The "Pseudo RWA" of the Malu Grape: A Digital Dilemma of Agricultural Assets Under Localized Compromise

1. Introduction

On November 25, 2024, the Shanghai Malu Grape Asset On-Chain Project made a high-profile debut as the "first case of RWA (Real World Asset Tokenization) in Chinese agriculture." The project claims to achieve "data assetization of vineyards" through blockchain technology, and simultaneously completed 10 million yuan in equity financing and 200,000 yuan in NFT financing at the Shanghai Data Exchange. The official narrative positions it as a benchmark for "technology empowering实体农业 (entity agriculture)," sparking widespread discussions in the industry about the localization path of RWA.

However, peeling back the surface halo, the essence of this project is far from a true RWA innovation. The so-called "tokenization" is essentially a traditional financing reconstruction with NFT digital collectibles as the compliant shell and SPV equity structure as the core—where income rights tokens are castrated, governance rights still belong to centralized entities, and consumer NFTs merely serve as a presale card function. This "de-financialization" survival strategy born under high regulatory pressure, although breaking out in the name of technology, falls into a deep dilemma of fragmented rights, suppressed liquidity, and lack of empowerment for producers.

This article will use the Malu Grape project as a dissection sample, revealing three essential contradictions through its illusion of "RWA benchmark":

• Technological Tooling Dilemma: Blockchain has become a credibility enhancement tool, failing to touch upon the transformation of agricultural production relations;
• Regulatory arbitrage logic: circumventing policy red lines through SPV equity isolation and the non-securitization definition of NFTs;
• The cost of localization compromise: the complete separation of data revenue rights from producers (farmers), deviating from the original intention of RWA's inclusive approach.

By deconstructing the entire process from asset screening, chain mapping to financing design, this article will argue that the core proposition of digitizing agricultural assets in China is not about technological replication, but how to balance compliance survival with real value creation under policy constraints. The paradoxical practices of Malu grapes provide a crucial mirror for exploring the limitations and possibilities of local RWA.

2. Process Breakdown

1. Asset Screening and Compliance Confirmation

RWA refers to the tokenization of real-world physical assets or financial assets through blockchain technology, enabling them to circulate, trade, and be managed in a decentralized network.

This requires the project party to screen the target assets before the project starts. On one hand, it is to ensure that the asset attributes are suitable for tokenization, and on the other hand, to ensure compliance issues of the assets in the real world:

• Must be real and valuable assets
• Has stable cash flow or appreciation potential
• Clear ownership, no disputes

"Malou Grapes" is a geographical indication agricultural product from Shanghai, with over 40 years of cultivation history. Its excellent quality and unique taste are deeply loved by consumers.

Data shows that in 2023, the area of concentrated planting of Malu grapes reached 4051.96 mu, with a total output of 4437.83 tons and a total output value of 107 million yuan, averaging an output value of 27320 yuan per mu and an average price of 24 yuan/kg. The planting area and economic benefits of Malu grapes hold an important position in Shanghai's grape industry, accounting for 12.9% of the grape planting area in Shanghai and 17.17% of the total economic benefits.

Currently, Malu Town has formed an industrialized joint development model of "research institute + enterprise + cooperative + farmers." The research institute is responsible for the research and promotion of new varieties and technologies, the enterprise is responsible for brand building and marketing, the cooperative is responsible for organizing farmers for standardized production, and the farmers carry out planting and management according to the requirements.

In terms of product quality, Malu grapes include more than 50 varieties such as Black, Happy, Jingmi, Giant Peak, Giant Rose, Drunken Golden Fragrance, Sun Rose, and Nina Queen. It has established a comprehensive management system including field archive records, testing and inspection, packaging labeling, quality traceability, and logo usage. Coupled with a digital cloud platform, it has achieved "one string, one code" traceability management, making it an industry benchmark for digital agricultural production, and it possesses the asset conditions for RWA tokenization.

2. Technical Packaging and On-chain Mapping

One of the key aspects of RWA projects is to ensure the authenticity of off-chain data once it is on-chain, which is the decisive factor for the success of RWA projects.

( 1) Data Collection

In the process of grape cultivation in Malu, a tight data collection network is built using IoT devices.

In terms of environmental data, real-time collection of environmental parameters such as temperature and humidity, light intensity, and soil pH value during the grape planting process, as well as recording agricultural activities (such as irrigation and fertilization) data.

In terms of economic data, sales data (such as sales volume, price), logistics information (transportation duration, loss rate), and brand value (such as geographical indication certification, certification information, consumer reputation, etc.) will be included in the asset package.

