Tron's stUSDT, aiming to become the 'Yu'ebao' of the crypto world.

With the changes in market environment and macroeconomics, the narrative of DeFi products is also changing. A new source of real yield is gradually emerging: Real World Assets (RWA) that exist off-chain, which are brought onto the chain through tokenization and serve as another source of income for the DeFi ecosystem.

After MakerDAO successfully shifted its focus from crypto collateralized lending to RWA (real-world assets), RWA Vault has become the largest source of revenue for the MakerDAO protocol. According to makerburn.com, as of June 29th, Maker's annual profit performance has been outstanding, estimated at $73.67 million, the highest in over a year. At the same time, we can see from DefiLama's data that narrative coins related to RWA have shown remarkable performance in the past month.

With the increasing popularity of Real World Asset (RWA) tokenization, Compound founder Robert Leshner has embarked on a new entrepreneurial journey by founding Superstate, a company focused on the RWA space. RWA seems to have the potential to become the next hot concept.

RWA has clearly caught the attention of TRON. TRON founder Justin Sun announced on social media that stUSDT will be launched on July 3, making it the first RWA tokenized asset product in the TRON ecosystem. The original intention of stUSDT is to build a platform similar to Yu'ebao in the cryptocurrency field, which operates through the encrypted collateral lending agreement JustLend established on the TRON network.

What is stUSDT? RWA concept, the Yu'ebao of the crypto world

stUSDT platform is committed to bridging the gap between individual and institutional investors, the crypto world and the real world, and TradFi and DeFi through smart contracts. It aims to provide a more equitable RWA investment channel for everyone by eliminating the gap between individual and institutional investment targets. By introducing real-world assets into the TRON chain ecosystem, stUSDT hopes to become a pioneer in connecting RWA to the crypto field.

RWA (Real World Assets) can represent many different types of traditional assets (including tangible and intangible assets), such as commercial real estate, bonds, cars, and almost any asset that stores value and can be tokenized. Simply put, RWA is "tokenizing real assets", and any physical asset that can be marked and represented on the chain can be called RWA.

Anchor stablecoin platform stUSDT

Compared to real estate, cash (USD), gold and silver, luxury goods, bonds, and insurance, stablecoins are one of the most compatible products with the DeFi market in terms of real-world assets. Currently, the total market value of stablecoins is about 130 billion US dollars, of which USDT accounts for 62%, making it one of the first cryptocurrencies to be pegged to the market value of the legal currency USD. Therefore, USDT has become the first target for stUSDT to enter the RWA track.

The Token of the stUSDT platform is also named stUSDT, which is a RWA certificate token obtained by users pledging USDT. The stUSDT token has the same value as USDT and has the same functions as other TRC-20 tokens. It can be freely transferred and is supported by most smart contracts. Within certain rules, the stUSDT platform will always maintain a 1:1 exchange ratio between stUSDT and USDT to ensure that users receive profits. The stUSDT platform provides a complete set of user-friendly interaction interfaces to facilitate users to pledge and obtain stUSDT and redeem USDT.

As a decentralized certificate connecting real-world assets to the TRON network, stUSDT allows users to participate in real-world investments and earn passive income in RWA by holding stUSDT. Through the Rebase mechanism of stUSDT, the amount of stUSDT held by the holder will gradually increase while receiving platform distribution profits. In other words, the longer stUSDT is held, the higher the income received. At the same time, stUSDT will build a decentralized investment strategy, asset management mechanism, and determine investment and data disclosure strategies. The USDT in the stUSDT contract will be used to invest in high-rated, low-risk quality assets in RWA.

Although similar to MakerDAO, starting with encrypted collateral lending and entering the RWA track, MakerDAO's DSR (DAI deposit interest rate) is 3.49%. In contrast, after the launch of stUSDT in the TRON ecosystem, the initial investment will receive a 10% annualized subsidy, making it one of the highest deposit interest rate stablecoin RWA products in the current market.

How does stUSDT operate?

stUSDT platform provides users with a decentralized voucher that is linked to real-world assets. By pledging USDT to the RWA Vault Contract, users can obtain equivalent stUSDT tokens, which also serve as vouchers for RWA. Holders of stUSDT tokens can enjoy passive income from RWA investments, with the amount of income proportional to the length of time held.

