Author: Brian, W Labs

(Continued from Part 1) "The RWA Storm in Hong Kong (Part 1): From Fanaticism to Restructuring, An Analysis of the Nine Major Factions"

7. AlloyX – A “Hybrid Aggregator” Connecting DeFi Liquidity and Real-World Assets

In the grand narrative of RWA in Hong Kong, if HashKey and OSL are building “asset-heavy” infrastructure similar to Nasdaq or bank vaults, then AlloyX represents another agile force in the RWA market – a “ DeFi native aggregator ”.

As a Web3 fintech company originating from San Francisco, USA, and later wholly acquired by Hong Kong-listed brokerage Solowin Holdings (NASDAQ: SWIN) , AlloyX plays a unique role as a " CeDeFi (Centralized and Decentralized Hybrid Finance) connector " in the Hong Kong RWA landscape. Instead of directly holding heavy physical assets, it uses smart contract technology to "package" credit assets scattered across different chains and protocols into highly liquid financial products, directly delivering them to investors in the crypto world.

AlloyX's business logic is completely different from traditional exchanges. It is essentially an Aggregator Protocol for RWA assets .

In the early RWA market, assets were fragmented: investors wanting to buy US Treasury bonds might have to go to one platform, while those wanting to invest in private lending might have to go to another, with extremely high barriers to entry. AlloyX addresses this pain point. It has built a modular "Vault" system that can access assets from multiple upstream lending protocols such as Centrifuge, Goldfinch, and Credix. By standardizing these assets into a unified tokenized product, AlloyX allows users to easily allocate stablecoins like USDC to real-world lending assets, much like depositing money into a money market fund.

With its formal acquisition by Solowin Holdings in 2025, AlloyX completed a remarkable transformation from a "pure DeFi protocol" to a "compliant fintech flagship." Now, AlloyX is more like a tentacle of Solowin, a traditional brokerage firm, extending into the Web3 world. Leveraging Hong Kong's compliance license advantages, it distributes traditional securities, funds, and other assets to global investors in the form of tokens through AlloyX's technological channels, achieving true " asset ownership confirmation in the traditional world and liquidity release in the blockchain world ."

In the highly competitive Hong Kong market, AlloyX's competitive advantage lies primarily in the combination of its unique shareholder background and technological architecture.

First, the endorsement and resource injection from a listed company is its biggest differentiating advantage. As a wholly-owned subsidiary of Nasdaq-listed Solowin, AlloyX transcends the compliance dilemmas faced by ordinary DeFi projects. It can directly utilize the Type 1, 4, and 9 licenses held by its parent company from the Hong Kong Securities and Futures Commission (SFC) to legally design and distribute tokenized products involving securities. This "front-end DeFi experience + back-end licensed brokerage risk control" model perfectly aligns with Hong Kong's CeDeFi regulatory direction.

Secondly, AlloyX possesses exceptional composability capabilities. Unlike single-asset issuers, AlloyX excels at using algorithms to mix and package RWA assets of varying risk levels (such as low-risk US Treasury bonds and high-risk trade finance) to create on-chain products similar to structured notes. This capability allows institutional investors to customize their RWA portfolios on-chain according to their risk appetite, significantly enriching profit strategies in the RWA market.

AlloyX's business practices mainly focus on two dimensions: "asset aggregation" and "compliant issuance." The following are its most representative business cases:

Looking back at AlloyX's development path, we can clearly see that it doesn't pursue a large and comprehensive platform traffic, but rather focuses on the refined operation of the asset side. Through its acquisition by Solowin, AlloyX has effectively become a "technology engine" for traditional financial institutions' digital transformation of RWA. For the market, AlloyX has proven that RWA is not just a game for giants; technology-based protocols, through deep integration with licensed institutions, can also find a core ecosystem within the high walls of compliance.

8. Asseto – An RWA "asset packaging factory" designed specifically for institutions.

In Hong Kong's RWA industry chain, Asseto plays a crucial role as the "source of assets." It is located at the very top of the industry chain, directly connecting with the real economy.

