Using islands and international waters as metaphors is a bit cliché, but upon reflection, it’s quite illustrative. Traditional finance is like a heavily guarded island, with restricted capital flows; the crypto world is an open sea of opportunities and volatility. Recent observations have led me to think that some innovative projects in the RWA (Real-World Asset) track are building something akin to a canal connecting these two worlds — not only enabling capital to flow but also balancing compliance, liquidity, and risk premiums, which are like "water level differences."

By the end of 2025, RWA will no longer be just about simple on-chain representations of U.S. Treasuries. When you open the interface of some mainstream RWA protocols, what you see is no longer cold token addresses but truly programmable, liquid credit assets. The technological logic behind this transformation is worth pondering.

The key lies in the design concept of the "asset abstraction layer." Early RWA protocols essentially replicated offline assets on-chain—creating shadow assets as a simple mapping. But now, the approach is more like an "all-in-one translator." Through modular Zero-Knowledge (ZK) verification technology, it can protect user privacy while proving on-chain that you have the compliant qualifications to hold real assets. The brilliance of this approach is that it solves a long-standing paradox in the RWA field — how to maintain decentralization and user privacy while satisfying regulatory transparency requirements.

From a market positioning perspective, some RWA projects are cleverly positioning themselves at critical nodes of liquidity distribution. They are not just issuers of assets or simple trading platforms but act as "intermediary translators" between two ecosystems — engaging with the stability and compliance frameworks of traditional finance on one side, and connecting with the efficiency and openness of the crypto market on the other. Such positioning, in 2025, hits exactly where the market most needs it.