RWA vs NWA: Business Value Comparison in the New Era

Original author:mattigags， Zee Prime Capital

Original compilation: Deep Chao TechFlow

RWA is a familiar concept in the crypto community and refers to real-world assets.

Mattigags, a researcher from Zee Prime Captial, expressed doubts about this concept. What is reality and what is unreality?

Therefore, the author mentioned another new concept: NWA (Network with Attitude), which means a network with attitude, or a network that can produce brand effects, but is not supported by similar physical assets, such as Bitcoin or Ethereum, and our See various defi, meme and consumer applications, etc.

So, corresponding to RWA, these NWA have no value without physical support? Reality and unreality, what is the fundamental factor that determines whether something is valuable?

Let’s take a look at the insights from the original article.

When the Internet was born, it wasnt real to people. There are many interesting anecdotes from the 1990s to the beginning of this century. Bill Gates was asked in an interview with David Letterman"Do you remember the radio/recorder/magazine?", and the famous"Why the internet won’t be reborn"article.

Without a rich imagination, it would have been difficult to understand digital technology before it made breakthroughs. These things dont look real, especially when price momentum is exploited by skeptics, and we instinctively fall into the trap of talking about what is real and what isnt real.

Real things tend to be things we are familiar with: things we have seen before, things that are easier to predict, etc. When times are uncertain, our brains look for recognizable patterns to anchor “fundamentals.” Therefore, we finally arrive at"real world assets"(RWA) and"non-real world assets"The false dichotomy.

What does it mean to be real? predictable? Tangible? Is it cash flow? Or does it refer to existing assets, existing on the chain? To me, it just means shoehorning old models into new technology paradigms amid the destruction of the last bull market. Because we’re afraid of trying harder, we hide behind old, familiar patterns.

I remember an anecdote from the late 90s where people said"There will be more than 1,000 TV channels on the Internet". Now, however, there are millions of channels—each of which is a potential “media company”—and a whole new industry of content creators has emerged. Today, the industrys valuation has exceeded US$25 billion, and the global online entertainment market has reached US$367 billion, and is expected to exceed one trillion US dollars by 2028.

Traditional information distribution channels can no longer meet the demand, and few people can foresee this. With the emergence of cryptocurrencies, we are not only splitting the traditional financial rails, but also the definition of (consumer) products. In a new world where new user personas are emerging, old models no longer work.

product culture fit

As I walked down Savile Row in London, I started thinking about how ready-to-wear fashion faced resistance and skepticism when it was introduced in the mid-19th century. The traditional way of getting clothes was customization and tailor-made, so people at the time couldnt understand"One size fits many"。

The tailoring industry sees the emergence of new trends as a threat (rightly so). There was skepticism about the quality, technological degradation and innovation of fashions that could suddenly be mass-produced. Others worry that cheap off-the-rack clothing represents a lack of status.

The fact that ready-made clothing was cheaper and could be produced industrially sparked a huge cultural change. As urban life became busier and faster-paced, the convenience of ready-made clothing became increasingly attractive, and with the advent of mass marketing, status found its way into the market.

What is considered normal today was once bizarre, and what is considered practical today was once considered impractical. But that doesn’t mean that every bizarre thing will become normal, or that every unrealistic thing will become practical. What it shows is that when it comes to consumer goods, culture can change quickly given the right conditions.

The ready-to-wear concept brings scalability, allowing global fashion brands to emerge. The emergence of this new concept of culture was followed by a large-scale consumption shift.

In the 2020s, anything can become a consumer product. People are willing to spend money on nonsense, gimmicks, and things they will never use. They put a hefty price tag on sneakers that cost no more than $100 to produce. How can this thin layer of illusory packaging turn a product into a luxury product?

The entire marketing industry is based on creating illusions. People dont know that different brands have their own products. People simply dont know that clothes of different brands are produced in the same factory and have different labels when they leave the warehouse. The invention of brands is the reinvention of mass illusions. However, no one questions whether the brand is authentic.

