Author: Nancy, LianGuaiNews
Sun Yuchen, the founder of TRON and a member of the Huobi Global Advisory Committee, has always been able to accurately identify the hotspots in the blockchain industry after more than ten years in the industry. From last year’s decentralized stablecoin USDD to this year’s RWA track product stUSDT, Sun Yuchen will not miss any industry trend.
Recently, Sun Yuchen brought the latest thoughts on the industry at WebX, the largest Web3 summit in Asia, where Japanese Prime Minister Fumio Kishida participated. In addition to disclosing various ecological development data such as TRON’s user base, trading volume, and TRC20-USDT issuance, he emphasized RWA as the focus of this conference. He specifically emphasized that stablecoins and RWA are important areas of Web3, connecting virtual space and the real world, and helping to achieve more efficient cross-border remittances and greater personal asset freedom.
The first RWA product in the TRON ecosystem, stUSDT, was launched in early July and has garnered over 400 million USDT in total staking within less than a month of its launch. Why is the latest supported stUSDT by Sun Yuchen able to attract so much attention?
When Japan’s Web3 Ambition Meets RWA
Japan has undoubtedly always been at the forefront of the cryptocurrency world. As the first country in Asia to legislatively recognize Bitcoin as a means of payment, Japan’s cryptocurrency industry has flourished under a strict and clear regulatory framework and a favorable market culture. Currently, the Japanese government has elevated Web3 to a national strategy and has launched a set of measures, including the consecutive release of the “NFT White Paper,” the “Proposal for Opening Web3 Stablecoins in Japanese Society,” and the Stablecoin Act’s “Financial Settlement Act Amendment,” as well as the establishment of a Web3 minister and special zone. It is evident that Japan has ambitious plans for Web3.
At the WebX conference, Japanese Prime Minister Fumio Kishida emphasized the importance of Web3 in a video speech. He stated that Web3 is part of a new form of capitalism and has the potential to change the traditional framework of the internet, triggering social transformation. The government is working hard to improve the environment for promoting Web3. He strongly hopes that major Japanese companies can announce a large-scale project to create a valuable economic zone in the metaverse space to the world at this conference and that the Web3 industry can regain attention and vitality and give birth to various new projects.
However, Japanese traders are relatively conservative and cautious, especially when it comes to new types of assets. They are more inclined to invest in low-risk assets such as government bonds. At the same time, due to the risks in the cryptocurrency field, the Japanese government also adopts a cautious regulatory attitude towards the cryptocurrency industry.
As a value investment narrative in the compliance context, RWA may become one of the best environments for its development in Japan. In fact, with the arrival of the crypto bear market, the on-chain yield has been consistently low, failing to meet the profit needs of most crypto investors. Moreover, the tightening regulatory policies of various countries have posed great uncontrollable risks to crypto assets, reducing their attractiveness. In contrast, the yield of US Treasury bonds has gradually increased after multiple interest rate hikes, and even the yield performance is generally better than most DeFi products, with lower risk compared to other financial assets.
For risk balance and increased profitability, on one hand, many crypto projects have started buying US Treasury bonds or increasing their proportion in asset reserves; on the other hand, more and more traditional institutions have begun to expand in the RWA market, such as China Bank issuing the first tokenized security on Ethereum, and the Hong Kong government selling the first batch of tokenized green bonds, which has allowed many crypto projects to see the development potential of RWA and launch related national bond tokenization projects. In addition to established projects like Maker DAO, Aave, and Maple Finance, emerging projects like Superstate founded by Compound’s founder and stUSDT of TRON are also emerging.
stUSDT mainly invests in high-rated low-risk assets such as government bonds, with the initial intention of building a Web3 version of Yu’ebao (a popular money market fund in China), to bridge the gap between individual and institutional investors, and to connect the crypto and real world, providing a fairer RWA investment channel and a financial freedom investment opportunity for the 8 billion people worldwide.
According to the official website, since its launch on July 3rd, the total amount of stUSDT pledged has exceeded 410 million USDT, and the current APY is 4.17%.
Compared with other competitors in the market, most of them have different degrees of participation thresholds, such as Ondo Finance charging an annual management fee of 0.15%, Superstate adopting whitelist verification, Maple Finance requiring KYC certification, etc. In contrast, stUSDT only charges a 0.1% unlocking fee, and its simple and user-friendly interface and accessible participation method will further capture a wider user base.
Furthermore, similar to the stETH of the leading staking provider Lido, stUSDT is also a wrapped TRC-20 token. This design undoubtedly takes the composability of TRON finance to a higher level, making funds more flexible and efficient.