As the flagship RWA infrastructure project strategically invested in by HashKey Group, Asseto boasts a strong "pedigree." Instead of directly engaging with retail investors, it focuses on solving the most challenging "first mile" problem in RWA: how to transform a building or a fund into a compliant token through legal structure, technical standards, and compliance processes?

Asseto's business model is highly vertical and has high barriers to entry, primarily serving TradFi giants with billions of dollars in assets.

• RWA Asset Issuance Gateway: Asseto provides a standardized technology stack that allows institutions to "one-click on-chain" assets such as cash management products, real estate, and private lending. It not only provides smart contracts but, more importantly, offers "legal packaging" services to ensure that on-chain tokens have a genuine claim to the underlying assets under Hong Kong law.

• The "asset conveyor" of the HashKey ecosystem: As a portfolio company of HashKey, Asseto is an important source of potential RWA assets for the HashKey Exchange. Asseto is responsible for organizing the assets off-chain (cleaning, confirming ownership, and tokenizing), and then distributing them to secondary market investors through HashKey's compliant channels.

• Asseto, a "situational partner" in the stablecoin sandbox, is working closely with several institutions applying for stablecoin licenses in Hong Kong. They are committed to using RWA assets as reserve assets for stablecoins and exploring advanced approaches such as "issuing stablecoins using tokenized government bonds/cash".

Asseto's core advantage in the Hong Kong market lies in the top-tier resources afforded by its shareholder structure.

• HashKey's technical and channel support: HashKey not only provides funding but also opens up the HashKey Chain (L2 public chain) to Asseto as its preferred issuance platform. This means that assets issued on Asseto inherently have access to Hong Kong's largest compliant liquidity outlet.

• Asset injection from DL Holdings: DL Holdings (1709.HK), a Hong Kong Main Board listed company, not only invested in Asseto but also signed a strategic agreement to tokenize its managed family office assets (such as commercial real estate and fund shares) through Asseto. This solves the most troublesome "asset shortage" problem for the RWA project—Asseto started with high-quality assets from a listed company.

Asseto's case studies are highly "customized" for institutions, primarily focusing on real estate and cash management:

Asseto is the "asset alchemist" of the Hong Kong RWA market. Instead of directly targeting retail investors, it operates behind the scenes, using sophisticated legal and technical tools to transform the massive and cumbersome assets of traditional financial institutions into coins suitable for circulation in the Web3 world.

9. FireX – An “industrial-grade” RWA platform for unlocking computing power liquidity.

In the Hong Kong RWA market, most platforms deal with "paper assets" (such as bonds and equities), while FireX focuses on "productive assets".

FireX is an institutional-grade RWA trading platform whose core narrative is "financializing Bitcoin's source of power (computing power)." Through partnerships with top infrastructure providers like Bitmain, it encapsulates data centers and mining machines located globally (in the US, Canada, Kazakhstan, etc.) into on-chain tradable RWA tokens. For investors, purchasing FireX's RWA products is essentially buying the "right to future cash flow" from a running supercomputer.

FireX's business logic is very vertical, solving the mismatch problem between the traditional mining industry's "poor liquidity" and Web3 funds' "lack of stable real returns":

• Assetization of computing power: FireX transforms the "S21e Hyd mining machine" and its generated computing power (288 TH/s), which originally belonged only to the physical world, into on-chain assets. This means that users do not need to build their own mining farms or maintain the machines to hold computing power and earn Bitcoin mining rewards.

• FireX, a global energy arbitrage network, is more than just a trading platform; it's backed by a vast network of physical infrastructure. It owns or partners with over 30 data centers in locations such as Texas, Quebec, and Ethiopia. Essentially, it's engaged in global energy arbitrage—finding the cheapest electricity, converting it into Bitcoin, and then distributing the profits through RWA.

