The Top Ten Truths Under the RWA Storm: Who is Wielding the Scythe, and Who is Being Played for Suckers?

Author: Shao Jia Dian

Recently, the trend of RWA (Real World Assets) has swept through social media in mainland China. From the blockchain circle to the finance sector, from self-media to investment groups, it seems that overnight, RWA has become synonymous with financial freedom. Various “RWA project parties,” “full-service providers,” and “mentors” have sprung up like mushrooms after rain, each swearing that RWA is the next big opportunity and that missing out will lead to a lifetime of regret. However, the more lively this circle becomes, the more chaotic it appears, with scams, speculation, and anxiety-peddling all mixed together. I really can’t help but want to throw a bucket of cold water on this—this circle is currently a boiling pot of excrement, with a few chives floating on the surface, while underneath, all there are are sickles bubbling away.

Today we won’t talk about technical details, but let’s peel back this layer of the emperor’s new clothes and discuss the 10 most heart-wrenching truths in the RWA circle. Buckle up, let’s hit the road.

Truth 1: RWA is a financing tool, not a wealth creation myth.

Many people, upon hearing RWA, imagine a picture of becoming rich overnight, thinking that if they casually throw any asset onto the blockchain, it will turn into a shiny “wealth code.” Wake up! The core of RWA is to tokenize (convert into tokens) real-world assets through blockchain technology, turning them into tradable digital assets. In simple terms, it is a financing tool that helps enterprises activate their assets or provides investors with more choices. It is not a lottery, nor is it a money printer.

Do you think buying RWA tokens is the same as buying a “future hundred times coin”? Stop dreaming. The revenue model of RWA is not much different from traditional financial products; it relies on the cash flow or appreciation potential of the underlying assets. Those who frequently shout “invest in RWA, achieve financial freedom” are most likely trying to cut your leeks. RWA can help companies solve financing problems, but it has nothing to do with the fantasies of ordinary people like you and me getting rich.

Truth 2: Genuine Compliance RWA, mainland Chinese users can hardly buy it.

If you think that RWA is a “feast that everyone can participate in,” then I have to throw a bucket of cold water on you: truly compliant RWA products, such as those issued in Hong Kong and Singapore, are basically out of reach for users in mainland China. Why? Because compliant RWA products must adhere to strict financial regulations, and the issuers must ensure that the investors’ identities and sources of funds are legitimate, while also complying with local securities laws, anti-money laundering laws, and other regulations.

The RWA products in Hong Kong are aimed at qualified investors, who must have proof of assets amounting to several million HKD, and must pass strict KYC (Know Your Customer) and AML (Anti-Money Laundering) checks. As an ordinary retail investor from the mainland, you can’t even open an account, let alone make a purchase. Those shouting “everyone can invest in RWA” in WeChat groups or on Douyin are not compliant products at all; most of them are scams or Ponzi schemes, specifically targeting your wallet.

Truth 3: Everyone who tells you “investing in RWA tokens can make money” is just preparing to cut your profits.

The most disgusting thing about the RWA circle in the mainland is the “air coins” and “capital disks” running all over the place. Now the most magical thing is that a group of people who can’t even tell the difference between ABS and REITs have started to teach people to play RWA. Their words are surprisingly consistent: “Liquidity explosion after traditional assets are on the chain”, “RWA tokens can be traded globally 24 hours a day”, "Hold and enjoy asset appreciation… Sound familiar? This is exactly the same slogan used in ICOs (Initial Coin Offerings) to “Blockchain Revolutions Everything”. Under the banner of RWA, these projects tell you to invest a few thousand yuan to buy their “RWA tokens” and you can sit back and wait for a hundredfold return. Brother, aunt, how can there be such a good thing? These so-called RWA tokens are not supported by underlying assets at all, and even the white paper is copied, which is purely an empty glove white wolf.