The operating mechanism of stUSDT is RWA DAO, and currently RWA DAO has entrusted JustLend DAO to operate it. The core operating process of stUSDT mainly includes investment opportunity discussion, pre-voting, contract and voting execution, execution, as well as pledge, investment strategy execution, profit distribution, performance disclosure, performance evaluation and strategy adjustment, supervision and risk control, etc.

Decentralized RWA DAO

RWA DAO is a decentralized autonomous community that focuses on RWA investment through the TRON network. Its aim is to safeguard the rights and interests of community investors and provide a public, fair, and secure RWA investment channel for users. RWA DAO also manages RWA-related smart contracts to ensure their stability, transparency, and efficiency.

RWA DAO includes various roles, including: Advisory Council, RWA Arranger, Asset Manager, and RWA Vault Contract.

RWA DAO Roles and Functions Chart

The functions of the Advisory Council (RWA Investment Advisory Committee) include: the election output of RWA DAO, composed of professionals in the TradFi and DeFi investment fields; responsible for supervising the daily investment and operation of RWA, and delivering major adjustments to RWA DAO for voting when necessary; monitoring RWA investment risks and timely suppressing potential risk impacts; appointing RWA Arranger and evaluating their performance.

The function of RWA Arranger includes: finding investment clues and opportunities, and formulating directional investment strategies; recruiting Asset Managers and verifying their qualifications; evaluating RWA investment performance and adjusting investment strategies when necessary.

The function of Asset Manager includes: implementing the investment strategy provided by RWA Arranger, and adjusting the actual investment strategy within a certain range according to the actual situation; performance predictor: regularly disclosing RWA investment performance and asset holding status on the chain.

The functions of the RWA Vault Contract include deploying for RWA Arranger, safeguarding assets according to established strategies, and distributing RWA investment returns.

stUSDT Investment and Operation Process

The RWA online process and daily operation process of the stUSDT platform are rigorously and meticulously arranged to ensure the transparency and efficiency of all operations.

The RWA launch process begins with a discussion of investment opportunities by the Advisory Council. They first discuss potential RWA investment opportunities and corresponding investment strategies proposed by the RWA Arranger, and decide whether to proceed with further follow-up. In the RWA DAO, a pre-vote will be initiated, which is a critical step in deciding whether to proceed to the RWA Arranger execution phase. Once the pre-vote is passed, the RWA Arranger's developers will generate the RWA Vault Contract and the corresponding voting execution. After the voting execution is passed, the RWA Vault Contract will automatically take effect, and the RWA Arranger will initialize the various parameters of the configuration contract.

After the official launch of stUSDT platform, the daily investment and operation process of RWA has been carefully designed to meet the needs of users and the platform. Users can participate in RWA investment by pledging USDT to RWA Vault Contract. Afterwards, asset managers will use these funds to invest and execute established investment strategies. The profits generated from the investment will be distributed to users through RWA Vault Contract. In order to maintain transparency, asset managers need to regularly disclose RWA investment performance and asset status. Similarly, RWA Arranger also needs to regularly evaluate the performance of RWA investment and adjust investment strategies according to the situation. The supervision and risk control of the entire process is the responsibility of the Advisory Council, who supervise RWA investment and daily operations, and monitor and intervene potential risks to ensure the safety and stability of the platform.

Meanwhile, the official stated that from July 3rd to August 10th, a redemption fee discount promotion will be launched in sync with the product. For the convenience of users, daily announcements on investments and Rebase will be disclosed and can be found on the official Medium.

Advantages of stUSDT platform

Decentralized investment decision-making process: On the stUSDT platform, investment decisions are collectively made by the Advisory Council and RWA DAO, which can effectively prevent risks brought by single decisions. At the same time, the diverse decision-making structure ensures a comprehensive investment perspective.

Clear execution mechanism: Pre-voting and executing voting provide clear operational steps for each investment decision, ensuring that each decision is fully considered and demonstrated. This clear decision-making and execution process provides investors with a clear decision-making path and investment transparency.

Powerful Pledge and Investment Strategy: Users participate in RWA investment by pledging USDT, and Asset Managers use these funds to execute established investment strategies. This provides users with a convenient investment channel, and through the professional operation of Asset Managers, users are more likely to achieve excellent investment returns, thereby increasing their investment return rate.

