokenization protocols, collectibles marketplaces, and consumer applications like hotel booking services. The services built on Plume go beyond simply moving assets in traditional finance onchain; they have the potential to create entirely new markets for previously illiquid or inaccessible assets.
