Unlike crypto collaterals, RWAs carry significant credit and counterparty risks. The development of RWA DeFi has been hampered by issues such as bad debts and non-performing counterparties. Currently, there are no oracle solutions for illiquid RWAs. Even liquid collaterals, such as tokenized treasuries, are plagued by counterparty risk, leading to differences in returns for tokenized products based on the same underlying collaterals. Without a robust system for risk pricing and monitoring of tokenized RWAs, large-scale institutional participation remains challenging.
