RWA Token, why is the on-chain world also doing the "Augusta Club"?

Author: Prathik Desai

Compile: Block unicorn

In the 20th century, Augusta National Golf Club was heavily criticized for its obvious elitism. As the host of the Masters Tournament, the club has only 300 members, and the membership process is extremely strict, even prohibiting potential members from applying directly. Membership must be obtained by invitation only. Another way is to be nominated by someone and then patiently wait.

Critics call it the ultimate "gentlemen's club," and it indeed was before 2012. Worse still, for decades, the club prohibited African Americans from becoming members. Sports journalists questioned why the most prestigious events in the golf world would take place in a venue that excludes 99.9% of humanity. The public perception is extremely poor: a small group of wealthy white men controls the opportunities that millions long to experience.

The club takes pride in having some well-known members, including four-time Masters champion Arnold Palmer, business moguls Warren Buffett and Bill Gates, as well as the 34th President of the United States, Dwight D. Eisenhower.

Clearly, this is not the most democratic way to operate a club.

But why does Augusta National Golf Club seek to popularize world-class golf courses? Open access rarely creates high-end brands. The club pursues excellence. With only 300 members and almost no outside players, the course remains in its pristine condition all year round. Every detail is managed with great precision.

For example, it can withstand the rigorous maintenance required for the legendary brand of Augusta National Golf Club. Think about it, manually trimming the fairways with scissors, coloring the pine needles, and moving entire groves of trees to achieve the perfect television angle. Fewer stakeholders mean greater precision. When access is controlled, quality can reach perfection.

The same logic explains one of the most misunderstood trends in today's cryptocurrency space: why real-world asset (RWA) tokens—digital representations of everything from government bonds to real estate—are predominantly held by a small number of wallets.

But the exclusivity here is not based on gender or race.

BlackRock's tokenized money market fund BUIDL (BlackRock Dollar Institutional Digital Liquidity Fund) has approximately $2.4 billion in assets, but as of July 31, 2025, it only has 81 holders.

Similarly, Ondo Finance's US Treasury Fund OUSG (Ondo Short-Term US Government Bond Fund) shows only 75 holders on-chain. In contrast, major stablecoins like USDT/USDC are held by millions of addresses (approximately 175 million stablecoin holders across networks).

At first glance, these digital dollar assets seem to embody all the issues that blockchain was supposed to solve: centralization, gatekeeper mechanisms, exclusivity. Since you can copy and paste a wallet address, why can't you purchase these yield-generating tokens like you would other crypto assets?

The answer lies in the same operational logic that the Augusta National Golf Club maintains its exclusive operating rights. The design of these tokens is centralized.

Regulated Reality

The history of financial exclusivity is often a story about maintaining privilege through exclusion. However, in these cases, exclusivity serves different purposes: to keep the system compliant, efficient, and sustainable.

Most RWA tokens represent securities or funds and cannot be freely offered to the public without registration. Instead, issuers use private or limited offerings regulated by the U.S. Securities and Exchange Commission (SEC), such as Regulation D in the U.S. or Reg S offshore, to restrict tokens to qualified or compliant investors.

BUIDL (BlackRock) offered through Securitize is only open to qualified purchasers in the United States (a subset of qualified investors, with a minimum investment amount of approximately $5 million).

Similarly, Ondo's OUSG (tokenized government bond fund) requires investors to be both qualified investors and qualified purchasers.

These are not arbitrary barriers. They are the requirements verified by the SEC under Regulation D 506(c), which determine who can legally own certain types of financial instruments.

When we observe tokens designed for different regulatory frameworks, the contrast becomes more apparent. Ondo's USDY is only targeted at non-U.S. investors (sold overseas under Reg S). By circumventing U.S. restrictions, it achieves a broader distribution, allowing non-U.S. individuals who complete KYC to purchase USDY. The number of USDY holders is 15,000, which, although not a large number, far exceeds the 75 holders of OUSG.

The same company, the same tokenized asset, but with different regulatory frameworks. The result is a distribution difference of up to 200 times.

This is where the comparison between Augusta National Golf Club and RWA becomes precise. To achieve the above goals, the RWA token platform incorporates compliance into the token code or surrounding infrastructure. Unlike freely tradable ERC-20 tokens, these tokens are typically subject to transfer restrictions at the smart contract level.

Most security tokens use a whitelist / blacklist model (through standards such as ERC-1404 or ERC-3643), where only pre-approved wallet addresses can receive or send tokens. If an address is not on the issuer's whitelist, the token's smart contract will prevent any transfers to that address.

It's like a guest list executed by code. You cannot just show up at the door with a wallet address and demand entry. Someone must verify your identity, check your accredited investor status, and add you to the approved list. Only then will the smart contract allow you to receive tokens.

Backed Finance has two forms of tokens - an unrestricted version and a wrapped "compliant" token. The wrapped token "only allows whitelisted addresses to interact with the token", and Backed will automatically add users to the whitelist after they complete KYC.

