The sustainable returns of RWA assets are crucial to market development

Market Challenges and Unsustainable Practices:

The cryptocurrency market grapples with systemic issues that undermine its long-term viability:

Unsustainable High APYs: Many projects advertise elevated Annual Percentage Yields (APYs) driven by subsidies, Ponzi-like structures, or short-term capital maneuvers, rather than genuine, value-backed returns.

Prevailing Models

• "Void Pledge": Returns are generated from subsequent investors’ funds, lacking the support of underlying assets, creating an unstable financial foundation.

• "Subsidized APY": Projects rely on finite financing or ecosystem funds to inflate short-term returns, a practice that is inherently unsustainable.

• "One-Wave Flow" Strategy: In bull markets, projects attract capital with high returns, but in bear markets, they collapse, resulting in significant losses to users’ principal.

Comparison with Traditional Finance:

Elite Wall Street funds achieve annualized returns exceeding 20% with Sharpe ratios above 3.5, representing top-tier performance. In contrast, many crypto projects tout APYs far beyond these benchmarks, signaling clear unsustainability.

Industry Turning Point:

The crypto industry’s growth curve, driven by dissemination and consensus, is approaching or has reached a critical inflection point. Without sustainable returns anchored in Real-World Assets (RWAs), the sector risks becoming an unstable, rootless entity, detached from enduring value.

Addressing these challenges requires a shift toward transparent, asset-backed models to ensure the industry’s long-term stability and credibility.