( 2) Asset Encapsulation

Integrate data from over 300 sensors across 600 acres of vineyards (such as soil pH, temperature and humidity, growth cycles, etc.) to build the "Data Asset Shell (DAS)". DAS is an innovative "Data Asset Shell" service system launched by the Shanghai Data Exchange, responsible for compliance certification of data and conducting standardized processing. Different types and sources of data are unified and organized, enabling orderly integration on the blockchain and forming "true data" that is jointly recognized by multiple parties on-chain (including growers, operators, regulatory agencies, investors, etc.), laying a solid foundation for subsequent asset valuation and trading.

After the data packaging is completed, it is stored on the blockchain through the SwiftLink platform, achieving full-process trust in agricultural production. Traceability relies on blockchain technologies such as the SwiftLink management platform, allowing the massive data collected to be instantly uploaded to the blockchain. The immutable nature of blockchain ensures that once the data is entered, it cannot be maliciously altered, thus guaranteeing the authenticity and integrity of the data.

On the other hand, using AMC (Multi-Chain Consistency) technology, data is synchronously stored and verified on the "Pudong Digital Chain" in Shanghai, achieving on-chain credit enhancement.

( 3) Asset Valuation

Conduct a comprehensive valuation of the integrated data assets of the Maru grapes using various scientific methods.

The cost-plus pricing method accounts for a series of direct input costs from the investment in data collection equipment, labor costs, to data processing operations; the market premium method evaluates the additional value that the brand brings to the asset by combining the premium performance of the Malu grape geographical indication brand in the market; the income discounting method predicts the increased revenue from data applications in the coming years, such as the benefits of precision irrigation reducing costs and traceability systems reducing counterfeit goods and enhancing brand value.

( 4) Token Model Design

Convert assets into tradable digital tokens based on the valuation results.

The project has designed a layered token economic model, where the revenue rights tokens account for 70%, closely tied to grape sales revenue, providing investors with a benchmark dividend of approximately 6% annualized, attracting stable investors such as bank wealth management funds.

The governance token accounts for 20%, and holders of this token have voting rights on significant decisions regarding the vineyard (such as the introduction of new varieties and the expansion of sales channels), attracting industrial investors to participate deeply.

The share of consumption rights tokens is 10%, bound to product discount rights. For example, holding this token allows for an 20% discount on Ma Lu grapes, which enhances the stickiness of C-end users while recouping a portion of sales funds in advance.

3. SPV Architecture and Financing Design

In October 2023, Shanghai Zuoran Xinhui Electronic Technology Co., Ltd. and Shanghai Zuoran Investment Management Co., Ltd. jointly invested 10 million yuan to establish Zuoran Xinhui (Shanghai) Data Technology Co., Ltd. as a dedicated SPV for the project.

SPV independently carries the data asset package of Malu grapes (including agricultural product production data and brand rights), completely isolating it from the other businesses of the parent company to avoid risk transmission.

The 100% equity of SPV Company is custodized at the Shanghai Equity Custody Registration Center and is verified on the blockchain platform "Guyi Chain", achieving transparency of ownership.

At this point, the project has undergone significant and interesting changes.

Due to the operation of Malu grapes in the mainland and their circulation on the Shanghai Data Exchange, according to the "Announcement on Preventing the Risks of Token Issuance Financing" (2017) and the "Initiative to Prevent Financial Risks of NFTs" in mainland China, the issuance of securitized tokens is prohibited in mainland China. Moreover, Malu grapes ultimately did not finance and circulate according to the original token model, but instead chose to sacrifice liquidity and adopt the "de-financialization" RWA route.

In practice, the consumption rights token does not appear in the form of tokens, but rather as NFT digital collectibles, clearly defined as "digital souvenirs," avoiding the red line of the "Announcement on Preventing Risks of Token Issuance and Financing." Finally, 2024 NFTs are issued (including 1924 basic versions and 100 rare versions), with 2013 publicly sold (accounting for 99.3%), and the project party retains 11 (for brand cooperation or airdrops), with an initial price of 99 yuan each. Thus, the Malu Grape project NFT completed a financing of 200,000 yuan.

Next, governance rights belong to the project party, while profit rights belong to the investors. The profit rights and governance rights are integrated into the SPV equity structure, open only to institutions. Malu Grape has secured 10 million yuan in financing from investors. The 10 million yuan financing is based on SPV equity trading, where investors indirectly control the data asset profit rights through shareholding, in compliance with the regulatory framework of the Securities Law regarding equity trading.

