jakiro
Source: 0xngmi, founder of DefiLlama; compiled by: bitchain vision
False indicators in RWA
With DeFi apps, anyone can verify TVL by looking at the assets stored in chains and contracts, but for RWA, this verification is impossible because they are more opaque, which leads to an increase in the number of RWA projects, thus exaggerating their TVL.
One example is that when you go to RWA.xyz you will find that ZKSync is ranked second in RWA, and there is a huge gap with all other blockchains.However, I bet that the people who read this article certainly don’t have ZKSync’s RWA, so what exactly is going on?
According to them, the token is the largest RWA asset on ZKSync with a market capitalization of $235 million:
https://era.zksync.network/token/0x6ff4fafd8d604614c704a5936d9146c0af19bd1e#balances
The token currently has 11 holders and has never been transferred or redeemed between addresses since it was created 300 days ago.All activities total 31 transactions, issuers mint tokens to or destroy tokens from an address, all holders are just dead addresses, lifelong transaction records are 0, and there is no Gas to trade.
The second largest RWA asset has a market capitalization of $202.5 million, and the same is true, with only 10 holders and no activity between addresses since its creation:
https://era.zksync.network/token/0xac4de1e9a9e83524f24af77972dd39d588de8164
The same goes for the vast majority of RWA TVLs on ZKSync.
What’s the point of this?The issuer here has only one internal database, which just mirrors the database to some address with zero activity in the blockchain, so any new changes to the database are just pushed to the blockchain, and that’s it.I think these may not even be bearer assets.
Another similar case is that a company minted a token that is entirely owned by themselves and said “this token represents equity in a company, and we value the company at 500 million, so we ask to be listed as an RWA issuer with $500 million TVL”, a token that is not traded and no one owns it, just 100% of the supply is placed on their own address.
I’m not sure if the company is doing this to exaggerate the metrics, or to claim that it’s working with blockchain, or for other reasons.butWhen users think of RWA, they think of stocks that can be purchased, tokenized houses, or any financial assets that can be transferred or exchanged on-chain, which is obviously not what is happening here.
The value of DefiLlama is that users trust us to provide them with good data, so if we list this and say “Look, in terms of RWA, ZKSync adoption is 10 times that of Solana”, when people trade stocks, hold stocks…and on ZKSync it’s just a mirrored database with no activity, not even a single transfer, we’ll hurt them because users might invest in ZK based on the argument that RWA adoption is 10 times better than solana, and then they’ll be beaten because that argument is wrong.
In addition, TVL is also used to measure the market’s trust in a project and the risk of the project.There is no risk in such cases where only one address is required to mint tokens and then destroy them to 11 empty addresses.If anything bad happens, they just need to cancel the blockchain part.This goes against the use of TVL as a trust indicator.
Therefore, it is crucial for us to provide quality data that meets users’ expectations and can help them make the right decisions.We value users’ trust and want to make sure our metrics reflect reality.
This leads to the frequent belief that Defilama’s RWA data is incomplete compared to RWA.xyz’s RWA data.Because the number of RWA.xyz is much larger, but the reason is that they took the approach of listing everything, and we deliberately did not list the above items to make our RWA adoption data more accurate.Their approach led their data to show for years that Provenance ranked first in RWA adoption, far higher than Ethereum and all other blockchains, although every institution launches products on these other chains.Now they overturned the decision and removed it, but based on the tokens I discussed before, ZKSync is still the second-ranked blockchain in RWA adoption.
That’s why we put a lot of energy into RWA doing due diligence, checking everything on the chain, verifying RWA’s support to ensure its authenticity…
Due diligence on Figure
Figure claims they issued 12 billion RWA on-chain, but when we investigated, we found something strange:
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Their exchange has only $5 million in BTC and $4 million in ETH (BTC’s 24-hour trading volume is only $2,000)
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Their own stablecoin, YLDS, should be based on all its RWA transactions, but the supply is only 20 million
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Most transactions that transfer RWA assets appear to be conducted by other accounts other than those that hold them.
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The vast majority of their loan processes are done in fiat currency, and we can hardly find any on-chain payments
So we are not sure how 12 billion assets are traded with so few assets available for trading on the chain.Since most holders don’t seem to transfer these assets with their keys, are they just mirroring their own internal database to the chain?
As part of the due diligence, we’ve been mining and sharing this information with their team in the telegram group chat for a while, and when they submitted the PR, our developers asked a bunch of questions about the release, how their system works… One of the questions is that they’re showing up so little on Twitter and TVL has 12 billion, which seems odd, we need them to provide more details to validate the data.
Then, a man who spent months in this group chat, learned about the entire due diligence process and the questions we asked, tweeted that defilama refused to go online for the reason they had insufficient Twitter followers.Over the next few days, I received private contacts from defilama and our partners (who subsequently forwarded the tweet to me) from major cryptocurrency institutions and venture capital firms asking why we refused to go online because of their insufficient number of Twitter followers.
What a funny world!This guy, even though he knew the reason for due diligence, came out to make up lies and tried to get everyone to put pressure on us to skip the listing process so that they could raise various indicators before the IPO.Now I write an article claiming that we refuse to list a project, not because they have few Twitter followers.
What’s worse is that the CEO of their cooperative public chain actually said that we would charge a listing fee, which is a complete lie.We have never asked for it and have never received a listing fee.We lost a lot of money for this.