Timely performance disclosure and strategy adjustment: Asset Managers need to regularly disclose RWA investment performance and asset status, while RWA Arrangers need to regularly evaluate RWA investment performance and adjust investment strategies. This timely information disclosure and strategy adjustment provides investors with timely investment information, enabling them to effectively manage and adjust their investments.

Powerful supervision and risk control: The Advisory Council is responsible for supervising RWA investments and daily operations, and monitoring and intervening in potential risks. This efficient supervision and risk control mechanism can help investors understand investment risks in a timely manner, and also provide certain risk prevention for investors.

High Yield: Compared to the DSR (DAI Savings Rate) provided by MakerDAO at 3.49%, the deposit interest rate for DAI on Aave is 2.6%, the deposit interest rate for USDC is 2.83%, and the deposit interest rate for USDT is 2.69%. stUSDT can provide a yield of up to 5%, a significantly higher number than other platforms.

Backed by Tron: stUSDT also greatly leverages the advantages of Tron. As an efficient blockchain network, Tron has the characteristics of fast, secure, and low cost. On the Tron network, stUSDT can take advantage of these benefits to provide users with a faster, cheaper, and more secure service. Moreover, Tron's large user base and extensive application ecosystem also provide stUSDT with broad market space and development opportunities.

Will on-chain/off-chain asset circulation become a new model?

Not only native crypto protocols like TRON, MakerDAO, Aave, and Polygon are entering the RWA track, but traditional TradFi institutions and enterprises also seem to be more interested in RWA, either planning or already laying out their strategies in the RWA track. Examples include JPMorgan, Goldman Sachs, Hamilton Lane, DBS Bank, UBS Group, Temasek, HSBC, BlackRock, Siemens, and more.

Entity assets occupy a huge share in the traditional financial world. According to Coingecko's data, as of April 25, 2023, the total market value of the cryptocurrency market is about $1.2 trillion. In comparison, according to Statista's data, the global real estate market is a staggering $228 trillion, the total market value of gold is about $12.4 trillion, and the total size of the global bond market is about $133 trillion.

However, these massive assets have been largely untapped in the decentralized finance (DeFi) world, and this is where RWA can come into play, as well as being a huge market and opportunity for TRON's stUSDT platform.

From real estate to commodities, from private equity and credit to bonds and art, the tokenization of tangible assets has quietly emerged in our lives. These tangible assets, once known as "security tokens" or "tokenized securities," use blockchain technology to bring traditional assets onto the chain. By doing so, we can lower the minimum investment threshold, increase access through partial ownership, increase trading of previously illiquid assets, and improve transparency and security. By bringing real-world assets into the DeFi field, RWA also adds available liquidity to the market and provides a new asset class for DeFi participants to invest in and receive returns.

The on-chain entry of RWA has a potentially transformative impact on the DeFi market. The tokenization of real-world assets could have a revolutionary impact on the DeFi market. RWA provides a sustainable, diversified, and real yield supported by traditional assets for the DeFi market. Moreover, RWA builds a bridge between decentralized finance and traditional finance, which means that RWA can bring massive liquidity and market opportunities from traditional financial markets to the DeFi market.

Regarding the potential of tokenizing real-world assets (RWA), Citibank pointed out in its latest research report that RWA is a key factor in driving the blockchain industry into a market worth trillions of dollars. It predicts that by 2030, there will be $4 trillion to $5 trillion worth of tokenized digital securities. Although it has not yet reached a large-scale adoption, it is approaching a turning point in growth.

Boston Consulting Group (BCG)'s statistical data and projections express a stronger confidence: the RWA market may reach an astonishing $16 trillion by 2030. If the barriers to traditional finance being put on the chain can be broken, the DeFi market will welcome exponential growth, and RWA will usher in a trillion-dollar incremental market, injecting massive liquidity and vast market opportunities into the DeFi market.

TRON Network has chosen to explore this field and launched the stUSDT platform, seeing the potential of this market. Perhaps we can expect a phased outbreak in the RWA track in the second half of this year. At the same time, the stUSDT platform will also occupy a large market share with its advantages, providing users with excellent returns and rewards.

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