Author: Bonna | Partner, U Buttermilk , Nothing Research

RWA's narrative is not that traditional crypto is trying to steal users from crypto, but rather that crypto is trying to steal users from traditional crypto.

I. A weekend and a set of data

On February 28, the United States launched an airstrike on Iran.

Because it was the weekend, traditional global markets were closed, but @HyperliquidX was open, and a large number of users flocked to on-chain trading of crude oil for the first time. On March 2nd, when commodity markets reopened, Brent crude oil jumped, and RWA trading volume on Hyperliquid saw its first peak.

The crisis did not subside quickly despite the victory in Khamenei's assassination. As the situation continued to unfold, Hyperliquid's RWA trading volume broke records over the next two weeks, peaking on March 10. HIP-3 market open interest also surged to a record high of $1.3 billion.

Source: https://loris.tools/hip3

All of this is thanks to Hyperliquid's HIP-3:

An upgrade to a protocol that allows anyone to deploy a perpetual contract market without a permission.

A Hyperliquid research report released yesterday by @smartestxyz revealed a phenomenon that most people have overlooked: these HIP-3 marketplaces are not just serving Crypto users, they may be bringing people who have never been exposed to Crypto onto the blockchain.

The report tracks a metric called "Non-Crypto-First Users": users whose first on-chain transaction is with RWA Perp, not Crypto.

As of March 2026, this number was 49,602. Nearly 50,000 people first encountered cryptocurrencies not because of Bitcoin, but because of stock indices, gold, and crude oil.

Breaking it down by specific assets is even more interesting:

Source: https://x.com/smartestxyz/status/2033136128216244560

This list includes not only traditional commodities and blue-chip stocks, but also SpaceX (727 people) and OpenAI (458 people). These two companies are not publicly listed, and there are no traditional channels globally for retail investors to trade their shares, yet some people's first on-chain transaction was with them, using @ventuals ' product.

Perhaps because I've witnessed so many narratives come and go, I 've always had a preconceived bias towards the RWA narrative (then called STO, Security Token Offering), which started emerging in 2018: I felt it was an institutional narrative, a distribution of the Crypto market by traditional finance, and had nothing to do with us Crypto Natives. But the story told by this set of data is completely the opposite.

Differentiated assets lead to differentiated user base.

I forgot who said this, but I think it's the most accurate summary of the RWA track. It made me realize that my understanding of RWA in the past was wrong, and it also made me see that RWA can actually steal users from Tradefi. By providing assets and experiences that traditional finance cannot provide, and by serving users that traditional finance cannot reach, it has truly expanded the boundaries of the financial market.

Hyperliquid rekindled my hope for RWA.

II. Why traditional finance cannot serve these people

To understand RWA's core value proposition, one must figure out why these nearly 50,000 addresses came to the blockchain and went to Hyperliquid instead of traditional brokerages.

From my perspective, I believe there are several reasons:

1) Global Access:

For those living in places like the US and Europe with well-developed financial infrastructure, it's hard to realize how difficult it is for most people in the world to trade US stocks or crude oil. Opening a brokerage account requires KYC, depositing funds, and residency or visa for a specific region. Meanwhile, CFD brokers, as one of the alternative options, are restricted or have a poor reputation in many countries. This is truly a case of the well-fed not understanding the hunger of the starving in the financial world:

What you take for granted, "open the app and place an order," simply doesn't exist for most people worldwide. On Hyperliquid, you can trade as soon as your wallet is connected, without KYC or nationality restrictions. (Of course, the lack of KYC also means that some people will inevitably use this to achieve anonymous transactions and evade taxes; this wasn't the platform's original design, but it is indeed one of the objective motivations for its use.)

2) Extremely low entry barrier:

Traditional financial instruments typically have a "lot" size: a single lot of CME WTI crude oil futures is 1,000 barrels, which is approximately $70,000 at a price of $100 per barrel. Even a micro contract is 100 barrels, roughly $7,000. Futures brokers usually have minimum deposit and capital requirements, but on Hyperliquid, you can open a position with just a few dollars.

