The problems on the chain are relatively mature and are not the subject of this article.
Is the off-chain credit sufficient?
Tether’s USDT stablecoin is the largest RWA project. The Italian audit company BDO has constantly audited Tether. BDO issued the audit report of Tether in 2024 on January 25, 2025. Tether’s most significant asset is US Treasury bonds, which are 94 billion. $7 billion in Bitcoin accounts for 5% of total assets. There are also $7 billion in current reserves, about 5%.
Tether’s risks
About 130 billion in short-term financial operations, of which mortgage loans have grown to $8 billion, and other investments have $4 billion. It accounts for 8.3% of total assets. The part that cannot be covered is only 5 billion, less than 3.5%.
2. Moving the headquarters to El Salvador is in progress. However, the country is not yet a mainstream European and American country.
3. The deposit bank is not disclosed, and the deposits are not transparent. Since the majority of US debt is US Treasury bonds, it can be retrieved even if the bank fails.
4. Whether the USDT account book is correct depends on the credit of the audit company, which has unlimited guarantee liability. However, for such a huge asset, the audit company’s credit is not enough. From the perspective of asset quality, USDT should have more than 70% of the credit of the Federal Reserve. Due to the insufficient credit of the audit company, USDT’s credit is lowered.
Tether is not a mortgage guarantee model but a credit model.
Its credit is generated by:
1. No accidents for a long time,
2. Strong assets,
3. The status of the boss,
4. Convenience of transactions.
If the credit is not enough, other models are needed.
Off-chain mortgage and guarantee model
A project now writes how it will be after being put on the chain when issued. The technology of the chain is mature. Who provides the key credit that is not on the chain? This must be carefully looked at. For example, if it is a company project, the company must have clear guarantees, and asset guarantees are the best. The value of the collateral must exceed the value of the subject matter. The multiple of the guarantee is determined according to the difficulty of handling the collateral. As a blue chip stock, the guarantee capacity is 50% to 70%, and second-tier stocks are 20% to 30%. The collateral multiples for collateral with poor liquidity should be increased. Liquid assets are required to be pledged.
If this model is not the case, you can only rely on your luck.
How much profit is reasonable
The RWA project is not an air coin and cannot make huge profits. Under the condition that the off-chain mechanism is complete, it is equivalent to the financing project in the current capital market, from a few percent of bond issuance to doubling the annual income of quantitative trading. This is the correct psychological expectation for the RWA project.
There is an opportunity to find value
The concept of RWA has been discussed for a long time, but no decent large projects and tracks have appeared except stablecoins. In other words, many RWA projects may be in a stage of mispricing. Helping the project’s value discovery is an opportunity to obtain high returns. Generally speaking, new things have opportunities, especially when they are small.
On-chain transparency is an advantage
After RWA is on the chain, the data will be transparent, and its volatility will be relatively large. Judging the long-term benefits of the project is very important.