4. Liquidity Management

( 1) Issuance Status

On November 25, 2024, the Malu Grape NFT digital collection will be publicly issued on the Shanghai Data Exchange, and it will sell out quickly after the issuance. Currently, it is only tradable on the secondary market.

Each NFT includes two layers: basic rights and ancillary rights.

Basic Rights: Includes 1924 basic NFTs and 100 rare NFTs. The basic NFTs come with a "Sunshine Rose" grape 2 Jin voucher worth about 200 yuan, valid until December 8, 2025; the rare NFTs come with a "Queen Nina" grape 2 Jin voucher + 2 tickets to Malu Park, worth about 300 yuan, with the same validity as the basic NFTs.

Subsidiary Rights: You can access the "Maluxingqiu" interactive platform to participate in the virtual grape planting game and exchange points. The top 50 users by trading volume before December 31, 2024, will receive an additional "Early Maturing Variety" pickup card.

( 2) Circulation Mechanism

Trading restrictions: Trading is only allowed from December 9, 2024 to December 8, 2025, with mandatory delisting upon expiration; individual user holding limit ≤ 5% of total issuance (approximately 101 units), exceeding this limit requires splitting for sale; after a single sale, a waiting period of 5 trading days is required before trading can occur again.

Redemption and Exit: After the gift card is activated, NFT can only be redeemed on-chain, retaining only the eligibility for platform interaction; if the vineyard is damaged (e.g., by fire), and the project party has not disclosed a compensation plan, there are gaps in rights protection.

( 3) Market Performance

3. Power Map

Tokenization of real assets is a capital operation that requires the participation and collaboration of multiple parties. Below, we will analyze the various participants and their main responsibilities in the Malu Grapes project from the perspective of the stakeholders, and re-examine the project value of Malu Grapes from a global perspective.

We can categorize the participants into two types: core participants and supporting institutions.

1. Core Participants

Left Bank Chip Wisdom (project operator) is responsible for integrating grape production data and brand qualifications, issuing NFT digital assets, and managing equity financing funds, making it a core participant in the entire project.

Shanghai Data Exchange (compliance trading platform), responsible for providing "Data Asset Shell (DAS)" on-chain proof of service, building NFT trading channels, and ensuring compliance with information disclosure.

The Economic Development Service Center of Malu Town (government coordinating party) is responsible for policy endorsement and resource docking.

"Malu Grapes" planting enterprise (underlying asset provider): provides physical grape assets and generates agricultural data.

2. Supporting Institutions

Technical infrastructure service provider: providing underlying blockchain technology support to achieve data on-chain verification.

Compliance and Risk Control Institutions: Design compliance frameworks and audit the authenticity of real assets.

Asset appraisal agency: asset pricing.

Equity Custodian: Custodianship of SPV company equity to ensure transparency in equity transactions.

Through the above sorting of the functions of various participants, we can see that the participant structure of the Malu Grape RWA project is essentially a market-oriented co-governance experiment under government guidance. By utilizing a three-tiered nesting of "State-Owned Asset Chain (Pudong Digital Chain) + SPV + Parent-Child Brand", it not only ensures compliance (avoiding securitization risks) but also activates the efficiency of the industrial chain (with per acre output value reaching 1.7 times the Shanghai average). This is a complex economic activity that requires multi-party coordination and fully mobilizes production factors.

IV. Root Cause Analysis: How Pseudo RWA's Three Characteristics Anchor Localization Dilemma

Therefore, by breaking down the Malu grape project, we can discover a fact. Unlike what is said in some promotions, Malu grapes do not belong to a true RWA project for the following reasons:

A typical RWA project represents a corresponding share of income after asset tokenization, and can circulate freely worldwide, with dividends automatically distributed through smart contracts.

As defined by RWA - Real World Asset, it refers to the tokenization of physical or financial assets from the real world using blockchain technology, allowing them to circulate, trade, and be managed in a decentralized network.

In contrast, the Malu grape project strictly defines the 2024 NFT as a digital collectible, only binding consumption rights, and is anchored to the ownership of future grapes, without involving potential future profits. At the same time, it imposes strict restrictions on liquidity, essentially classifying it as a pre-sale of agricultural products.

From the perspective of revenue rights, NFT holders only receive grape redemption cards (worth 200-300 yuan) and game points, and cannot share in the data asset profits. These profits are entirely allocated to SPV shareholders, completely separating data profits from users. The project party claims "token-bound profit sharing," but in reality, the SPV equity structure completely isolates the profit rights from NFT holders.