3) Higher leverage:

US Regulation T stipulates a maximum leverage of 2x for stock margin trading (overnight positions). Pattern Day Trader allows up to 4x leverage intraday, but only if your account equity is at least $25,000. In other words, you need $25,000 to qualify for 4x leverage. Hyperliquid's RWA Perp, however, offers 20x leverage with no minimum account margin requirement.

4) Exclusive Products:

HIP-3's permissionless deployment means that anyone can create trading instruments that don't exist in traditional finance. For example, exposure to unlisted companies like SpaceX, OpenAI, and Anthropic, which retail investors have no way to trade in traditional markets, can be done here. HIP-3 Deployer can stake HYPE to trade online.

5) 24/7 experience:

Traditional commodity and stock markets have strict trading hours. Although major exchanges are constantly striving to extend trading hours—for example, CME Globex has extended weekday trading hours to 23 hours (with only 1 hour of maintenance per day), Nasdaq has submitted a 23/5 proposal to the SEC (adding a night session from 9 pm to 4 am), the NYSE has received preliminary approval for 22/5, and the DTCC plans to achieve 24/5 clearing by 2026—most of these efforts only address weekday issues; weekends remain a vacuum.

The weekend of February 28th is a prime example: the US airstrikes on Iran caused market volatility, but traditional exchanges were closed, and you could only wait until Monday to trade crude oil, stock index futures, silver, and gold. RWA Perp, deployed on Hyperliquid, however, operates truly 24/7, 365 days a year.

Source: https://hyperscreener.asxn.xyz/hip3markets/markets

These are five things that traditional finance currently cannot do:

• Global Access

• Extremely low threshold

• Higher leverage

• Exclusive products

• 24/7 Experience

While traditional finance will strive to meet some of these criteria in the foreseeable future, satisfying all five simultaneously is virtually impossible under the current regulatory framework and market structure. Therefore, RWA's customer acquisition window may be much longer than many people imagine.

III. Two types of RWA requirements: Trading and Holding

Users flocking to the blockchain to gain RWA exposure can actually be broken down into two different needs:

1) Trading:

Traders want leverage, 24/7 availability, and low barriers to entry. Most of the 50,000 Non-Crypto-First users mentioned above should also fall into this category, which aligns with Hyperliquid's positioning and user profile.

The product that serves this need is Perp. But in fact, Perp is very similar to the contracts for difference (CFDs) offered by traditional CFD brokers (IG, Plus500, CMC Markets). They are all cash-settled, synthetic derivatives that track the price of the underlying asset without an expiry date.

Marco Antonio Ribeiro, CTO of OstiumLabs , once said something very insightful.

Source: https://www.ostium.com/blog/ostium-launches-novel-macro-trading-platform-amidst-growth-in-global-events-based-trading

Perp has two fundamental improvements over CFD:

• The first is the Funding rate, a periodic fee payment mechanism between long and short positions. When the price of Perp deviates from the underlying asset, an incentive is automatically generated to bring the price back. This is the core mechanism by which Perp keeps its price consistent with traditional market prices, which CFDs do not have.
• Secondly, there's self-custody, where your funds remain on the blockchain, not in the hands of the broker. The core problem with CFD is that the broker is your counterparty; when you make money, they lose money. This conflict of interest leads to numerous black market brokers manipulating prices, slippage, and withholding profits.

Ultimately, traders don't care whether they actually hold a barrel of crude oil or a lot of stock index futures; what they care about is quick entry and exit to profit from price differences and volatility. They want profits to be withdrawn smoothly, not withheld by shady brokerage platforms under the guise of illegal operations. In this respect, on-chain platforms like @HyperliquidX and emerging RWA Perp platforms like @OstiumLabs are far superior.

2) Holding:

But there's another equally huge unmet need: not for trading, but for holding. Long-term allocation to US stocks, global indices, and even managing a portion as retirement funds – there's a significant demand from a large number of non-US users worldwide, including myself, who is one of the thousands looking to invest regularly in US stocks and AI-related assets.

