Written by: JiaYi
I've thought for a long time about whether to write this. I have projects in the RWA space, so writing this feels a bit like slapping my own face. But this question really deserves a direct answer.
On-chain treasuries exceed $4 B+, having grown more than threefold in a year. BlackRock's BUIDL fund attracted hundreds of millions in a single quarter. Franklin Templeton, HSBC are all entering. RWA TVL is one of the few metrics still rising in this bear market.
But if you look at the tokens of these projects—they're almost all green, the downward kind. Some have fallen over 90% from their highs.
Why?
Some would say: retail can't get in. This answer is half right, but it's outdated. There are already projects in the market solving this—just register, and retail users can also participate in RWA yields. The door for user access is open. But the token price is still falling.
I believe many RWA projects fundamentally misunderstood the nature of the project from the start
RWA product + TOKEN need to fulfill their respective roles. The token economic model was designed wrong from the beginning.
The most common death formula for all RWA-related TVL category projects looks like this:
Users deposit TVL to get RWA yields → simultaneously issue token as extra reward → users continuously sell token → token falls → issue even more tokens as subsidy → no one dares to buy the token
The essence of this logic is: the token becomes a subsidy tool, not a value carrier.
If you think about the business logic this way, then token holders have only one action—sell. No one needs to buy the token, because there's no extra benefit in holding it. To get RWA yields, you just need to deposit assets, you don't need to hold the token at all. This becomes a market with only selling pressure, no buying interest.
Many DeFi projects died here. Deposit TVL for yield, then get airdrops, then get token rewards. Issuing round after round. No one buys, only sells. The project's treasury issues more and more tokens, the price gets driven lower and lower, eventually falling into liquidity death.
The RWA sector is now repeating this mistake.
So what should be done?
Because I work on strategic consulting and growth strategies, stripping the problem down to its core, it's about the RWA business itself.
RWA projects should focus their resources on one thing—finding truly good RWA assets.
Not designing increasingly complex token incentive systems.
What is a good RWA asset? Four criteria:
1. Attractive APY. The yield must make users feel it's worthwhile, competitive compared to TradFi, and not lower than bank wealth management products. 2. Consensus. The asset itself must have market recognition—treasuries, credit products backed by well-known institutions—something users understand and trust. 3. Stability. It's not a high-risk, high-reward speculative product. The core value proposition of RWA is stable real yield. 4. Security. Risk control on the asset side is solid; the underlying assets won't blow up.
When the underlying assets are good enough, users will naturally come for the yield. At this point, the token's role should be: holding the token unlocks better assets, higher yield ratios, and priority allocation.
Demand transmits from the asset side to the token side, creating a real reason to buy. Not the other way around—using token subsidies to attract users, only to find no one wants to hold the token in the end.
The RWA narrative is real, the data is real, institutions entering is real.
But no matter how strong the narrative, it can't support a token model flawed by design.
The next RWA project that truly breaks out, I predict, will be the one that first solidifies the asset side, then talks about token value. Not relying on token rewards to pull TVL, but relying on TVL to support the token. Get the order wrong, and no narrative or market guru can save it.
Good assets attract users, users support the token. Doing it the other way is using the token to subsidize a product no one truly wants.