In addition, stUSDT will unlock more liquidity scenarios for USDT, making it more imaginative. It should be noted that USDT mainly serves as a stable value anchor and a medium of exchange, with limited usage scenarios. By choosing to anchor with TRC-20 USDT, stUSDT can have the same functions as other TRC20 tokens, which means it can unlock more liquidity scenarios and provide more room for imagination for USDT. Of course, in addition to USDT, according to Sun Yuchen, stUSDT also plans to introduce stablecoins such as USDC, TUSD, and USDD in the future. Currently, Huobi has reached a strategic cooperation with Justlend DAO to support stUSDT staking services, and wstUSDT has also been launched on Huobi.
Compared to other types of real assets, stablecoins are a fiercely competitive sub-track in the RWA field, with many of the top-ranking lock-up projects being tokenized government bonds. According to DefiLlama data, although stUSDT has been online for less than a month, its TVL (Total Value Locked) is ranked first at $410 million, far surpassing many other similar projects such as Ondo Finance, MatrixDock, Tangible, and Maple RWA.
Sun Yuchen also pointed out at the WebX conference that TRON has achieved many achievements at the current stage, and these advantages will enable stUSDT to have a strong foundation for development. On the one hand, TRON has one of the powerful Layer 1 blockchain protocols, with a total number of users exceeding 169 million, daily active addresses and transaction volumes much higher than Ethereum and Bitcoin, and advantages of low transaction costs and high capital efficiency. On the other hand, TRON has the largest circulation of USDT, surpassing Ethereum since 2021, currently accounting for 52% of the total global supply of USDT, with a total supply exceeding 43 billion. In addition, TRON has cooperated with mainstream exchanges and liquidity providers, and the current partners of stUSDT include TRON, TRONLink, JustLend, BitTorrent, JUST, Tether, WINkLink, and SUN.
Multiple measures make investments more stable
From traditional financial institutions like Silicon Valley Bank to liquidity crises caused by collapses in the crypto world like Terra and FTX, asset security is being put to the test. While optimizing the opportunities for users to obtain returns from real-world assets on the chain, stUSDT is building a decentralized RWA investment and management mechanism to establish trust in the security of user funds.
On the one hand, to ensure that users can redeem and withdraw at any time, 90% of the assets deposited by users in stUSDT are used for corresponding government bond investments, and 10% are stored in the stUSDT contract. Moreover, stUSDT provides various withdrawal methods. In addition to direct redemption, users can also withdraw through Sun.io and Sunswap V3 on TRON.
On the other hand, stUSDT maintains the rights and interests of community investors through the decentralized autonomous community RWA DAO, providing users with an open, equal, and secure RWA investment channel. The members of RWA DAO include the RWA Advisory Committee, the RWA Arranger, the Asset Manager, and the RWA Management Contract. The RWA Advisory Committee, elected by the RWA DAO, is responsible for overseeing the daily investment and operation of the RWA DAO, monitoring investment risks, and timely curbing potential risk influences. The Asset Manager executes the investment strategy provided by the RWA Arranger and makes certain adjustments based on actual conditions, and regularly discloses RWA investment performance and asset holdings on-chain.
Furthermore, RWA DAO also manages RWA-related smart contracts to ensure their stability, transparency, and efficiency. RWA DAO is operated by the decentralized platform JustLend DAO according to the custody agreement between the two parties. This is the first official lending project on the TRON blockchain and has the highest lock-up amount on the chain. It is mainly responsible for investment opportunity discussions, pre-voting, contract and execution voting, and execution. Of course, investment decisions are made jointly by the Advisory Investment Committee and RWA DAO, reducing the risk of malicious decision-making by a single decision-maker. At the same time, the pre-voting and contract and execution voting process can ensure that each investment proposal receives multi-level ratings, achieving more comprehensive investment decisions.
In addition, according to Sun Yuchen, in the future, stUSDT will continue to strengthen users’ awareness of risk management, such as reminding users of investment risks, providing risk assessment tools, and offering portfolio diversification, in order to help users better manage investment risks.
RWA is becoming the trend of future financial development. Citibank predicts that by 2030, there will be $4 trillion to $5 trillion of tokenized digital securities, indicating a broad prospect for RWA. Sun Yuchen also emphasized at the WebX conference that RWA is a profitable technological advancement that can increase liquidity by realizing partial ownership of assets, opening doors for individual and institutional investors. At the same time, RWA has unlimited potential. In addition to commodities, real estate, and artworks, many other categories of assets can also be tokenized, such as intellectual property, insurance, gold, and government bonds.
Just as Web3 is experiencing a rebirth in Japan, RWA assets like stUSDT are further enhancing the possibility of bridging traditional and crypto finance. In the context of the main narrative of RWA, the addition of “trendsetter” Sun Yuchen undoubtedly adds fuel to the fire and has already successfully disrupted the market.