The storm is coming, and the collective effort of the market will drive ETH to realize value discovery.

Recently, with the good performance of cryptocurrencies like CRCL and HOOD, many investment friends have raised several valuable questions: "If the stablecoin bill really passes, where will the market's incremental growth appear?" "Why do coins like SBET and BMNR experience a big pump just by riding the wave of Ethereum?" "Is there a connection between RWA opportunities and Ethereum?" "Why do you firmly believe in ETH regardless of short-term price fluctuations?" For different questions, we have provided fragmented answers. This article will systematically organize these answers, providing a summary from a foundational logic and a longer-term perspective, while also serving as a supplement to previous reports.

"The rise of ETH is not driven by the buying or promotion of one or two institutions; it is a collective choice of mainstream institutions during the transformation layout, and the critical point of trend change is about to arrive."

1. Starting from Data

Stablecoins have achieved a development speed that exceeds market expectations, with a total market value reaching a historic high of $258.3 billion. The U.S. "Genius" bill has passed the Senate vote and is now in the Republican-led House stage, with Trump calling for the U.S. stablecoin legislation to be completed before the August congressional recess. Hong Kong's "Stablecoin Regulation" has been passed and will take effect on August 1. U.S. Treasury Secretary Becerra predicts that if the U.S. stablecoin bill passes, the market value of stablecoins will rapidly grow to over $2 trillion in the coming years (more than 10 times the current value). Meanwhile, asset tokenization is one of the fastest-growing markets aside from stablecoins, with RWA growing from $5.2 billion in 2023 to the current $24.3 billion, an increase of 460%.

Currently, the total market value of traditional finance exceeds 400 trillion, the total market value of the crypto market is 3.3 trillion, the total market value of stablecoins is 0.25 trillion, and the total market value of RWA is 0.024 trillion. According to industry forecasts from Standard Chartered Bank, Redstone, RWA.xyz, etc., by 2030-2034, 10%-30% of global assets may be tokenized, which amounts to a scale of 40-120 trillion, and the total market value of RWA is expected to expand to more than 1000 times its current value.

What other businesses are the most proactive "BlackRocks" in promoting stablecoins and cryptocurrency ETFs laying out?

(1) BlackRock BUIDL Fund: BUIDL (BlackRock USD Institutional Digital Liquidity Fund) is a blockchain-based tokenized dollar-pegged fund launched by BlackRock, using a tokenized form to represent the underlying assets (mainly U.S. Treasury bonds). Currently, the AUM has reached $2.86 billion (11.7% of the RWA market), with 95% of the funds deployed on Ethereum.

(2) Securitize: An asset tokenization company led by BlackRock and Jump, with participation from institutions like Coinbase. In addition to issuing BUIDL with BlackRock, it has collaborated with several traditional financial institutions to issue various tokenized products: partnering with Hamilton Lane to tokenize its private equity fund; collaborating with VanEck to explore the issuance of tokenized investment products; working with Apollo to tokenize some of its private credit and alternative investment products; assisting KKR in fund tokenization. The market value of the tokenized products issued through Securitize reaches $3.7 billion (15% of the RWA market), with 80% deployed on Ethereum.

(3) Franklin Templeton BENJI Fund: BENJI (BENJI Tokenized Fund) is a tokenized fund launched by Franklin that transforms traditional assets (money market funds or bonds) into digital tokens, achieving the digitization and fragmentation of assets, allowing small investors to participate while supporting smart contract functions for profit distribution or reinvestment. Currently, AUM is $743 million (3% of the RWA market), with 59% of funds deployed on Stellar and 10% deployed on Ethereum.

There is more traditional finance advancing asset on-chain and asset tokenization businesses. The current wave of institutional adoption represents the culmination of years of infrastructure development finally leading to production-scale deployment.

II. Re-examining RWA

RWA (Real-World Assets) refers to the digitization and mapping of tangible or intangible assets from the real world (such as real estate, artworks, bonds, stocks, commodities, etc.) into digital tokens or assets on the blockchain through blockchain technology or tokenization methods. Broadly speaking, I believe that in the industry, RWA mainly corresponds to the on-chain and tokenization of any assets outside of blockchain-native assets, allowing the rights ownership, circulation, and settlement of the underlying assets to be completed entirely through the blockchain.