The product that serves this need is Tokenized Stock, a truly tokenized asset backed by real shares held by a custodian on a 1:1 basis. Its price anchoring mechanism is completely different from Perp's Funding Rate: it relies on subscription and redemption. When the on-chain price deviates from NAV, arbitrageurs can smooth out the price difference by minting (buying the underlying shares → minting tokens and selling) or redeeming (buying tokens → redeeming the underlying shares and selling), following the same logic as the ETF mechanism.

For these users, the demands are completely different: they don't need leverage, they don't need to be able to trade all the time, and they need real asset backing, compliance guarantees, and the security of holding stocks long-term. At this point, the issuer's reputation and endorsement become crucial. If you don't trust an issuer or believe it will continue to operate, it's better to withdraw your funds and put them in a traditional brokerage to buy stocks—it's more complicated, but more reassuring.

This isn't Hyperliquid's primary focus right now. Hyperliquid develops Synthetic Perp, which is essentially a more trustworthy CFD contract serving the trader community. The Holder line, on the other hand, is more about tokenized stock issuers like @OndoFinance and @xStocksFi , who are cultivating the area by using 1:1 real asset backing, licensed custody, and compliant structures to win the trust of long-term holders.

Even traditional financial giants are entering the market: ICE, the parent company of the NYSE, recently made a strategic investment in @okx at a valuation of $25 billion, planning to provide tokenized versions of NYSE-listed stocks in the future, clearly serving users who primarily hold for the medium to long term and secondarily trade for short-term purposes.

These two lines are developing rapidly in their own way, but they also share a structural problem:

Traditional markets are closed on weekends.

IV. Core issues to be addressed: Weekend prices

Frankly, RWA's infrastructure is more complete than many people realize. Hyperliquid HIP-3 achieved a cumulative trading volume of $110 billion within a few months, Ondo's Tokenized Stock (Ondo Global Markets) TVL is close to $700 million, and xStocks' cumulative trading volume is $3 billion, demonstrating strong demand. Where there is demand, there are market makers; where there are market makers, there is liquidity; the flywheel is already spinning.

However, weekend prices remain a significant challenge. After all, the price discovery power for traditional assets still resides in traditional trading venues, and weekend prices are not anchored—a fact that cannot be changed in the short term.

For Perp, the lack of a peg means the price can be manipulated, and market makers face unhedged risks. For Tokenized Stock, the absence of a minting/redemption mechanism prevents arbitrage, allowing on-chain prices to deviate from NAV in the short term. Of course, the impact on Traders and Holders differs. For Traders, weekend price volatility is fatal; leverage amplifies everything, and price deviations can lead to false liquidations or an inability to stop losses. However, for Holders, constant trading isn't necessary; weekend liquidity is acceptable, since you're unlikely to sell your retirement savings holdings over the weekend.

Currently, the industry's response to this issue is divided into two camps:

1) Conservatives: No trading on weekends, accepting a liquidity vacuum.

@OstiumLabs , which creates RWA Perp, follows this path: orders cannot be placed when traditional markets close, and the oracle stops updating. @OndoFinance and @xStocksFi , which provide tokenized stocks, are essentially conservative as well. Minting and redemption only take place during US stock market trading hours. Although the token can be traded on DEXs on weekends, the official platform does not provide liquidity guarantees. 24/7 trading does not equal 24/7 accurate pricing.

2) Radical approach: Conducting weekend price discovery themselves.

@tradexyz, the largest HIP-3 Deployer on Hyperliquid, is the founder of this school of thought. His solution is called Discovery Bounds, which is essentially a price limit system. In version V1, the weekend price was capped at ±5% of Friday's closing price; if the price touched this limit, it was locked. V2 improved this: if the price consistently hits the upper limit, the system will move the overall upper limit up by one level, up to twice, expanding the total range to approximately ±15.8%, but the real-time window remains always ±5%.

