The more research I do on the RWA narrative and its tokens, the more disappointed I become. I thought that, like the AI narrative, the RWA narrative would become bullish over time and that tokens related to it would outperform in the upcoming bull cycle. However, I was wrong. The RWA sector is primarily driven by U.S. Treasury bills, with very little investment in real estate and the majority focused on stablecoins. Thus, when the FED begins to cut rates, this sector will face a significant setback, as TBILLs won't offer the same interest as before.

The five notable projects within the RWA narrative are ONDO, Centrifuge, Parcl, Open Eden, Taucan, and Jiritsu. None of these have managed to gain traction yet, and they likely won't unless they introduce new and better products when the FED cuts rates.

There’s been a big push to bring real estate into the RWA space, but real estate is an extremely regulated market, and you can't just move it onto the blockchain freely. There are strict government guidelines that must be followed, as well as new regulations that frequently arise, requiring constant updates. As a result, the majority of RWA projects are centralized. If they are centralized, why bring them onto the blockchain at all?

Another problem is that RWAs are heavily dependent on ORACLEs. Let's say your RWA project is named CFG, and you work with the real estate sector. Big apartments and buildings can be bought and sold via the CFG protocol. Your project becomes a hit, finds a solid market, and people begin investing heavily. Gradually, your project’s total TVL (Total Value Locked) reaches 20 billion. However, your project is dependent on an Oracle called DIA, which updates the prices of real estate properties daily.

Now, suppose DIA’s market cap is only 100 million. A billionaire buys up $100 million worth of DIA tokens and gains control over it, or worse, someone hacks DIA's price feed. Since your CFG project depends on DIA’s price feed, the hacker manipulates the price of a property, listing a Bahamian bungalow for just $2, and then buys it through the CFG protocol. What would you do? You would obviously call foul play and refuse to continue. This kind of scenario is a significant risk within the RWA sector, and decentralization isn’t truly possible at this time.

#RWA! #USRateCutExpected #RWAcoinList