2025 Year in Review: Why RWAs are Taking Off in 2026 with Chris Yin and Teddy Pornprinya of Plume

The "One Big Thing" is that Real World Assets (RWAs) are transitioning from an institutional-only, T-bill-dominated niche to a rapidly expanding, diversified, and retail-accessible on-chain market, driven by declining T-bill yields, innovative crypto-native platforms like Plume, and a global search for higher, permissionless yield. This shift will lead to an "explosion" of capital and new winners in 2026.

1. The RWA Yield Hunt: Beyond T-Bills:

• "Big picture though, it comes down to two things, right? Risk and yield. And those are the two dimensions that kind of come back and forth."
• "As these rate cuts are coming down, T-bills are going down, right? The rate. So this 5% is down to four now to three, three and a half-ish, right? And so that's going down. So people are now searching for new yield, new places."

2. Permissionless Access & Crypto-Native RWA Mechanics:

• "The biggest thing that we're doing differently is actually allowing permissionless access to these different assets."
• "We've always wanted to interact with these assets like crypto. And the dimensions of crypto are very simple, right? They're liquid, they're permissionless, and they're composable."

3. The Global & Multi-Chain RWA Expansion:

• "The RWA opportunity isn't just stuck in the US. There's a lot of velocity in Asia, a lot of velocity in the Middle East, a lot of velocity honestly anywhere outside of the US."
• "I think the question is centralized versus decentralized, and we're using centralized in the front end and decentralized in the back."

Synthesize Insights:

Theme 1: The RWA Yield Hunt: Beyond T-Bills

• Yield Compression: As Fed rates decline (T-bill yields dropping from 5% to 3-3.5%), the "risk-free" rate becomes less attractive, forcing capital to seek higher returns.
• CLOs as the Next Step: Collateralized Loan Obligations (CLOs) like the Janice Henderson AAA CLO fund offer 6-7% yield with relatively low risk and high liquidity (T+1/T+2 settlement), attracting significant institutional capital ($500M single LP).
  • Analogy: Think of T-bills as a savings account with a guaranteed, low-interest rate. CLOs are like a slightly riskier, higher-yield bond fund that bundles many different loans together, spreading out the risk.
• Duration Risk: Higher yields often correlate with longer duration (time until principal return). Crypto users, accustomed to instant liquidity, are uncomfortable with 3-15+ month lockups, creating a mismatch that platforms must address.
  • Analogy: Duration is like how long your money is locked in a CD. A 3-month CD has short duration; a 5-year CD has long duration. In RWAs, it's how long until you get your initial investment back.
• Private Credit's Role: Private credit markets are seen as sturdy and less squeezed than perceived, offering uncorrelated yields (14-17%) less affected by Fed rate cuts, appealing to those seeking higher returns.

Theme 2: Permissionless Access & Crypto-Native RWA Mechanics

• Retail Adoption Driver: Plume's success (over 50% of RWA holders) stems from making RWAs permissionless, liquid, and composable, mirroring crypto-native DeFi experiences.
• RWA Looping: Users can deposit RWA assets into vaults (e.g., NBasis with Superstate's USCCC fund), take out collateral tokens, and re-lend them on protocols like Morpho to "loop" for higher yields (e.g., borrowing at 6-7% to earn 9-10%).
  • Analogy: RWA looping is like using your house as collateral for a loan, then using that loan money to buy another house, and repeating the process to amplify your returns (and risk).
• Liquidity Buffers: To address duration risk and provide instant liquidity, platforms use aggregate vaults and liquidity buffers, allowing users to withdraw without waiting for underlying asset settlement.
• Non-KYC Access (Ex-US): Plume enables non-KYC access for non-US users by offering tokens representing economic interest and yield while maintaining AML checks at the sequencer, chain, and bridge levels. This expands the user base significantly.

Theme 3: The Global & Multi-Chain RWA Expansion

• Ethereum's Dominance (Institutional): Ethereum remains the primary choice for institutions due to its battle-tested nature and perceived credible neutrality, especially for long-duration assets.
• Multi-Chain Pivot: Many L1s/L2s are pivoting to RWAs, often driven by a desire for relevance, but some lack a clear strategy beyond "something hot and shiny."
• Global Capital Inflow: Significant RWA velocity and capital are flowing from Asia and the Middle East, where access to traditional high-yield products is limited, creating a massive opportunity outside the US.
• Centralized Frontends, Decentralized Backends: The future involves centralized platforms (e.g., Alibaba, OKX, eventually Bank of America) using decentralized RWA protocols (e.g., Plume, Morpho) in the backend to offer yield products to a broader, less crypto-native audience.