Frankly speaking, price limits are nothing new for Chinese A-share investors: ±10% for the main board, ±20% for the STAR Market, and ±5% for ST stocks. The 2015 stock market crash proved that price limits also have limitations: thousands of stocks hit their daily limit down, and some stocks remained at their limit up for several consecutive days, making it impossible to escape. Fortunately, with the continuous extension of trading hours in traditional markets, @tradexyz only needs to cover the less than 48-hour vacuum period on weekends (which will even be shortened to about 25 hours after the Nasdaq launch on May 23). After the traditional markets open on Monday, external price anchoring is restored, and the overall risk can be absorbed by the deep liquidity of the traditional markets. Essentially, Trade.xyz acts as a safety cushion to mitigate risk in advance, allowing traders to gradually hedge and adjust their positions over the weekend, rather than piling all the pressure on the moment the traditional markets open on Monday, thus reducing the intensity of the market after the traditional markets open.

@tradexyz is not the only 24/7 radical.

@Dreamcash (strategic investment from Tether in February 2026, USDT0 settlement, launched markets for S&P 500, gold, silver, etc.), @felixprotocol (USDH settlement, simultaneously operating DeFi lending protocols and CDP-based stablecoins, and partnering with Ondo to introduce Spot Equities), and @kinetiq_xyz (pioneer of on-chain US Treasury Perp USBOND), among other HIP-3 Deployers, have all deployed their respective RWA Perp markets on Hyperliquid, and have largely adopted the 24/7 market design paradigm pioneered by @tradexyz . This is actually the best transitional solution currently available.

While there is significant overlap in the assets deployed by these Deployers, interestingly, this doesn't seem to be involution, but rather more of a brokerage logic: each Deployer has its own front-end, its own user community, and its own customer acquisition channels. Their users may not necessarily be aware of other Deployers, nor do they necessarily trade on Hyperliquid's main site's mixed UI. Data proves this point:

Source: https://x.com/smartestxyz/status/2033136128216244560

Of the nearly 50,000 users who first entered Hyperliquid due to traditional assets, TradeXYZ contributed 92.75% (46,005 people), Ventures 3.73% (1,851 people), Dreamcash 2.02% (1,000 people), Felix 1.02% (508 people), and Kinettiq 0.48% (238 people). Each HIP-3 Deployer is bringing incremental users with different profiles into the Hyperliquid ecosystem through their respective front-ends and customer acquisition channels.

V. Pre-IPO: What Wall Street Can't Do

The root cause of the weekend price issue is that on-chain assets rely on external anchoring in traditional markets. When traditional markets close, the anchor breaks. So why not create opportunities where the underlying assets themselves don't exist in traditional markets?

Pre-IPO assets present precisely such an opportunity.

The global private equity market is worth trillions of dollars. In the traditional market, retail investors only have two ways to invest in pre-IPO companies: first, they can become qualified investors and participate through private equity funds, which has a threshold of millions of dollars; second, they can buy existing shares transferred by employees on secondary market platforms such as Forge Global and EquityZen, which have extremely poor liquidity.

@ventuals is a project that fills this gap on Hyperliquid, providing PERP contracts that track the valuation of private companies. Users gain price exposure to valuation changes, with the contract price equal to the company's valuation divided by 1 billion. Contracts are settled in USDH, with a maximum leverage of 3x.

Of course, pricing the private company valuation (Perp) using an Oracle Price is a challenge. Ventuals' approach is interesting: the Oracle Price is a weighted composite of off-chain valuation data and on-chain Mark Price. The off-chain portion is integrated with Notice (a platform that provides private company valuation data), while the on-chain portion uses the 2-hour EMA of the Mark Price. The two are weighted at 1/3:2/3 to synthesize the Oracle Price, which is updated every 3 seconds. Short-term fluctuations in the Mark Price are also limited to prevent short-term manipulation.

Once the target company goes public, the Ventures' Perp will be liquidated and settled. On the first day of trading, after the opening bell, the Mark Price will be based on the real-time stock price, and the Oracle Price will be directly equal to the Mark Price, no longer referencing the valuation data from the Noice platform. After the market closes, all Ventures positions will be settled at the closing price. The Pre-IPO Perp transitions into a settlement statement based on the IPO's performance on the first day, meaning traders are actually participating in a game of IPO price, somewhat reminiscent of the Polymarket prediction market or the FDV market for new coin listings.