• Entry point for diversified asset allocation: In addition to its core Bitcoin hash power, FireX's vision also includes global high-quality stocks (such as NVDA, MSFT), pre-IPO equity, and the RWA-ification of AI computing power assets. It attempts to create a comprehensive asset allocation basket "covering both the digital and physical worlds".

Unlike pure software protocols, FireX's competitive advantage is built on a heavy foundation of "hardware" and "ecosystem relationships":

• Verifiable Entity Scale: FireX currently has over 5,000 supercomputing servers deployed, managing over 1,000 PH/s of computing power, with on-chain assets valued at over $20 million. This tangible entity scale provides RWA with the most fundamental credit backing—ownership belongs to the customer, and the assets are genuinely in operation.

• Top-tier ecosystem: According to disclosures, FireX's partner network includes mining machine giant BITMAIN, mining pool Antpool, and leading institutions such as Binance, Coinbase, and Tether. This resource integration capability, spanning the entire industry chain from "mining machine production to mining, exchanges, and stablecoins," ensures the stability of its asset supply and low-cost advantages (such as zero machine space fees and zero service fees).

• High-yield product design: During a Bitcoin bull market, FireX's RWA (Return on Investment) demonstrates extremely high return elasticity. According to calculations for its S21e Hyd product, under the optimistic assumption that Bitcoin's price reaches $150,000, the ROI (Return on Investment) could even approach 100%. This is significantly more attractive than traditional government bond RWAs.

FireX's business is highly focused on "financialization of computing power" and "global asset allocation":

FireX is a "hardcore industrial" player in the RWA (Real-Time Web Application) field. It goes beyond the simple "old wine in new bottles" model of traditional financial assets (such as government bonds), and instead provides the Web3 world with a basic revenue layer supported by real machine noise and electricity consumption by "securitizing and packaging" Bitcoin computing power, a native digital asset.

Bipolar Narrative: A Deep Comparison of the Hong Kong and US RWA Markets

If 2024 was the year of proof-of-concept for RWA, then 2025 will be the year that the "bipolarization" of the global RWA market landscape takes shape. In the global RWA landscape, the United States and Hong Kong represent two completely different, yet mirror-like, evolutionary paths.

The United States, relying on its native DeFi innovation and dollar hegemony, has become a " super factory " for RWA assets; while Hong Kong, relying on its unique institutional advantages and geographical location, has become a " super boutique " and "distribution hub" for RWA assets.

1. Regulatory Philosophy: "Enforcement-Style Tolerance" vs. "Sandbox-Style Access"

The United States: The Law of the Jungle from the Bottom Up

The RWA market in the United States has grown wildly in the cracks of regulation. Although the regulatory environment softened after the Trump administration took office in 2025, its core logic remains the game between " regulation by enforcement " and " DeFi first ".

• Characteristics: US projects (such as Ondo and Centrifuge) often start as DAOs or decentralized protocols, pursuing scale and technological innovation first, and then using complex legal structures (such as SPVs for offshore segregation) to circumvent the SEC's securities determination.

• Advantages: Extremely rapid innovation; asset portfolios can be created through smart contracts without the need for license approvals; it is easy to create phenomenal products with strong economies of scale, such as BlackRock BUIDL.

• Disadvantages: The law is ambiguous, and there are extremely high compliance risks once cross-border distribution or non-qualified investors (retail) are involved.

Hong Kong: Top-down Design

Hong Kong has taken a completely opposite approach – “ Licensing Regime ”. From HashKey obtaining its exchange license to Star Road relying on licenses 1, 4, and 9 held by Fosun Wealth, every step of Hong Kong RWA’s development has been within the sights of the SFC and HKMA.

• Features: "No license, no RWA". All projects (such as OSL, HashKey) must operate within the Project Ensemble sandbox or existing securities framework. Regulators are not only judges, but also "product managers" (such as guiding the design of tokenized deposits).

• Advantages: Extremely high certainty. Once the product is approved (such as China Asset Management's tokenized product), it can legally connect to the banking system and retail funds, possessing the trust endorsement of traditional financial institutions.

