NFT ecosystem: RWA plug and play infrastructure and financial channels

In July, the NFT market experienced its most significant rebound since 2025. According to the latest data released by DappRadar, the total market value of NFTs has surged by 94% month on month, approaching $7 billion, successfully hitting a new high for the year. The weekly transaction volume increased by 51% to $136 million, and the average selling price also increased by 40% to $146.

Once regarded as a symbol of the crypto bubble, NFTs are now gradually becoming an integral part of the digital economy. The global valuation of related industries has surpassed $34.1 billion, maintaining a compound annual growth rate of 18.5% since 2020. This wave of growth is not driven by speculation but rather by the large-scale adoption by institutions, continuous technological iterations, and the expanding range of application scenarios.

Market Structure: RWA NFTs Shine

In terms of market structure, real-world asset (RWA) NFTs accounted for 11% of the market, emerging as a mature and stable revenue-generating sector. This stands in stark contrast to the sluggish performance of traditional NFT fields such as sports, music, fashion, and gaming. In the first half of the year, over 180 NFT startups completed seed or Series A funding rounds, raising a cumulative total of $4.2 billion.

The investor lineup is impressive, featuring crypto industry giants like Animoca Brands as well as well-known venture capital firms such as Andreessen Horowitz (a16z). Even Wall Street financial institutions have jumped on the bandwagon. Giants like Goldman Sachs are actively exploring the application of NFTs in collateralized financing, and NFT index funds and ETFs have even emerged in the US market.

In institutional trading, the application of partial ownership splitting and embedded revenue mechanisms accounted for 30% of the total. This indicates that NFTs are transforming from mere collectibles into assets with practical utility and revenue-generating attributes.

Meanwhile, the NFT ecosystem is serving as a solid foundation for the implementation of RWAs. Infrastructure such as OpenSea’s secondary market, Gem’s bulk trading tools, and Chainlink’s price oracles, originally designed for digital artworks, can be easily adapted to serve tokenized real estate and other RWAs with minor adjustments.

Potential of Real-World Asset Tokenization and NFT Integration

Real-world asset tokenization is not a new concept. USDT, as a chain-based representation of the US dollar, is a prime example, and gold tokenization protocols like Pax Gold have long existed. These assets are typically represented using standard ERC-20 tokens. However, certain asset types are better suited for representation in the form of NFTs, such as real estate, diamonds, luxury watches, wines, and yachts.

The real estate sector is particularly noteworthy. Selling an entire house in the form of an NFT is relatively rare. This model usually requires the buyer to set up a dedicated company to hold the property and the token, making the buyer the owner of the company and responsible for related taxes and legal obligations. For most users, simply purchasing an NFT representing a property is overly complex, limiting its large-scale application.

A more convenient approach is to split the property into semi-fungible tokens (SFTs) to achieve revenue tokenization. This model targets users who invest in real estate to earn rental income. Investors can spend a few hundred dollars to purchase NFTs representing partial shares of the asset and automatically receive revenue distributions on the blockchain.

In addition, unique assets such as rare wines, jewelry, luxury watches, artworks, and even limited-edition designer handbags can also have their ownership registered and transferred on the blockchain through NFTs. However, binding NFTs firmly to physical assets still poses challenges, as there are currently no mandatory regulations to ensure the simultaneous transfer of physical assets when NFTs are sold.

Take Tangible as an example. The platform has launched real estate-backed stablecoin USDR and various tangible NFTs (TNFTs), covering real estate, gold bars, fine wines, and luxury watches. Users can purchase entire property NFTs and share rental income. When buying gold bar NFTs, the serial number is displayed simultaneously, but an annual storage fee of 1% is required. Wine and watch NFTs also come with storage fees, with the latter’s handling fee exceeding $200.

As one of the largest RWA projects, Centrifuge adopts an NFT model that differs from traditional perceptions. Its clients are mainly enterprises in need of loans and willing to use real-world assets (such as accounts receivable and invoices) as collateral. Borrowers mint RWAs into NFTs and deposit them into liquidity pools. The NFTs contain asset valuation and pricing information, and some sensitive data can be privatized for access by specific users only.

Lenders do not directly purchase NFTs but provide funds to borrowers in exchange for higher interest income compared to traditional DeFi lending protocols.

Efficiency Revolution and Liquidity Breakthrough

A calculation by a Singapore sovereign fund has validated the value of RWA-NFTs: By tokenizing Southeast Asian commercial paper through Centrifuge, the settlement cycle was shortened from the traditional T+3 to just 2 hours, and audit costs were reduced by 40%. This reveals the core advantage of RWA-NFT integration – eliminating the “dark matter” in the financial sector. In traditional securitization, intermediaries such as custodian banks, clearing houses, and registration agencies consume about 150 basis points of returns. Smart contracts can automatically execute interest distributions and property rights registrations, making financial markets more transparent and efficient.

The liquidity crunch is gradually being resolved. A New York hedge fund manager discovered that US Treasury NFTs could be instantly converted into DAI at 3 a.m. to pay margins on the Singapore Exchange. This round-the-clock cross-border liquidity is of great significance, especially for emerging market investors. For example, a Nigerian medical equipment importer used a RealT property NFT as collateral to borrow USDC on Aave to pay a German supplier, a process that was three weeks faster than traditional cross-border collateralized loans.

More profound changes are taking place on the balance sheet. MakerDAO has incorporated $3.25 billion worth of RWAs into its reserves, allowing DAI holders to enjoy real-world returns. This “DeFi-TradFi fusion engine” is reshaping protocol economics: When Uniswap’s treasury starts allocating tokenized government bonds, governance tokens acquire the characteristics of income-generating assets for the first time. Just as 19th-century railway bonds gave birth to the modern financial market, the integration of RWAs and NFTs is building a new value internet.

The Catalytic Role of NFT Infrastructure

CryptoPunks holders on Ethereum may not realize that the NFT ecosystem they have cultivated is serving as a solid foundation for the implementation of RWAs. Infrastructure such as OpenSea’s secondary market, Gem’s bulk trading tools, and Chainlink’s price oracles, originally built for digital artworks, can be easily adapted to serve tokenized real estate and other RWAs with minor modifications.

When Propy completed its first on-chain property transaction, the payment channel used was the MetaMask plugin, which is commonly used in the NFT market. The compliance mechanism also borrowed from SuperRare’s artist certification system.

More crucially, user habits are migrating. A watch collector in Geneva purchased a Patek Philippe NFT through Tangible, and the trading interface was no different from his previous transactions in buying and selling Bored Apes. This “cognitive consistency” significantly reduces the learning cost for users. Data shows that the proportion of users who have participated in NFT auctions and then turned to RWA investments is seven times that of traditional investors.

The reuse of infrastructure has led to remarkable efficiency improvements. Roofstock Onchain’s latest property NFT transaction only charged a 3% commission, far lower than the traditional 6% intermediary fee. The secret lies in its direct access to the Kettle NFT liquidity pool, eliminating the need to build a dedicated trading platform. Just as Amazon Web Services frees entrepreneurs from the burden of building their own data centers, a mature NFT technology stack provides RWAs with a plug-and-play financial channel.