Efficiency Proof

From the outside, this system appears exclusive. From the inside, it seems efficient. Why? From the issuer's perspective, given their business model and constraints, a centralized holder base is often a rational or even intentional choice.

Each additional token holder represents a potential compliance risk and extra cost, whether on-chain or off-chain. Despite these upfront compliance costs, on-chain tracks bring long-term operational efficiencies, especially in terms of automatically updating net asset value (NAV), instant settlement compared to traditional market T+2, and programmability (such as automatic interest distribution).

By implementing tokenization and deploying distributed ledger technology (DLT), asset managers can reduce operational costs by 23%, equivalent to 0.13% of assets under management (AUM), according to the global fund network Calastone in its white paper.

It predicts that tokenization can help an average fund improve its profit and loss statement, increasing profits by $3.1 million to $7.9 million, including an increase in revenue of $1.4 million to $4.2 million through a more competitive Total Expense Ratio (TER).

The entire asset management industry can achieve a total saving of $135.3 billion in UCITS, UK, and US (40 Act) funds.

By limiting distribution to known and vetted participants, issuers can more easily ensure that each holder meets the requirements (qualified investor status, jurisdiction checks, etc.) and reduce the risk of tokens inadvertently falling into the hands of bad actors.

This makes sense mathematically as well. By targeting a small number of large investors instead of a large number of small investors, issuers can save on onboarding costs, investor relations, and ongoing compliance monitoring expenses. For a $500 million fund, reaching capacity through five investors each contributing $100 million is more commercially viable than through 50,000 investors each contributing $10,000. The management of the former is also much simpler. Although on-chain transfers are automatically settled, the compliance layer involving KYC, accreditation, and whitelisting remains off-chain and expands linearly with the number of investors.

Many RWA token projects are explicitly targeted at institutional or corporate investors, rather than retail investors. Their value propositions typically revolve around providing crypto-native yield channels for fund managers, fintech platforms, or cryptocurrency funds with large cash balances.

When Franklin Templeton launched its tokenized money market fund, they did not intend to replace your bank checking account. They aimed to provide a way for CFOs of Fortune 500 companies to earn returns on their idle corporate cash reserves.

Exception for stablecoins

At the same time, the comparison with stablecoins is not entirely fair, as stablecoins address regulatory challenges in different ways. USDC and USDT are not securities themselves; they are designed as digital representations of the US dollar rather than investment contracts. This classification is achieved through careful legal structuring and regulatory engagement, allowing them to circulate freely without investor restrictions.

But even stablecoins require significant infrastructure investment and regulatory clarity to achieve their current distribution scale. Circle spent years building compliance systems, collaborating with regulators, and establishing banking relationships. The "permissionless" experience that users enjoy today is built on a highly permissioned foundation.

RWA tokens face various challenges: they represent real securities with actual investment returns and are therefore subject to securities laws. Until there is a clearer regulatory framework for tokenized securities (the recently passed GENIUS Act begins to address this issue), issuers must operate within the existing restrictions.

Future Outlook

The current centralization of RWA tokens is after all the closest manifestation of traditional financial operating methods. Considering traditional private equity funds or bond issuances restricted to qualified institutional buyers, participants are usually limited to a small number of investors.

The difference lies in transparency. In traditional finance, you do not know how many investors hold a particular fund or bond—this information is private. Only large holders are required to make regulatory disclosures. On-chain, every wallet address is visible, making centralization obvious.

Moreover, exclusivity is not a characteristic of on-chain tokenized assets. This has always been the case. The value of RWA tokenization lies in making it easier for issuers to manage these funds.

Figure's Digital Asset Registration Technology (DART) reduces the due diligence cost of loans from $500 per loan to $15, while shortening the settlement time from weeks to days. Goldman Sachs and Jefferies can now easily purchase loan pools as if trading tokens. Meanwhile, tokenized government bonds like BUIDL have suddenly become programmable, allowing you to use these ordinary government bonds as collateral to trade Bitcoin derivatives on Deribit.

Ultimately, the noble goal of democratized access can be achieved through a regulatory framework. Exclusivity is a temporary regulatory friction. Programmability is a permanent infrastructure upgrade that makes traditional assets more flexible and tradable.

Returning to the Augusta National Golf Club, their controlled membership model makes the golf championship a perfect synonym. The limited number of members means that every detail can be managed precisely. Exclusivity creates conditions for excellence, but paradoxically, it also makes it more cost-effective. However, providing the same precision and hospitality for a broader and more inclusive audience would exponentially increase costs.

The controlled holder base also creates convenience for fund issuers to ensure compliance, efficiency, and sustainability.

But the barriers on the chain are gradually lowering. With the evolution of regulatory frameworks, the emergence of packaged products, and the maturity of infrastructure, more people will gain access to these benefits. In some cases, this access may be achieved through intermediaries and products designed for broader distribution (such as the unrestricted version of Backed Finance) rather than through direct ownership of the underlying tokens.

The story is still in its early stages, but understanding why things appear the way they do today is key to understanding the transformations that are about to happen.