Tokenization has the following structural advantages:

1. Programmability - Innovation in Asset Management Driven by Smart Contracts: Programmability refers to encoding the rules, conditions, and execution logic of assets into automated, verifiable code through smart contracts on the blockchain. Tokenized assets can embed functions such as dividends, redemptions, and staking, eliminating manual intervention. This shifts asset management from static holding to dynamic management, evolving from manual data transfer to on-chain automated updates.

2. Settlement Revolution - Efficiency Enhancement and Risk Control: Tokenization enables peer-to-peer instant settlement through blockchain, replacing the lengthy T+2 clearing cycle that has plagued traditional financial systems for years. Both parties in a transaction can directly transfer ownership through tokens, eliminating the need for centralized intermediaries, thereby reducing counterparty risk and capital requirements.

3. Liquidity Revolution - The Core of Traditional Finance Embracing Encryption: Tokenization significantly enhances asset liquidity by dividing traditionally low-liquidity assets (such as real estate, private equity, etc.) into standardized small tokens for trading in the secondary market, combined with the gradually maturing DeFi system. The unique 7*24 trading environment of blockchain further amplifies this effect.

Every time an asset is on-chain, settlement efficiency improves, and idle assets are utilized by DeFi. "The faster the speed of value settlement, the higher the frequency of capital reinvestment, thus further expanding the overall economic scale. Business models will no longer rely on charging for the [liquidity] process, but instead create new sources of revenue through the [momentum] effect" (-Sumanth Neppalli). This is the core of the integration of traditional finance and encryption.

4. Global Accessibility - Breaking Down Geographical Barriers of Capital Fragmentation: Tokenization relies on the distributed characteristics of blockchain, allowing global investors to access tokenized assets via the internet without the need for complex cross-border intermediaries or local accounts. This significantly expands the investor base while reducing distribution costs. The global application of stablecoins is the best testimony to this, and this trend is deriving in more markets such as the stock market.

Which assets are being tokenized?

1. Private Credit - The Largest RWA Tokenization Sector: Contrary to popular belief, private credit is currently the largest market for asset tokenization, with a total scale of $14.3 billion, accounting for 58.8% of the total RWA scale. Figure, Tradable, and Maple are respectively providing $10.6 billion, $2 billion, and $800 million in active loans.

2. Government Bonds - The Tokenization Starting Point for Traditional Institutions: The market size of tokenized government bonds reaches $7.4 billion, accounting for 30% of the total RWA size, with notable examples being BlackRock's BUIDL; Franklin Templeton's BENJI; Superstate's USTB; and Ondo Finance's USDY. Traditional financial institutions are beginning to explore the development of on-chain derivative financial products and the integration with DeFi based on tokenized government bond products.

3. The tokenized stock market is accelerating: On June 30, cryptocurrency exchanges Kraken and Bybit announced the launch of tokenized US stocks and ETFs through xStocks, enabling 5*24-hour trading. Although these are not stocks native to the blockchain, participants can engage in arbitrage trading through stock tokenization, breaking the geographic boundaries of the US stock market. Meanwhile, Robinhood announced it is building the "Robinhood Chain" on the Arbitrum blockchain, aimed at supporting decentralized management of future asset ownership. This marks its transformation from a traditional brokerage to a blockchain-native platform, segmenting stock tokenization into three phases to integrate blockchain for composability advantages. At the same time, Coinbase positions tokenized stocks as a "top priority," with its Chief Legal Officer Paul Grewal actively seeking approval from the US Securities and Exchange Commission (SEC) to offer blockchain-based stock trading services, utilizing its Base Layer 2 network as a potential infrastructure for future tokenized stock settlements. This year, we may witness these leaders launching popular stocks native to the blockchain.

4. Commodity tokenization is primarily based on gold: Gold accounts for nearly 100% of tokenized commodities. Paxos Gold (PAXG) leads with a market capitalization of approximately $850 million.

5. Active exploration of private equity tokenization: Private equity is the ultimate goal of tokenization, and this technology can solve structural problems that have persisted for decades, transforming the extremely poor liquidity of traditional private equity.