Interestingly, judging from the data from Ventures...

Source: https://x.com/smartestxyz/status/2033136128216244560

31% of Ventures users made their first on-chain transaction in the Ventures marketplace, and nearly a third entered the Hyperliquid ecosystem because of the Pre-IPO Perp. 25% of users only trade in Ventures and don't use any other HIP-3 Deployer. This precisely confirms what we said earlier: RWA is actually attracting a distinct user base.

VI. Some downstream derivative opportunities of RWA

However, RWA is not just about trading and holding; it is also creating new downstream demand:

1) On-chain stock options : @ryskfinance @DeriveXYZ

When people start holding and trading stocks on the blockchain, the demand for options naturally follows, because the profiles of the two types of users highly overlap. For example: 1) Holders of tokenized TSLA want to earn extra income while holding long-term: sell Covered Calls and collect option premiums; 2) Traders who are long on TSLA Perp want to insure their leveraged positions by buying Puts to limit downside risk; 3) People who are bullish on TSLA but think the current price is too high want to profit while waiting for a pullback: sell Cash Secured Puts, and if the price drops to the target price, they will buy the put; if it doesn't drop, they will earn the option premiums for free.

Previously, on-chain stock options didn't exist because a crucial element was missing: after market makers accepted option buy and sell orders, they needed to perform Delta hedges using the underlying assets, and there wasn't a sufficiently deep on-chain stock or futures exchange to execute these hedges. Now, with TSLA Perp on HIP-3 handling hundreds of millions of dollars in daily trading volume, this prerequisite has been met.

@RyskFinance has already verified covered calls and cash secure puts for cryptocurrencies on Hyperliquid, so adding stock options is a natural progression. Counterparty can directly delta hedge on Hyperliquid's Perp. @DeriveXYZ also supports deposits into Hyperliquid and using HYPE + USDH as collateral, currently primarily with cryptocurrencies. However, once the liquidity of the stock Perp is sufficiently deep, on-chain RWA options will simply be adding another underlying asset.

2) On-chain stock lending market : @jup_lend @kamino @TermMaxFi

The rapid growth of Tokenized Stock TVL naturally spurred the lending market. This isn't just a simple matter of "holding Tokenized TSLA and using it as collateral to borrow USDC" (although this is itself a huge demand, as long-term holders don't want to sell their shares but need liquidity). More interestingly, lending can unlock a range of structured strategies:

Looping: Collateralize Tokenized TSLA → Borrow USDC → Buy more Tokenized TSLA → Collateralize again, cyclically amplifying TSLA exposure. This offers greater on-chain composability and eliminates the need for broker approval.

Funding Rate Arbitrage: When the funding rate of TSLA perp is positive (longs pay shorts), you can borrow USDC and hold long tokenized TSLA (holding spot) + short TSLA perp (hedging directional risk). Conversely, when the funding rate is negative, you can borrow tokenized TSLA and sell (selling spot) + long TSLA perp (hedging directional risk). Both strategies earn the spread of the funding rate minus the borrowing rate. You can even use interest rate swap protocols like @SupernovaLabs_ , @ipor_io , and @boros_fi to help you lock in borrowing costs or funding rate fluctuations! A classic on-chain version of cash and carry arbitrage.

The infrastructure supporting these strategies is rapidly taking shape. The @solana ecosystem is progressing the fastest: @kamino has accepted xStocks as collateral for lending Stablecoin, @jup_lend has also integrated with xStocks, and @falconfinance accepts xStocks to mint synthetic USDF. On the Ethereum/BNB side, @TermMaxFi launched the first fixed-rate lending market on the BNB Chain using Ondo Tokenized Stock as collateral. With the lending infrastructure in place, Perp liquidity deepening, and Tokenized Stock growing, these three elements mutually support each other, creating a flywheel effect.