What’s even more outrageous is that some projects engage in multi-level distribution and recruit people for commissions, which is no different from a pyramid scheme. You invest money and might see “returns” that seem high in the short term, but that’s just earlier investors feeding later ones. When the funding scheme collapses, your principal won’t even make a bubble. Don’t believe those lies like “RWA is the future of blockchain” and “missing out on RWA means missing out on wealth”; real RWA is a serious financial product, not a casino where you gamble your fortune.

Truth 4: When companies do RWA, they should find brokers, lawyers, and accountants, not “intermediaries”.

Companies that want to do RWA also need to be discerning. There is a bizarre phenomenon in the RWA circle now: a group of self-proclaimed “RWA full-service providers” are more active than brokers, accountants, and lawyers combined. Many “RWA full-service providers” and “mentors” have emerged in the mainland, boasting about their capabilities to help you put assets on-chain, issue tokens, and sell globally. Haha, most of these people are just intermediaries, doing nothing more than acting as middlemen and making a consulting fee off you.

Doing RWA seriously is quite similar to doing ABS (Asset-Backed Securities) or REITs (Real Estate Investment Trusts). You need to find a triangle of professionals consisting of brokers, lawyers, and accountants. They will help you design the transaction structure, handle regulatory approvals, conduct due diligence, and perform valuations. What can intermediaries do? They can’t even understand the compliance processes and at most can only sketch a big picture for you, then charge you a “service fee.” If a company wants to do RWA, don’t be fooled by these “mentors”; finding a reliable financial institution is the right way.

Truth 5: Not everything can be RWA, assets that don’t sell off-chain are useless on-chain.

There is a classic saying in the RWA circle: “Poor liquidity of traditional assets? Just go on-chain! After going on-chain, it can be traded globally!” It seems like any asset thrown onto the blockchain can become a hot commodity. Brother, be realistic! If an asset can’t sell off-chain, why would it sell just because it’s on-chain? The essence of RWA is asset securitization, and the core lies in the quality of the underlying assets and the yield model. If your asset is already a mess, like a pile of unsellable inventory or an office building that can’t be rented out, then going on-chain won’t change that—it still won’t sell. Poor asset liquidity fundamentally means poor asset quality, and it has nothing to do with whether it’s on-chain or not.

Investors in Hong Kong are not fools; they are smart money. When they invest in RWA, they look at cash flow, risk exposure, and exit mechanisms. Your “annualized 20%” return model can be seen through at a glance as nonsense. RWA is not magic; on-chain and off-chain, the logic of assets remains unchanged. Those who advocate that “everything can be RWA” are just trying to make you spend money on trial and error so they can profit from it.

Truth 6: It’s not necessary to set up a main body in Hainan; data compliance is not that complicated.

The RWA circle in mainland China also has a “mystical” operation: many project parties say that to engage in RWA, one must establish a subject in Hainan to handle data export compliance. Come on, is it really that exaggerated? Data export does need to be compliant, but the national regulations such as the “Data Export Security Assessment Measures” have long established the process. Not all data exports require approval; only the cross-border transmission of sensitive data needs to be filed or undergo a security assessment. The compliance requirements for data export depend on various factors such as the specific type of data, the export scenario, etc., and not all situations require going to Hainan.

Moreover, Hainan’s special policies are mainly aimed at offshore businesses in the free trade port, not the only way out for RWA. For enterprises to engage in RWA, the core is to streamline the compliance process, such as finding lawyers to organize data compliance plans and communicating with regulators for filing. Don’t listen to those who say “you must go to Hainan” or “Hainan is a paradise for RWA”; the path to compliance has always been transparent, so why take so many twists and turns?

Truth 7: The RWA products in Hong Kong basically have no secondary market. Global trading? Think again!

There is a common “myth” in the RWA circle: RWA tokens can be traded globally with unbeatable liquidity. What is the reality? The Hong Kong SFC is particularly cautious about secondary trading. Currently, the RWA products issued in Hong Kong have only opened a very limited inter-institutional trading. The RWA of Ant Chain’s charging piles and the RWA of Xunying Group’s battery swap cabinets are essentially private placement products, and retail investors cannot even access the trading interface. Why? Because RWA is essentially a securitized asset, subject to strict financial regulation, and trading must comply with securities laws and exchange rules.