3. Stablecoin-RWA-DeFi

Stablecoins are the most important underlying foundation of traditional finance integrated into the blockchain; they enable currency to become programmable and decentralized, serving as the basis for the circulation and settlement of all on-chain financial assets. Dr. Xiao Feng, chairman of Hashkey Group, shared in an interview with Teacher Meng Yan that "the U.S. presidential team and Congress are quite frank and transparent regarding the motivations behind stablecoin legislation. The first is to modernize the U.S. payment and financial system, and the second is to consolidate and enhance the position of the U.S. dollar, creating trillions of dollars in demand for U.S. Treasury bonds over the next few years." "Bitcoin as a national reserve is second to the U.S.; USD stablecoins are the first and are core interests of the U.S."

The rapid development of RWA in this round benefits from institutions continually exploring new integration methods and promoting legislation on digital asset market structure. Once the stablecoin and market structure legislation is completed, a large number of assets will be quickly pushed onto the chain, with transactions, revenues, and settlements operating on the native blockchain, using stablecoins as the basic currency unit and value carrier.

Once a large amount of assets are on-chain, DeFi will begin to take effect, integrating newly on-chain assets with increasingly mature DeFi protocols to achieve efficiency, automation, and compliance. This will drive the creation of derivative products and generate and distribute high liquidity yields. This cycle may be a new wave of vigorous development opportunities for the entire DeFi ecosystem since the DeFi Summer.

Case of RWA and DeFi Integration

1. Securitize connects DeFi systems through sTokens:

The world's largest tokenized asset issuer, Securitize, does not support the direct use of its native tokenized securities in DeFi protocols due to compliance considerations. The tokens must first be deposited into sVault to mint a version compatible with DeFi, called sTokens, which can then be integrated into the existing DeFi ecosystem.

BlackRock BUIDL and Euler Protocol: The sBUIDL (derivative token of BUIDL) of Securitize has been integrated into the Euler lending protocol on Avalanche. Holders can deposit sBUIDL into the sToken Vault to borrow other assets while still earning daily yields from BUIDL.

Apollo ACRED and Morpho Protocol: The sToken version of ACRED (sACRED) operates on Polygon PoS through Morpho, allowing holders to use sACRED as collateral to borrow USDC, which is automatically reinvested to amplify returns.

2. Ethena's USDtb fusion BUIDL provides a stable minimum yield.

The Ethena Risk Committee approved the use of USDtb as the primary supporting asset when the Delta neutral financing strategy reaches a local minimum. 90% of the USDtb reserves are held in BlackRock's BUIDL fund, serving a dual purpose: providing low-risk collateral for margin trading on centralized exchanges and offering compliant treasury exposure in unfavorable financing environments.

"The addition of USDtb support for USDe has indirectly catalyzed the explosive growth of complex DeFi yield strategies, particularly facilitating the robust money market for Pendle's split principal (PT) and yield token (YT) — traditional finance views these tools as interest rate markets. During periods when crypto derivatives financing rates become negative or significantly compressed, the support from USDtb provides crucial yield floor stability (typically a 4–5% annual interest rate). This predictable minimum yield base is essential for PT token valuation and AAVE's oracle system, enabling it to provide more accurate pricing models and safer liquidation mechanisms for zero-coupon bond mechanisms."

Currently, traditional financial institutions are starting to explore the development of on-chain derivative financial products and the compliance integration of DeFi based on tokenized national debt products from stablecoins.

4. ETH is currently the mainstream choice for institutions.

Currently, based on the data, ETH remains the main public chain for institutions to tokenize assets, with a tokenized market value of 7.5 billion USD, accounting for 58.41% of the total scale. The tokenized market value on ETH's L2 ZKsync Era is 2.245 billion USD, accounting for 17.47%. Among other public chains, Aptos ranks first with a tokenized market value of 540 million USD, accounting for approximately 4.23%.

Thinking from the underlying logic, there are three main reasons why institutions prefer ETH as the primary battlefield for asset on-chainization:

1. Ethereum has the highest level of security among current public chains. With a decade of accumulated security records, there have been no serious issues such as downtime. When Ethereum upgraded from PoW to PoS, its ability to complete core architecture upgrades without downtime was described as "changing engines while the plane is in flight." The stability demonstrated by its excellent technical foundation and organizational integration capabilities aligns with the prudent principles for institutions to lay out new business plans.