VII. I hope this time it really will be different.

If you've been in the crypto industry long enough, you might react with the same conditioned reflex of wariness when you see the phrase "traditional assets on the blockchain," because this isn't the first time.

1) The STO craze of 2018-2019

Polymath, Harbor, and Securitize raised substantial funds, telling the story of "compliant tokenization." However, they had few transactions, excessively focused on the supply side, and spent a lot of energy on legal structures and regulatory connections with asset issuers, ultimately making things more complex than traditional IPOs. More fatally, they emphasized the tokenization of private equity, which inherently has lock-up periods. Tokens, once issued, could only be traded after the lock-up period expired, resulting in virtually no liquidity in the secondary market. Ultimately, only Securitize survived to this day due to its ties with Circle and BlackRock. If they had focused on public stock tokenization or gone straight for PERPs, the story might have been completely different. However, while BitMex's PERPs were already gaining popularity at that time, no one had yet considered extending them to non-crypto native assets. The concept of everything being PERP-able wouldn't be truly realized until many years later with the genius SBF of FTX.

2) The stock token wave led by FTX in 2021-2022

FTX launched tokenized stock trading: 24/7 trading of TSLA, AAPL, COIN, etc., with 1:1 backing and custody provided by the German licensed broker CM-Equity AG, supporting fractional share trading, bridging traditional finance and crypto. The product experience was actually very good, and there were users. However, with the collapse of FTX and the imprisonment of SBF, everything was wiped out. Regulators immediately pointed out serious deficiencies in investor protection, and trust in the entire sector vanished overnight. But the product innovations left by FTX: including Perp for everything, cross-product collateral, and unified margin, these mechanisms were almost completely inherited by the Hyperliquid ecosystem, which also modified the trust model.

So what's different this time?

Having learned from past experience, the posture was correct:

First, the supply-side driven mechanism has shifted to the demand-side driven mechanism.

After FTX, every surge in RWA has been driven by demand: the DeFi crash in 2022-2023 and the sharp drop in on-chain yields, coupled with the Fed's interest rate hikes, caused US Treasury yields to soar to 5%. On-chain users naturally needed an on-chain US Treasury product to obtain risk-free returns, so US Treasury RWA grew from zero to billions of TVL. This is purely demand-driven.

The logic behind this RWA Perp surge is clear: In early 2026, crude oil, gold, and silver prices surged, geopolitical crises continued, traditional markets were closed on weekends, and trading was impossible; only on-chain trading was possible. 50,000 people spontaneously came to Hyperliquid to trade stock indices and crude oil; no one distributed flyers, no airdrop incentives—it was genuine trading demand that drew them onto the blockchain.

Second, focus on what traditional finance cannot provide.

In the past, STOs were simply "repackaging unwanted private equity assets and putting them on the blockchain": the underlying assets, legal structure, and trading logic were all copied from traditional finance, with the blockchain merely serving as a clearing and settlement medium. Lacking liquidity, users naturally had no reason to use it. This round is different: With PERP, 24/7 trading, pre-IPO PERP, higher leverage, and no minimum investment threshold are features that simply don't exist in traditional finance. With Tokenized Stock, global access and on-chain composability (for DeFi collateral, looping, and funding rate arbitrage) are features that traditional brokerages can't provide. Users are coming not because the on-chain version of stocks is better than the brokerage version, but because these experiences are only available on the blockchain.

However, risks remain: regulatory shifts, oracle attacks, issuer bankruptcies and absconding, liquidity crises—any one of these could cause this story to fail again.

Having irreplaceable value gives you the confidence to attract new customers.

Furthermore, when 50,000 people first encountered Crypto not to buy BTC but to trade stock indices and oil, when ICE, the parent company of the NYSE, invested in OKX at a valuation of $25 billion and obtained a board seat, when Nasdaq applied for 23/5 and DTCC planned to liquidate on 24/5, everyone could see that the demand was real and traditional finance was truly involved. At least this time, the starting point was different.

Do good deeds and don't worry about the future.