Brands do have cash flow. However, their existence is not based on basic laws of physics, but is a social construction based on consumer perceptions, whose needs are created by buzzwords and narratives. These brands sell an expectation of what to feel or look like/who they are when consuming their products.

So, what is the essential difference between an influential token or a picture of a boring ape and these branded products? Both are selling expectations for something. Why is one premium more real than another? Is it because of the dichotomy between digital and physical? Or is it just because its a new product format?

Are tokens a new form of consumer good that is enacting a massive cultural shift like the ready-to-wear era of the 19th century?

As a branded digital network, the NWA Network (Networks With Attitude) is emerging and its participants become loyal consumers. Best of all, consumers can be beneficiaries too. Consumers becoming stakeholders is a very attractive proposition in the next era of business.

But how do you build a brand around the web? lets talk

NWA. (Network with Attitude)

Bitcoin is often compared to a religion. It is basically a piece of code running to produce a product, and then there is an organization willing to buy and promote it. Bitcoin’s clever design and fundamental properties can be copied or forked, but its product and organization cannot. Its moat relies on its brand being digital gold.

What are the essential qualities of gold? It was scarce, so it became a standardized brand—a practical mass fantasy that solved a problem. The same goes for Bitcoin. It also provides a better user experience. Its easier to acquire, track, store, trade, and more.

It’s hard to imagine that Bitcoin won’t eventually become a greater brand than gold. What it requires is the persistence of creating buzzwords, repackaging narratives and time. Today, Bitcoin is a global super brand worth $73 billion, but this is still far from the potential of golds lower market cap (todays $130 billion).

Bitcoin is no less real than gold. In fact, Bitcoin is arguably more real than gold because it only exists in a world of 1s and 0s—everyone can see it in its entirety, which makes it easier to coordinate with those around it. This is the useful mass illusion—an anchor around which society can coordinate.

Why attach its original position value in the digital logical world (digital world = logical world) to an item in the physical world and then track it in the digital world? - Gold has a poor user experience because it has redundant steps. Fundamentally, Bitcoin is better positioned to win this marketing war.

There are many more NWAs like this. Take Ethereum for example. Contrary to popular belief, Ethereum does not necessarily compete with Bitcoin in the long run. While Ethereum can be considered a store of value, a more promising statement is that it is the fuel for the world’s computers. Ethereum is the new internet, where you can own things directly.

Owning Ethereum is equivalent to betting on the explicit consumption of Veblens commodity, block space. Anyone can launch their own NWA on Ethereum (Translation: refers to issuing an asset and forming a network with culture and beliefs). These NWAs can be DeFi products, memecoins, or ultimately consumer applications.

Let me reiterate: the beauty of NWAs is that users can become stakeholders. Some say it’s impractical, which reminds me of the perception people have of ready-to-wear. It’s increasingly the case that tokens are actually a practical fulcrum of Bitcoin world culture. It provides a great product-culture fit that allows new markets to emerge.

Token as product

What makes an asset what it is? As far as finance is concerned, the only fundamental thing is the flow of money. Because people are willing to pay for sugar water (which is mostly a net negative for their health), the stock and value of the company that sells sugar water is real.

Or is it real because they poured a liquid down their throats? Because it is a canned source of energy (calories)? What can one do without it? All of these questions are valid, but the only thing that matters is that people are willing to spend money to buy it. Thats the only thing thats going to sustain it or make it financially viable.

Soft currency (fiat currency) itself is not real - it is simply backed by consumer trust. In any case, we have reached a consensus that what is bought with soft money makes it real, ignoring that reality is nothing but a symbol bought by symbolic means.

The reality is that the only thing that matters is consumption - goods and services, not the means of exchange. Consumption in a fiat economy is as real as consumption in a barter economy. Consumption in a token economy is as real as consumption in a fiat economy. In this sense, cryptocurrencies, like any good thing, are old concepts repackaged into new trends.

Take random tokens like Dogecoin. It basically does nothing but trade. But trading and owning it is a form of consumption. Dogecoin is like sugar water, it may be a net negative for your health (as the owner experiences its volatility), but if someone consumes it, what is the essential difference between it and sugar water?