From the perspective of governance, whether it is the introduction of new varieties or technological upgrades, it is still controlled by the SPV company, local government (Maluzhen Economic Service Center), and technology provider (Ant Chain), with no public voting allowed. "On-chain governance" is essentially an internal decision-making tool of the SPV, which is contrary to the concept of DAO.

In summary, the Shanghai Malu Grape RWA is essentially a capital operation where an NFT serves as a compliant shell, carrying the core value of equity financing. It is a "blockchain shell + traditional financial core," with technology only serving to enhance credibility rather than liberalization, and it is a "Chinese-style" RWA project with high government involvement.

On one hand, we should face the correct positioning of this project (essentially equity financing); on the other hand, we should also recognize the duality of the project, which is a compromise under compliance pressure, while also opening up technological innovation in the cracks, providing groundbreaking reference significance for exploring RWA projects in the current agricultural field in mainland China.

V. Breaking the Wall Experiment: A Ladder Path from Realistic Compromise to Ideal Reconstruction

The duality of the Malu project - surviving through technical compromises under regulatory constraints, while sacrificing the core value of RWA - reflects the deep-seated dilemma of digitalization of agricultural assets in China: when "compliance survival" stifles "real innovation," where is the breakthrough path? If we replicate its SPV isolation technique and NFT dematerialization approach, we will fall into a cycle of "dependency on policy privileges" and "lack of empowerment for producers"; if we return to a true RWA path, we must confront threefold constraints: policy repression, technological costs, and non-standard distribution of rights. The following breakout experiment may be a gap to tear through the iron curtain.

1. Project Promotion Difficulty Analysis

The core value of the Malu Grape Project lies in pioneering a localized path for agricultural RWA, but its promotion faces three structural obstacles:

( 1) The non-replicability of policy dependence

The project is deeply reliant on the Shanghai Pujiang Digital Chain (State-owned Capital Alliance Chain) and government coordination mechanisms, while most agricultural areas across the country lack such infrastructure support. For example, non-pilot areas find it difficult to obtain compliance endorsements from data exchanges, and policies prohibiting the trading of homogeneous tokens in mainland China force other agricultural enterprises to only imitate their "consumption-type NFTs" as a compromise, making it impossible to achieve true rights to profit.

( 2) The scale threshold of technological costs

In the 600-acre core area, more than 300 IoT sensors are deployed, with an average investment of over 20,000 yuan per acre, far exceeding the affordability of small and medium-sized farmers. The premium rate for ordinary agricultural products (such as Chinese cabbage) is less than 5%, which cannot cover costs, while the Malu grape relies on a 20% brand premium from geographical indications to achieve breakeven. If promoted to low-value-added categories, it requires a regionally built and shared IoT platform (such as county agricultural cloud), but cross-entity data integration faces ownership disputes.

( 3) Limitations of Asset Standardization in the Industry

Grapes are easy to standardize in terms of traceability and production control due to the "one code per bunch" system, but categories like tea and aquatic products lack unified data collection standards. For example, the quality of tea is influenced by subjective factors such as microclimate and picking methods, making it difficult to generate credible on-chain data packets, leading to a lack of consensus basis for asset valuation.

( 4) Essential Contradiction

The Malu model is essentially a special case of "strong policy zone + high premium products," and its technological dividends are only applicable to scarce agricultural products such as Wuchang rice and Yangcheng Lake crabs. Replicating this in ordinary agricultural areas requires breaking through cost constraints and the dilemma of data property rights distribution—EU regulations stipulate that original data producers (farmers) should enjoy 40% of the revenue rights, while in the Malu project, the 27 cooperatives only act as data providers and do not participate in SPV dividends.

2. Conditions for the complete implementation of RWA

( 1) Asset Securitization Compliance First

Avoid regulatory pitfalls in the mainland and choose jurisdictions like Hong Kong/Singapore that recognize revenue rights tokens. The underlying assets must have stable cash flow (e.g., annual revenue from charging piles > 30 million yuan), approved by the CSRC with a Type 1 license, and disclose asset audit reports. The Malu project, affected by climate fluctuations on grape yields, was forced to replace hard cash flow with "data value potential," which weakened the credibility of asset anchoring.

( 2) Technical Penetration Design

Use oracles (such as Chainlink) to verify the status of off-chain assets in real-time, ensuring a strong correlation between token value and physical assets. In comparison, Malu only stores environmental data on the Pujiang blockchain and has not achieved automatic on-chain revenue; its NFT holders cannot receive dividends through smart contracts. True RWA requires the deployment of the ERC-3643 standard contract (including a dividend module), supporting daily revenue distribution automatically to wallets.

