The popularity of RWA is rising, and the integration of encryption and TradFi markets is accelerating.

Recently, the yield on the US 10-year Treasury bond has crossed the 4% mark for three consecutive days, which means that fixed income investments in the traditional market have become more attractive. This may lead some institutional funds from the crypto market to flow into the traditional market in search of more stable returns.

At the same time, the development of physical assets (RWA) track has also created opportunities to attract incremental users from the traditional market and enhance liquidity. By putting traditional assets on the blockchain and tokenizing them, RWA can provide traditional market participants with more convenient investment methods, while also opening up channels for them to enter the crypto market. This bi-directional liquidity helps to increase overall market liquidity and promote more efficient capital allocation.

The introduction of RWA tokens has built more liquidity bridges between the traditional market and the crypto market. Traditional market participants can use RWA tokens to participate in the crypto market, while crypto market participants can enter the traditional market through RWA tokens. This increase in cross-market liquidity is beneficial for improving market efficiency and attracting more investors and traders.

In terms of infrastructure, decentralized finance ( DeFi ) systems are built on blockchain technology, providing a range of financial services such as lending, trading, and liquidity mining. RWA tokens, representing traditional assets in DeFi, can offer users a more diverse range of asset choices and seamlessly integrate with the DeFi ecosystem. This allows RWA to showcase immense potential in the DeFi space, attracting increasing attention.

Investors usually aim to reduce risk through diversification and asset variety. RWA tokens provide a way to combine traditional assets with the crypto market, allowing investors to access a variety of investment opportunities on one platform. This demand for asset diversification may drive investors' interest in RWA and lead them to include it in their portfolios.

In the lending agreement space, there are three main participants worth paying attention to:

Maple was established in 2019, led by traditional financial bankers and credit investment professionals. The platform aims to improve traditional capital markets by providing infrastructure for credit experts to operate on-chain lending businesses and connecting institutional lenders with borrowers. Maple combines industry compliance standards and due diligence with transparent, frictionless lending enabled by smart contracts and blockchain technology. Its on-chain business primarily offers lending in USDC and wETH, and in April this year, it announced plans to launch an on-chain lending pool for investing in U.S. Treasury bonds.

TrueFi is developed and managed by the TrustToken team, emphasizing transparency and creditworthiness by introducing decentralized autonomous organizations to manage decisions such as loan approvals and risk assessments. Since its official launch in November 2020, TrueFi has issued over $1.7 billion in loans to more than 30 borrowers, primarily including fintech companies, credit funds, and cryptocurrency institutions.

Clearpool is a decentralized financial ecosystem that introduces an unsecured lending protocol for qualified institutions. Institutions can raise short-term funds through a single borrower pool, while DeFi lenders can obtain low-risk returns based on market-derived interest rates. As of now, the total loan amount in Clearpool's open lending pool has reached $328 million, with an average yield of 10.24%.

In addition to the native lending protocols of the crypto market, we can also expand new narratives and related products from the perspective of traditional financial markets. Structured deposit products are a common investment tool in traditional financial markets, usually offered by banks or financial institutions. This type of product combines financial instruments such as fixed income and derivatives to provide a certain return while controlling risk to some extent. The "dual currency financial management" in the crypto market is a form of structured deposit.

The two main elements of structured deposits are the underlying reference and the product structure. The underlying reference can be exchange rates, interest rates, indices, ETFs, stocks, funds, commodities, etc. Different product structures are suitable for different market conditions, such as rising, falling, or range-bound fluctuations.

The crypto market typically exhibits high volatility and risk. Structured deposit products may provide mechanisms to hedge against risks, such as derivative contracts. These products can be used to reduce the risk exposure of cryptocurrency institutions during market fluctuations and offer more stable returns. Therefore, with the assistance of RWA, some professional investors or institutions may prefer to choose structured deposits, which are relatively mature products in the traditional financial market.

Overall, the rise in RWA popularity represents a trend of integration between the crypto market and traditional financial markets. This integration not only provides investors with more investment options and a more diversified asset portfolio but also brings higher liquidity and efficiency to the entire market.