DeFi Mining declines, RWA Mining saves the situation.

Written by: Sanqing

1. Introduction

On-chain Mining has long been a popular way to earn passive income in the crypto world. Whether relying on the computational power of PoW Mining or the staking and liquidity mining of PoS, participants can achieve above-average returns.

The reason people are enthusiastic about on-chain Mining lies in three main characteristics: ① a permissionless participation threshold, ② an on-chain traceable income distribution mechanism, ③ the combinable and liquid "financial Lego" properties of assets. These elements have made on-chain Mining a core narrative of DeFi and have also made APR one of the most sensitive figures for crypto users.

However, over time, the sustainability issues of traditional DeFi Mining have gradually become apparent. Many projects rely on inflationary token incentives and continuous capital inflows to maintain pool yields. After liquidity declines and market enthusiasm wanes, the once impressive mining returns mostly go to zero, turning into a Ponzi game of "cash out after one round."

In the face of this reality, please consider: Is there a more stable on-chain Mining model that is even backed by real assets? This is exactly what this article aims to introduce today: RWA Mining - by bringing real-world assets onto the blockchain, a reward mechanism based on real cash flow is constructed, and RWA mining pools are providing a new on-chain yield solution for stablecoin holders and long-termists.

2. What is different about RWA Mining?

It is clear that RWA Mining is an on-chain yield system with a stronger real-world basis and higher sustainability, but how is it different from previous mining models?

To better understand the uniqueness of RWA Mining, we can start from the basic types of mining and categorize mining into two main types.

Consensus Participation Type: Its essence is that users contribute resources, participate in chain consensus or build protocol foundations in exchange for rewards.

Incentive-oriented: This is more akin to a "behavioral incentive" mechanism, where incentives can be obtained through staking/holding assets and participating in interactions.

The uniqueness of RWA is apparent:

• It is not generating profits out of thin air, but relies on the cash flow brought by real assets;
• The staked/held is not the native governance Token, but rather an RWA token that has a mapping of real-world assets;
• Compared to DeFi mining pools that rely on inflation subsidies, RWA mining pools offer more predictable and robust returns, making them suitable for users with a lower risk appetite.

Taking the RST head mining activity of RealtyX as an example, users who purchase and hold RST enjoy property equity shares and rental income rights. By staking RST tokens backed by physical properties, users can receive a proportional share of the rental income from unsold RST on a daily basis.

This makes RWA Mining not a game of musical chairs, but a on-chain profit-sharing mechanism that participates in real-world value.

3. Coming from Real Assets: The Source of RWA Mining Returns

(1) What exactly has RWA tokenized?

In the process of RWA tokenization, the types of rights mapped by the tokens may include income rights such as rental returns, interest cash flows, and even some form of asset ownership.

However, in reality, constrained by the legal frameworks of various countries, most projects currently adopt a path of tokenizing revenue rights, meaning that the tokens represent cash flow rights linked to assets, rather than legal ownership or property rights.

Taking RealtyX as an example, RealtyX manages high-quality properties through SPV and maps them to users in the form of tokens, allowing holders to obtain continuous rental income and further participate in the platform's incentive mechanism.

RealtyX has completed "tokenization of revenue rights" within the existing legal framework, but from a user experience perspective, RealtyX's tokens are highly close to the concept of "ownership"—users have clear long-term returns linked to property performance, and can also transfer, stake on-chain, and participate in voting governance of the property token's corresponding SubDAO (including whether to sell, change brokers, etc.).

(2) How is RWA tokenized?

This article temporarily categorizes RWA tokenized assets into two types: financial and physical.

Financial assets (such as bonds, treasury bills, notes, fund shares, etc.) already have standardized contract structures and cash flows. The most common practice is to tokenize their "yield rights":

• Usually held by a fund, trust, or structured product vehicle to hold underlying bonds and other assets;
• The protocol obtains the daily net value / interest rate through the off-chain API interface;
• Smart contracts map it to Tokens and automatically distribute profits or reinvest compound interest;
• KYC, custody, valuation, yield calculation, and contract execution processes are relatively clear and compliance-friendly.

Physical assets (such as real estate, warehouse receipts, cars, machinery, etc.) cannot be directly "on-chain" and need to be tokenized through legal entities such as SPV and custodians as a bridge. Taking RealtyX as an example, the key processes of its real estate tokenization include:

Asset Identification and Valuation

RealtyX first selects high-quality properties in real estate markets such as Dubai, commissions professional agencies for evaluation and due diligence, and clarifies property value and investment potential.

Establishing a compliant structure (SPV)

After the assessment is completed, the platform establishes a Special Purpose Vehicle (SPV) to hold the target property in trust form, ensuring legal separation of assets and the project. The SPV is the holder of off-chain assets, providing the legal and operational basis for token issuance and subsequent profit distribution. Once the SPV takes over the property, it will delegate management and leasing to a local professional real estate agency. The agency will estimate the annual rental return and report actual operating data to the SPV. The SPV will then set up an on-chain profit distribution model based on this data, providing a real cash flow source for subsequent "Mining".

