The RWA market has enormous potential, and Aptos has emerged as a contender.

Tokenization of physical assets ( RWA ) is an eagerly anticipated track that has yet to fully demonstrate its potential to connect traditional markets worth trillions of assets. Data shows that the total market value of RWA assets in the crypto industry is only $24 billion, and even though it grew by 56% in the first half of this year, it is still far from expectations. This indicates that the development of RWA is just beginning, and as more asset classes are tokenized in the future, RWA is expected to enter a new stage of development.

During this critical period, Aptos is showing strong momentum. In the past 30 days, the total locked value of RWA on the Aptos chain has increased by 56.4%, reaching $538 million, ranking third among public chains. With new DeFi projects coming in, the RWA assets in the Aptos ecosystem are likely to see more investment opportunities, establishing a favorable position for its competition in the next stage.

Private Credit Dominates the Current RWA Market

Private credit accounts for 58% of RWA assets, becoming the most closely watched asset class, followed by U.S. Treasury bonds. Private credit assets primarily exist in on-chain form and typically lack trading liquidity; meanwhile, U.S. Treasury bonds face competitive pressure from yield-bearing stablecoins, which are collateralized by Treasury bonds and offer similar yield characteristics.

Private credit refers to loans provided by non-bank institutions or investors to businesses or individuals in the unlisted market. In traditional finance, private credit has attracted a large number of institutional investors due to its flexibility and high yields. However, it also faces issues such as high costs, low efficiency, and barriers to entry. For example, the auditing process for traditional private credit is cumbersome, transaction costs are high, and small and medium-sized enterprises often struggle to obtain financing due to a lack of credit history.

Cryptographic protocols play an intermediary role by issuing and managing assets on the chain, serving as their core business model. They reduce costs by eliminating multiple layers of intermediaries and increase transparency by providing loan pools and real-time performance of underlying assets.

Private Credit Asset Tokenization Process

( 1. Off-chain Credit Asset Generation

The asset issuer is responsible for generating off-chain credit assets. Private credit institutions, small and medium-sized enterprise financing platforms, or regional credit market operators establish loan agreements, set collateral assets, develop repayment plans and default terms, and review the borrower's financial status. This step ensures that the assets meet traditional financial standards, laying the foundation for subsequent tokenization.

) 2. Build On-Chain Token Structure

Through the RWA protocol, single or multiple loans are mapped to on-chain tokens. The forms of tokens include NFTs, SFTs, or ERC-20 types. The token metadata covers the borrower's anonymous identification, principal amount, interest rate, repayment frequency, maturity date, collateral asset details, and default handling mechanism. Smart contracts support repayment status management, automatic profit distribution, and early redemption or peer-to-peer transfer.

3. Compliance Packaging

The tokenization process must comply with regulatory requirements. Establish special purpose entities or virtual asset service providers as legal custodians, corresponding one-to-one with on-chain tokens. All investors must complete KYC/KYB and AML reviews. Off-chain disclosure documents clearly state that tokens are debt assets, without voting rights or equity attributes.

4. Token Issuance and Financing

Display tokens through the user interface or protocol platform, and accept on-chain investments. Investors must complete KYC verification, use cryptocurrency for investment, receive RWA tokens as proof, and collect repayment principal and interest on schedule.

5. Profit Distribution and Asset Liquidation

Borrowers repay according to the plan, and the funds are collected by the issuer and transferred to a special purpose entity, mapped to the chain through oracles or smart contracts, and distributed to token holders. The smart contract automatically splits the interest based on the holding ratio and automatically returns the principal or arranges asset rollover upon loan maturity.

Aptos's Competitive Advantages in the RWA Track

Technical Advantages

Aptos, as a new generation Layer 1 blockchain, brings unique advantages to the RWA track with its technical architecture:

1. High throughput and low latency: Aptos uses the Block-STM parallel execution engine, with a theoretical throughput of up to 150,000 TPS, and stable production environments ranging from 4,000 to 5,000 TPS. The final confirmation time for transactions is only 650 milliseconds, supporting large-scale loan issuance, real-time repayment distribution, and on-chain auditing.

2. Low transaction costs: Aptos's transaction fees average less than $0.01, which is beneficial for frequent on-chain operations.

3. Modular Architecture and Scalability: Aptos's modular design separates the consensus, execution, and storage layers, allowing each layer to be independently optimized, which is suitable for managing complex RWA asset metadata.

ecological layout

Aptos has significantly enhanced its competitiveness in the RWA track by collaborating with traditional financial giants and expanding its DeFi ecosystem:

1. Institutional Collaboration: Aptos has introduced RWA products from several well-known financial institutions, such as Ondo Finance's USDY and Franklin Templeton's BENJI token.

2. Regulatory Friendliness: Aptos has built-in on-chain identity verification and asset tracking features through collaboration with compliant platforms, meeting regulatory requirements.

3. Emerging Market Positioning: Aptos's RWA strategy focuses on emerging markets, particularly in areas with insufficient financial inclusion, providing diversified financing solutions.

Summary

Aptos's rapid rise in the RWA sector is attributed to its technological advantages and ecological layout. Private credit, as the growth engine of RWA, enables on-chain composability through tokenization, allowing credit tokens to participate in the cycle of loans, leverage strategies, and liquidity pools of DeFi protocols. Aptos's low transaction fees and fast confirmation times support real-time lending and settlement, and future integration with more DeFi protocols may further activate its potential.

As the interest rate spreads in traditional financial markets tighten, institutional investors are turning to on-chain solutions. Aptos fills the financing gap for small and medium-sized enterprises by serving emerging markets. In the future, with the optimization of the regulatory environment and the expansion of the DeFi ecosystem, Aptos is expected to continue attracting RWA assets, demonstrating long-term growth potential in the private credit sector.