The essence of RWA is becoming clearer

Source: Daoshuo Blockchain

At the end of the first two articles, a reader mentioned Ondo, a well-known project in the RWA ecosystem.

This project has been around for a long time, but it has recently attracted a lot of attention, mainly because the project is preparing to launch its own first-layer blockchain, Ondo Chain.

This blockchain is specifically used to carry the RWA business of financial institutions.

The developers of this chain include traditional financial institutions and Internet giants such as BlackRock, Paypal, Franklin Templeton, and Google Cloud.

More importantly, this blockchain is a so-called "hybrid chain":

Its nodes are completely permissioned. In other words, which institutions are qualified to become nodes is entirely determined by this alliance organization. In more familiar terms, it is a consortium chain.

Seeing this, I remembered that about 4 years ago, when I was taking a blockchain course, a classmate raised a question (roughly):

We say that Bitcoin is a blockchain because we can download its wallet at will, accept transfers from anyone to me, and transfer money to any wallet.

If there are no such features, and I am given a network to use, how do I know whether it is a blockchain?

For example, the Taobao we use now, the official insists that it runs on the blockchain, and Taobao points are the tokens on this blockchain. How can I tell the difference?

I remember my answer at the time was probably:

Only those with the characteristics of "decentralization", "no permission required", "anti-censorship", etc., in my opinion, are blockchains, and those without these features are not blockchains, no matter what "chain" others call them.

There is also a simpler way to determine whether it is a blockchain:

One day, the US government believes that the XX system threatens security, and can find the person in charge or organization of the system in the first time, and then call the person in charge or organization to give a lecture. Under the instruction of the person in charge or organization, the system will be completely shut down one month later.

In my opinion, any system with such characteristics is not a blockchain.

Do you still remember the incident when Facebook was about to issue a stable currency but was stopped at the last minute?

By the same token, the US government can also technically control Ondo Chain in the first place.

So using this standard to look at Ondo Chain, I don’t think it’s a blockchain at all. It’s still a traditional centralized distributed system, but this system is composed of several nodes.

In its system, authorized nodes can completely intercept transactions and block addresses. What assets can be traded on it and who can trade what assets will be strictly restricted.

Let’s imagine it more broadly. In this “blockchain” with such strict control and such a strong American background, do funds from certain countries dare to enter this system for trading?

Because even if they can enter the transaction, once the US government requires the blocking of assets of certain countries in this “blockchain” one day, these countries will have no way to deal with it.

Therefore, from the perspective of the liquidity of financial assets alone, such a system still has too many restrictions, which is far less attractive than the boundless and free world I imagined.

Only assets that are decentralized, censorship-resistant, and usable by both good and bad people are common assets for all mankind, and only such platforms are common platforms for all mankind.

Only such assets and platforms can attract the broadest liquidity and gain the broadest consensus.

Bitcoin and Ethereum are the best examples in this regard:

Only the United States intends to use Bitcoin as a national reserve, while on the other hand, our two neighbors to the north and northeast, who are irreconcilable with the United States, also regard Bitcoin as an important financial asset.

Only global builders are playing DeFi on Ethereum, while on the other hand, our neighbor to the northeast is also using DeFi on Ethereum for various financial operations.

If the RWA platform and RWA project are permissionless and censorship-resistant, regardless of whether it can bring great benefits, at least I will be curious about it and have a greater interest in it.

But if a platform like Ondo is the mainstream RWA platform in the future, and if the ecosystem on such a platform is the mainstream RWA ecosystem in the future, then I will not even have much interest in such a platform and such a track. I don’t think such a track and such assets have any special meaning for retail investors.

There is no freedom to participate in projects on such a platform, and I have to worry about the exchange of encrypted assets and legal currency. I might as well go to a financial institution outside the mainland to open an account and buy financial assets directly. Although it is troublesome and not so free, at least there are no legal problems and no need to worry about the exchange of legal currency.

Some people on the Internet think that because of this reason, Ethereum’s track is one less than expected, but I think this kind of "centralized" track is not Ethereum’s track at all, or even the track of the entire encryption ecosystem. It is not difficult for encryption technology on such a track to compete with centralized technology.

The track that encryption technology must compete in must be encryption projects facing the world and all mankind.

I would like to answer another reader’s message:

I still firmly hold Ethereum, and my confidence in it has not changed.