2. Own the most mature DeFi ecosystem and the best liquidity, with the most mature DeFi protocols. The most innovative product mechanisms mostly exist on Ethereum, and institutions can quickly access mature DeFi systems after putting ETH on-chain, enjoying the best liquidity.

3. The extremely high level of decentralization and global business reach also serves as a balance center for the interests of large institutions and global investments. One reason why stablecoins hold such strategic importance for the United States is that they achieve decentralized global reach through on-chain mechanisms, breaking down the historical barriers of national currencies divided by politics, and pushing dollar equivalents globally via the network. Asset tokenization is similar; for example, the recent tokenization of U.S. stocks allows individuals who previously could not invest or trade in U.S. stocks to bypass national entry barriers and participate in the U.S. stock market on-chain. ETH, benefiting from the best liquidity and influence, is the preferred public chain for global business reach, while its decentralized nature also makes it the balance center for the interests of large institutions and global investors. Large institutions in sovereign nations would be reluctant to choose a public chain that is completely dominated and controlled by another country to issue products and participate in large financial activities.

See how Etherealize says

EF has experienced significant functional differentiation and specialization, reorganizing internally into three major business groups while separating specific functions to external organizations, leading to the birth of Etherealize. It is positioned as the "institutional marketing and product pillar" of the Ethereum ecosystem, focusing on facilitating connections with traditional finance and Wall Street to accelerate the adoption of Ethereum among institutions.

Etherealize believes that ETH should not be evaluated as a tech stock, but as a completely new category of asset: ETH is digital oil — an asset that powers, guarantees, and reserves the new financial system for the internet.

"The traditional financial system is at the beginning of a structural transformation from analog infrastructure to digital-native architecture. Ethereum is expected to become the foundational software layer — similar to an operating system, like Microsoft Windows — upon which the new global financial system will be built."

When all of this is realized, ETH will become the underlying asset of a comprehensive global platform that will encompass the future of finance, tokenization, identity, computing, artificial intelligence, and more. This inherent complexity makes it harder to define ETH, especially in comparison to simpler value storage assets like Bitcoin — — but it also makes ETH strategically more valuable and indicates that ETH has greater long-term potential.

At the same time, ETH is not just a cryptocurrency, it is a multifunctional asset with roles including: computational fuel; a value storage asset with yield; original settlement collateral; a deflationary asset; a representation of tokenized economic growth; reserve trading pairs; strategic reserve asset.

Therefore, ETH cannot be accurately valued using the discounted cash flow method. Instead, ETH must be viewed from the perspective of strategic value storage and utility-driven scarcity. ETH powers the digital economy, secures the digital economy, derives value from the growth of the digital economy, and possesses intrinsic scarcity due to its supply dynamics and issuance cap. As the global economy shifts towards tokenized infrastructure, ETH will become indispensable, not only as fuel but also as the native asset of the future financial system's currency and settlement layer.

Why is ETH lagging behind BTC?

The answer is simple: the narrative of Bitcoin has been accepted by institutions, while the narrative of Ether has not. In contrast, the value proposition of Ether is harder to define — not because it is weaker, but because it is broader. Bitcoin is a single-use store of value asset, while Ether is a programmable foundation that supports the entire tokenized economy.

The process of accelerating ETH repricing is underway:

1. Surge in demand: Institutions have begun to rapidly adopt and deploy tokenized assets and financial infrastructure on Ethereum on a large scale, as evidenced by the data in this article.

2. The demand for native encryption yields is accelerating: As institutions increasingly build on the basis of ETH, the ETF staking of Ethereum is merely a matter of time. The emergence of the physical subscription/redemption model for institutions will also significantly enhance their interest in ETH staking yields.

3. Strategic Hoarding of ETH: A competition is brewing within the Ethereum ecosystem to hoard ETH as a premium value storage asset. Recently, the US-listed company Bitmine Immersion Technologies raised $250 million to launch its ETH financial strategy, driving its stock price from $4 to a peak of $74 in just two days, a rise of over 180%.

4. ETH as an Institutional Asset: The unique characteristics of ETH — original collateral, neutrality, yield, and global utility — make it the preferred reserve asset for institutions and on a global scale.

In summary, ETH is not the only long-term choice for institutions to enter the blockchain, but it is currently the optimal solution for large-scale asset tokenization. Considering the data, examples, underlying logic, and recent Big News, there is a trend of renewed emphasis on ETH.