Filter for Action:

• For Investors:
  • Opportunity: Bet on RWA infrastructure and tooling (lending/borrowing protocols, insurance, core chains) rather than just holding RWA assets, as infrastructure captures fees from growing volume. Look for platforms enabling crypto-native composability and permissionless access.
  • Warning: Be wary of "hot and shiny" RWA plays from general L1s/L2s without deep RWA-specific strategies. Understand the underlying risk, yield, and duration of specific RWA products. Diversify beyond single-holder institutional products.
  • Prediction: Expect a "mad scramble" for capital in 2026 as Fed cuts drive a search for yield, potentially leading to 25-50x growth in the RWA market (to $400B-$800B).
• For Builders:
  • Opportunity: Focus on creating crypto-native RWA experiences: liquid, permissionless, composable. Develop tooling for lending, borrowing, leverage, and insurance around these assets. Build solutions that bridge traditional finance with decentralized backends, catering to both institutional and retail users globally.
  • Challenge: Address the duration mismatch for crypto users while maintaining institutional-grade security and compliance (AML/KYC where necessary). Innovate on yield generation that is less correlated with traditional interest rate cuts.
  • Market Focus: Target emerging markets and regions outside the US where access to high-yield traditional finance products is limited, as these represent a massive untapped user base.

New Podcast Alert: 2025 Year in Review: Why RWAs are Taking Off in 2026 with Chris Yin and Teddy Pornprinya of Plume
By The Rollup

As T-bill yields compress, the hunt for higher returns is pushing capital into Real World Assets (RWAs) on-chain. Chris Yin and Teddy Pornprinya of Plume unpack how crypto-native platforms are democratizing access to institutional-grade yield, setting the stage for an explosive 2026.

1. The Great Yield Migration

• "Big picture though, it comes down to two things, right? Risk and yield. And those are the two dimensions that kind of come back and forth."
• Yield Compression: With Fed rate cuts, T-bill yields are dropping from 5% to 3-3.5%. This decline makes the "risk-free" rate less appealing, forcing investors to seek higher returns elsewhere.
• CLOs Step Up: Collateralized Loan Obligations (CLOs) like the Janice Henderson AAA CLO fund offer 6-7% yield with relatively low risk and high liquidity (T+1/T+2 settlement). This attracts significant institutional capital, exemplified by a single LP depositing $500 million.
• Duration Mismatch: Higher yields often mean longer duration—the time money is locked up. Crypto users, accustomed to instant liquidity, find 3-15+ month lockups uncomfortable, a key challenge for RWA adoption.
• Private Credit's Edge: Private credit markets offer uncorrelated yields, sometimes 14-17%, less affected by Fed rate cuts. This asset class is gaining traction as a sturdy alternative for higher returns.

2. Crypto-Native RWA Mechanics

• "The biggest thing that we're doing differently is actually allowing permissionless access to these different assets."
• Permissionless Access: Plume's success, holding over 50% of RWA wallet holders, stems from making RWAs permissionless, liquid, and composable, mirroring familiar DeFi experiences.
• RWA Looping: Users can deposit RWA assets into vaults (e.g., NBasis), receive collateral tokens, and re-lend them on protocols like Morpho. This "looping" amplifies yield, allowing users to borrow at 6-7% to earn 9-10%.
• Liquidity Buffers: To mitigate duration risk, platforms use aggregate vaults with liquidity buffers. This allows users to withdraw funds instantly without waiting for the underlying RWA to settle.
• Global Reach, Local Compliance: Plume offers non-KYC access for non-US users by tokenizing economic interest and yield, while maintaining AML checks at the sequencer, chain, and bridge levels. This broadens the user base significantly.

3. Global & Multi-Chain Expansion

• "The RWA opportunity isn't just stuck in the US. There's a lot of velocity in Asia, a lot of velocity in the Middle East, a lot of velocity honestly anywhere outside of the US."
• Ethereum's Institutional Gravity: Ethereum remains the preferred base layer for institutions due to its battle-tested nature and perceived credible neutrality, especially for long-duration assets.
• Multi-Chain Scramble: Many L1s and L2s are pivoting to RWAs, often seeking relevance. However, effective strategies require more than just chasing a "hot and shiny" trend.
• Global Capital Inflow: Asia and the Middle East are driving significant RWA velocity, as these regions seek access to high-yield products often unavailable through traditional channels.
• Hybrid Architecture: The future involves centralized frontends (e.g., Alibaba, OKX, eventually traditional banks) leveraging decentralized RWA protocols in the backend. This model bridges traditional user trust with on-chain efficiency.

Key Takeaways:

• Strategic Implication: The RWA market is poised for a "nuclear" expansion in 2026, driven by declining T-bill yields and a global search for higher returns. Expect 25-50x growth, pushing total value to $400B-$800B.
• Builder/Investor Note: Focus investments on RWA infrastructure and tooling (lending, borrowing, insurance, core chains) rather than just holding RWA assets. These platforms capture fees from growing volume. Builders should prioritize crypto-native composability and permissionless access.
• The "So What?": The convergence of traditional finance's yield needs with crypto's permissionless innovation, particularly in emerging markets, will redefine capital allocation and create new financial primitives over the next 6-12 months.

Podcast Link: https://www.youtube.com/watch?v=6gE_qPIsgx0