( 3) Dual-layer Liquidity Construction

The primary market offers private placements to qualified investors through licensed exchanges (such as Hong Kong HashKey); the secondary market connects to DEXs like Uniswap, with market makers ensuring trading depth. In contrast, the Malu NFT is limited to trading on the Shanghai Data Exchange platform, with an average daily transaction volume of less than 10 trades, and a forced delisting in 2025, artificially suppressing liquidity.

( 4) Key Leap

The real RWA needs to complete the cross-border separation of domestic assets and overseas financial ends. The Hainan Free Trade Port QFLP channel can serve as a springboard—domestic state-owned asset chain certificate of ownership, and overseas SPV issues revenue tokens, thus balancing compliance and capital freedom.

3. Agriculture RWA 4.0 Future Outlook

The current Malu project is stalled at Stage B (assets can be split but are not tradable), requiring the Hong Kong/Hainan sandbox to achieve the C→D leap. The development of agricultural RWA needs to break through institutional and technical bottlenecks in stages, with the ultimate goal of achieving the return of producer sovereignty.

( 1) Short-term: Mixed rights experiment in the sandbox

Implement a "consumption-type NFT + micro-revenue rights" hybrid model in pilot areas such as Hainan and Hengqin, with an annualized yield cap set at 3% to comply with consumption rebate regulatory standards. For example, the Hainan durian project plans to return 1.5% of harvesting profits to NFT holders through smart contracts, which avoids securities recognition and enhances user stickiness. At the same time, establish an "agricultural data bank" to support pledge loans based on planting data from tea gardens, rice fields, etc., replicating the 1.5 million yuan bank credit model of the Malu project.

( 2) Mid-term: Breakthrough in Data Property Legislation

Promote the introduction of the "Regulations on the Registration and Management of Agricultural Data Assets" and clarify the share of rights among three parties: farmers account for 40% of the original data benefits (as providers of production materials), cooperatives account for 30% (data integrators), and technology platforms/government account for 30% (infrastructure investment and regulatory costs). Solidify the rules for the division of rights through on-chain certification to address the pain point of "missing governance rights" for small farmers in the Malu project.

( 3) Long-term: Producer Sovereignty under DAO Governance

Building an On-Chain Cooperative Model: Farmers gain voting weight based on their contribution of land data, while consumers participate in variety introduction decisions through governance tokens. For example, when the Internet of Things detects a 15% improvement in drought resistance for a certain grape variety, the DAO votes to expand the planting area, and the smart contract automatically adjusts the production plan and allocates profits. This architecture makes code the "hoe" of the new era, reconstructing the subjectivity of small farmers in the digital economy.

( 4) China Paradigm Kernel

The ultimate value of agricultural RWA lies in "technology is globally applicable, while production relations are locally reconstructed." In the short term, there is a transition to accepting consumption-type NFTs, while in the long term, on-chain cooperatives (DAOs) will empower farmers with data pricing rights, allowing producers in the fields to truly become the primary distributors of digital dividends.

6. Conclusion

The essence of the Malu Grape Project is a revolution shackled by chains—when the distributed ideals of blockchain encounter the iron walls of real-world regulation, it chooses to retreat in order to advance: using the "compliance shell" of consumer-oriented NFTs to cover the true breakthrough of Internet of Things and traceability technology, leveraging a small force with 200,000 digital delivery vouchers to pry open a 10 million equity financing for industrial upgrading. This dialectic of compromise and innovation is akin to a seed growing in the cracks of a rock: bending down is not to yield, but to gather strength to break the ground.

The true legacy of the Malu Grape Project is that it provides a dialectical model for the digitalization of agriculture in China:

• It proves that under high-pressure regulation, consumer NFTs are the only safe entry point, while the opening of income rights needs to go through offshore hubs (such as the Hainan QFLP channel);
• It reveals that IoT + blockchain can achieve "asset disassembly", but "capital accessibility" relies on breakthroughs in cross-border liquidity.
• It signifies that the endpoint of RWA should be the awakening of producer sovereignty - when farmers grasp data pricing power through DAO, technological innovation truly elevates to become the engine of rural revitalization;

The core proposition of agricultural modernization has never been the replication of technology, but the reconstruction of production relations. All "atypical RWA" are shadows cast by the times. The compromise and breakthrough of the Malu grape is like a seed buried deep in the soil – it may not reach the sky, but in its curved posture, it has indicated the direction for others to break through the soil.