In fact, Coca-Cola is more real than Dogecoin because of how powerful this memo is. Coca-Cola has a longer heritage and its logo is everywhere. Some people don’t even know why they order a Coke. But if Coke wasnt available, they would drink something else and their lives wouldnt change.

On the Internet, users become"TV channel". With cryptocurrencies,"Coke Company Stock"and sugar water become a product.

The digitalization of the world has led to hypermonetization and hyperfinancialization. We have turned the world into a reality show as we live-stream our mass delusions. This is the true metaverse; a 24/7 casino where human suffering such as war, GDP, and inflation become spectacles.

Serious political issues became entertainment, and entertainment became politicized. This is what happens when the cost of distributing information is close to zero, and monetization is predicated on people’s ability to pump dopamine from screens. Noise is priced as signal because noise has become the product.

With cryptocurrencies, we go the extra mile. Likewise, everyone can be a media outlet, and everyone can be a stakeholder of a specific product. The thrill of watching numbers rise and fall will become the product, the new addiction. Tokenization is the path of least resistance to getting more dopamine.

Numbers in the digital world have become more important than the physical goods they represent. This is similar to Bitcoin versus gold. Bitcoin is superior because it is native to the digital world. Dopamine is cheaper to produce, distribute and consume in the Bitworld.

This is also consistent with"Culture is the product, everything else is auxiliary"theory. Internet Attitude is the culture of tokenization and a means to promote the continuous reversal of consumer preferences. Maybe, one day there will be cash flow.

Above I gave an example of Dogecoin, which is a primitive token, it just shows the functionality of the token, not the best token. Its just like products, most of them are gimmicks and have no real value to consumers. But fundamentally, value depends entirely on the consumers perspective.

Utility is futility, liquidity is the future

In an information-rich world, credibility is the scarcest resource. Thanks to blockchain, tokens will become our credibility machines. They will be a source of provenance and authenticity, they will be a source of belonging, they will be a platform for the creation of new brands and new buzzwords. Without credible authenticity, there is no brand.

Culture will realign around tokens as a more appropriate means of generating, transferring, and signaling value. This is a better standard for a world where most information transfer occurs digitally. Tokens enable direct, real cultural ownership. It’s not just about entertaining yourself to death.

People are trying to create new fan and loyalty models based on tokens. Ultimately, we are talking about the transition from UGC to UGP. The cases of VitaDAO and HairDAO illustrate communities with consistent goals driven by tokens, and there will be more similar cases in the future.

The tokenization of the world will not come from the top down, but from the bottom up. It won’t start with tokenized treasury and real estate. It begins with a cultural shift as people use tokens for commercial and financial activities, forming online tribes that produce, market, consume and exploit themselves.

Now imagine David Letterman asking"Do you have any impressions of limited liability companies?"

Of course there is. But does this mean that, in a rapidly digitizing society, there cannot be better ways to create microeconomic units? Does the old model still make sense? Now that it’s possible to build networks with digitally native integrity, why can’t we do the same? Isnt this a better way? Why not use tokens?

Letterman is at it again,"Do you remember the dollar?"

Of course you remember, but you can do so much more with stablecoins. The proliferation of stablecoins is driven by consumer preference, not governments printing dollars on-chain.

Things on the Internet want to move freely, but also have natural, tokenized boundaries. Tokens will open markets for culture. Tokens bring liquidity to places never seen before and enable a smooth network experience that creates new user personas. The liquidity guidance pool becomes the culture guidance pool.

Token is"Internet attitude"(Networks Wit Attitude) - they are new world assets, digital brands and novel business models. Real world assets are not as important as we currently believe, and stablecoins prove this as they are the springboard from the real world into the new world.

The more something claims to be true, the more irrelevant it becomes. Tokens are a bottom-up business revolution, not a top-down financial reform.

Thanks to long_solitude, Shaun, Xen, Mable, and Luffistotle for their helpful feedback.