Stablecoin, RWA, and DeFi: The Three Catalysts Driving Ethereum Value Reassessment

Recently, the performance of cryptocurrency stocks has been good, prompting investors to think about several important questions: Where is the market increment after the stablecoin bill is passed? Why can certain tokens surge due to Ethereum hotspots? What is the relationship between RWA opportunities and Ethereum? Why is there optimism for ETH despite short-term price fluctuations? This article will systematically summarize these questions from a fundamental logic and long-term perspective.

The rise of Ethereum is not driven by individual institutions, but rather a collective choice of mainstream institutions as they reshape their strategies; the critical point of trend change is about to arrive.

1. Data Insights

The total market capitalization of stablecoins has reached a historical high of $258.3 billion. The U.S. stablecoin bill is progressing smoothly and is expected to complete legislation before August. The Hong Kong stablecoin regulations will take effect on August 1. The U.S. Treasury Secretary anticipates that if the bill passes, the market capitalization of stablecoins will exceed $2 trillion within a few years.

Asset tokenization ( RWA ) is growing rapidly, increasing from $5.2 billion in 2023 to currently $24.3 billion, a growth of 460%. It is predicted that between 2030 and 2034, 10%-30% of global assets may be tokenized, with a scale of $40-120 trillion, which is more than 1000 times the current amount.

Mainstream institutions are actively laying out RWA business:

• BlackRock BUIDL Fund: Tokenized US Dollar Pegged Fund, AUM $2.86 billion, 95% deployed on Ethereum.

• Securitize: Collaborating with multiple institutions to issue tokenized products, with a total market value of $3.7 billion, 80% deployed on Ethereum.

• Franklin Templeton BENJI Fund: tokenized fund, AUM $743 million, 10% deployed on Ethereum.

More and more traditional financial institutions are promoting asset on-chain and tokenization services.

2. Re-examine RWA

RWA(Real-World Assets) refers to the digitization of real-world assets and mapping them as tokens or assets on the blockchain. Broadly includes the process of on-chain and tokenization of any non-blockchain native assets.

Tokenization's structural advantages:

1. Programmability: Achieving asset management automation through smart contracts.

2. Settlement Revolution: Achieve instant settlement and reduce counterparty risk.

3. Liquidity Revolution: Improving the liquidity of low liquidity assets.

4. Global Accessibility: Breaking down geographical barriers and expanding the investor base.

Main tokenized targets:

1. Private Credit: The largest RWA sector, with a scale of $14.3 billion.

2. Government Bonds: Traditional institutional entry point, with a scale of 7.4 billion USD.

3. Stocks: Accelerating realization, Kraken, Bybit and others have launched tokenized stocks.

4. Product: Primarily based on gold.

5. Private Equity: Actively exploring.

3. Stablecoin-RWA-DeFi Ecosystem

Stablecoins are the foundation of traditional finance integrated on the blockchain, making currency programmable and decentralized.

The rapid development of RWA is attributed to institutions exploring new integration methods. After the bill is passed, a large number of assets will be quickly brought on-chain.

Decentralized Finance will play a role in realizing the integration of new on-chain assets with mature protocols, promoting derivatives innovation and high liquidity yield distribution.

RWA and DeFi integration case:

1. Securitize connects DeFi through sTokens: BUIDL with the Euler protocol, ACRED with the Morpho protocol, etc.

2. Ethena's USDtb integrates BUIDL to achieve a stable minimum return.

4. ETH is the mainstream choice for institutions

Currently, ETH is the main public chain for institutional asset tokenization, accounting for 58.41%. The reasons institutions choose ETH:

1. Maximum security and stability.

2. Mature Decentralized Finance ecosystem and liquidity.

3. Decentralized and global business reach capability.

Etherealize believes that ETH is digital oil, providing power, collateral, and reserves for the new financial system. ETH is a multifunctional asset, including computational fuel, value storage, settlement collateral, and more.

The reason ETH lags behind BTC: the narrative has not yet been fully accepted by institutions. But the repricing process is underway:

1. Institutional demand has surged.

2. The demand for native crypto yields is accelerating.

3. Strategic accumulation of Ether.

4. ETH becomes a reserve asset for institutional funds.

In summary, ETH is the optimal solution for large-scale asset on-chain, and the trend of being revalued has already emerged.