Do you think that by buying an RWA token, you can trade it globally 24 hours a day like Bitcoin? Think again! In Hong Kong, RWA products are typically traded by institutional or qualified investors, and retail investors cannot get involved at all. Those projects that boast about “global circulation of RWA” mostly use “blockchain” as a gimmick, while in reality, they are just closed capital pools. Liquidity? Nonexistent.

Truth 8: The RWA track is not a wealth code for ordinary people, don’t be deceived by anxiety marketing.

One of the most annoying things about the RWA circle is the overwhelming anxiety marketing. Phrases like “RWA is the future of blockchain”, “miss RWA and you miss out on wealth”, “ordinary people can also turn their lives around with RWA”—hearing these too often really makes one feel nauseous. Brother, RWA is a serious financial track, dealing with the combination of asset securitization and blockchain technology; what does that have to do with ordinary people making money?

The ones who can truly make money from the RWA track are either professional financial institutions or players who understand asset operations. Ordinary retail investors? At most, they can only buy some compliant RWA products and get a fixed return, which is not much different from buying bonds. Those who tout “RWA can make you rich overnight” are just trying to get you to pay for their “courses” or “tokens.” Don’t let anxiety hijack you; RWA is not your lifeline.

Truth 9: Compliance and regulation are the soul of RWA; RWA without compliance is just a blank check.

The greatest value of RWA lies in compliance and regulation. Without these two, what difference does RWA have from air coins? Compliant RWA products must have clear underlying assets, a transparent trading structure, and must undergo scrutiny from financial regulatory bodies. The reason why RWA in Hong Kong is reliable is due to the strict regulation from SFC (Securities and Futures Commission of Hong Kong), which protects the rights of investors.

In contrast, how many of those “RWA projects” on the mainland are truly compliant? Most don’t even have a white paper; where are the assets, and how is the revenue generated, all relies on mere words. If you invest money and the project team runs away, who do you turn to for help? The essence of RWA is compliance and regulation; without these two elements, an “RWA” is just an empty promise without any guarantees.

Truth 10: The issuance cost of RWA is not low and may be higher than traditional financing.

Lastly, many people think that RWA is a “low-cost financing tool,” but that is not the case at all. The issuance of RWA involves asset evaluation, legal due diligence, transaction structure design, blockchain development, and regulatory approval. Which step does not cost money? When calculated, the issuance cost of RWA may be higher than traditional loans and equity financing.

Especially for small and medium-sized enterprises, issuing RWA still faces high upfront costs, such as legal fees, audit fees, and technology development costs. In Hong Kong, RWA projects can easily cost several million HKD, and very few mainland companies can afford that. So, don’t listen to those lies about “RWA being the savior for small and medium-sized enterprises”; financing methods must be based on the company’s own situation, and RWA is not a panacea.

Conclusion: Wake up, RWA is not your lifeline.

Writing this article is not to deny the value of RWA—asset tokenization is indeed the trend of the future, making asset securitization more efficient and transparent, and it is certainly a direction for the integration of blockchain and finance. But the problem is: the current environment is too restless, too eager for quick success, and treats retail investors as fools. The pump-and-dump tokens, anxiety-selling marketing accounts, and intermediaries with sky-high prices have turned a serious financial track into a mess.

Ordinary people who want to participate in RWA can at most buy some compliant RWA products to earn stable returns, without expecting to get rich overnight. Companies that want to engage in RWA should seek professional institutions, go through compliance processes, and not be scammed by “full-service providers.” RWA is not a myth, nor is it a casino. Understand these 10 truths, and don’t let your wallet become someone else’s field of chives.

If, after reading this article, you’re going to jump into RWA’s fire pit - tell me your wallet key before you jump, and I’ll keep it for you.