On-chain Issuance and Yield Mapping

SPV issues RST (RealtyX Standard Token) through smart contracts based on the property value and estimated cash flow, which represents the rights to the property as an RWA Token. Each RST corresponds to a certain proportion of the property share and earns rental income from the unsold portion according to the rules.

User Verification and Claim

Users must complete KYC before holding RST and becoming members of RealtyX SubDAO (real estate, RST, SubDAO correspond one-to-one), enjoying rights to profits and governance. Daily rental income is airdropped proportionally to holders' wallets, forming the actual source of on-chain "Mining" returns.

By leveraging this mechanism, a reliable tokenization path has been achieved from "real assets → compliant structure → on-chain Token → profit distribution", ensuring that the returns from RWA Mining come from real cash flows off-chain, rather than inflated incentive rewards. This is precisely the key to the greater sustainability and security of RWA Mining.

4. Go to On-chain Returns: On-chain Incentive Design for RWA Mining

Compared to traditional Mining that relies on computing power, inflation subsidies, and liquidity TVL, the incentive design of RWA Mining is more straightforward and reliable: what it distributes is not governance Tokens printed out of thin air, but stable cash flow generated by real assets.

This part of the content has been mentioned in the second part, and below is a brief description using RealtyX as an example:

In addition to the rental income rights brought by the tokens themselves, a head mining incentive mechanism has also been designed, which mainly consists of three parts:

• Rental Income Pool: Composed of the rental income generated from unsold shares of each property, allocated daily;
• Node Level System: Differentiated yield weighting based on the number of platform tokens staked by users;
• USDC airdrop distribution: The system will distribute earnings in the form of stablecoins to users' wallets according to the staking ratio, without the need for manual collection.

This is a fair and transparent on-chain profit-sharing model that encourages long-term participation. This design not only provides early participants with the opportunity of "the earlier you come, the more you earn," but also makes "those who are willing to accompany the assets to grow for a long time can continuously obtain returns" a reality.

5. Participation Suggestions and Risk Warnings

1. Understand the underlying assets and figure out where the "returns come from"

Different RWA projects correspond to significantly different underlying asset structures, and their sources of income vary. Be sure to review the project white paper, asset custody arrangements, income calculation logic, etc., before participating, to confirm their authenticity and compliance.

2. Start with a small investment, observe the rhythm of returns and on-chain behavior

It is advisable to prioritize platforms that have completed audits, have multiple assets launched, and support on-chain data queries. Participating with stablecoins is a relatively safe approach. Some platforms also have a "Yield Simulator" or "Daily Earnings Dashboard" that can be used to assess whether the mining pool is consistently distributing dividends.

3. Pay attention to mining stage and node incentive opportunities

Many platforms offer higher APR or Boost multiples in the early stages of new asset onboarding to attract early users. For example, RealtyX has a head mining period after each property goes live. Seizing early opportunities is the key window for obtaining excess returns on RWA.

4. Reasonable Assessment of Liquidity and Exit Mechanism

Due to the strong off-chain characteristics of underlying asset chains, the liquidity of most RWA tokens is not as abundant as that of ordinary governance tokens, which may lead to exit delays or price discrepancies in the secondary market. Before participating, clarify whether the platform supports redemption at any time, whether it supports circulation, whether it has liquidity incentive mechanisms, etc., and decide whether to participate based on personal risk preferences and financial arrangements.

5. Risks to Consider When Participating in RWA Mining Pools

• Off-chain asset volatility: Factors such as property vacancy rates, bond defaults, and fluctuations in storage prices can all affect actual returns.
• Compliance and KYC Restrictions: Most platforms require KYC completion, and some RWA tokens have a threshold of "for qualified investors only".
• Contract and Custody Risks: If the platform's contracts are unaudited or the asset custodian is unregulated, it may lead to financial or legal risks.
• Exit and Liquidity Risks: There are often issues such as inactive secondary markets and Token discounts after non-circulating assets are put on-chain.
• Transparency Differences: Different projects have varying degrees of disclosure regarding asset valuation, operational data, and dividend logic, which affects investment judgments.

6. Conclusion

As the DeFi narrative gradually recedes, the market re-examines the sources and structure of "yield." It reminds us that on-chain yield does not always have to rely on minting and speculation. When there are real rents, interest, or other income supporting the assets, so-called "Mining" is actually a lower-noise value-sharing mechanism. This logic may not bring astonishing APR in the short term, but it is expected to become a new refuge for stablecoin funds, providing certainty for long-termists.

Of course, RWA Mining is still in its early stages. Both the standardization of the asset side and the unified specifications of on-chain mechanisms need improvement. But it at least opens up a real possibility for us: Web3 is beginning to truly engage with the real economic system. For example, after buying the RST ( RealtyX real estate RWA token ), what you receive is not inflation tokens and superficial yields, but rather the tangible stablecoin rental income from that property every two weeks.

Perhaps this is the next stop for on-chain finance: moving from the era of structural design frenzy to a construction cycle supported by cash flow.