• Disadvantages: The entry barriers and compliance costs are extremely high (over $800,000 per project), which stifles grassroots innovation and results in market participants being mostly "elite" companies or "conglomerates".

2. Market Structure: "Fundamentalist DeFi" vs. "Traditional Consortiums"

The United States: Home Ground for DeFi Native Capital

The US RWA market structure is " DeFi backward compatible with TradFi ". Major funding sources include on-chain USDC/USDT whales, DAO treasuries, and crypto hedge funds. Project teams are typically led by tech geeks who disdain cumbersome offline processes and focus on converting everything (including government bonds) into ERC-20 tokens, then placing them on Uniswap or Aave for collateralized lending.

• Typical profile: Protocols like MakerDAO or Compound use the RWA module to purchase US Treasury bonds to provide yield support for stablecoins.

Hong Kong: Digital Transformation of Traditional Conglomerates

Hong Kong's RWA market structure is " TradFi adapted to Web3 ". The main sources of funding are family offices, high-net-worth individuals (HNWIs), and corporate treasuries seeking diversified wealth management. Project teams often have strong industry backgrounds (such as the mining computing power resources behind FireX, Fosun Industrial Capital behind Star Road, and real estate funds behind Asseto).

• A typical example is Star Road Technology's "Web5" strategy—utilizing Web3 technology to serve existing Web2 customers. Hong Kong's RWA, on the other hand, isn't aiming to create new assets, but rather to make "old money" feel both trendy and secure.

3. Asset and Project Spectrum: Standardized Government Bonds vs. Non-Standard Structured Assets

The United States: Unilateral Hegemony over Treasury Bonds

In the US RWA market, approximately 80% of TVL ( total value of liquidated assets) is concentrated in "tokenized US Treasury bonds ." This is the most standard, liquid, and readily accepted collateral by DeFi protocols. Most US RWA projects focus on low transaction fees and T+0 settlement.

Hong Kong: A Testing Ground for Diversified Assets

Limited by its market size, Hong Kong cannot compete with the United States in the pure US Treasury bond market, and has therefore turned to " differentiation " and " physicalization ".

• Physical and Industrial RWA: FireX packages Bitcoin computing power and energy into RWA, a unique “hardcore industrial” innovation in Hong Kong that leverages Asia’s advantages in the global mining supply chain.

• Real Estate & Alternative Assets: Mantra (headquartered in Dubai but with a strong presence in Asia) and Asseto focus on structuring non-standard assets such as real estate and private credit. Hong Kong is better at handling complex offline title confirmations (such as the Fosun Group assets handled by Star Road).

• Infrastructureization: OSL and HashKey are not just about assets, but also about building a complete infrastructure of "exchange + custody + SaaS", which reflects Hong Kong's service-oriented nature as a financial center.

RWA's recommendations regarding mainland assets and enterprises investing in Hong Kong

Given the recent tightening of regulations, the window of opportunity for companies with mainland China backgrounds (shareholders, teams, operating entities) to issue RWAs through the "mainland assets/team + Hong Kong shell" model has essentially closed. This is not merely a matter of increased compliance difficulty, but rather a shift in nature from a "gray area" to a "high-risk criminal offense."

On November 28, 2025, a meeting of 13 departments, including the People's Bank of China, explicitly stated that stablecoins are virtual currencies and lack legal tender status, and related businesses constitute illegal financial activities. This essentially severed RWA's core "payment and settlement" function. RWA's revenue is usually settled in stablecoins (USDT/USDC), which is defined as illegal. On December 5, 2025, seven major industry associations issued risk warnings, explicitly listing RWA investment and financing as illegal activities, constituting illegal public financing, for the first time.

Under this policy environment, mainland companies face three obstacles in issuing RWAs in Hong Kong:

A. The "long arm" extension of legal jurisdiction (penetrating supervision)

The previous operating model involved setting up an SPV (Special Purpose Vehicle) in Hong Kong, while the mainland parent company only provided technical support or consulting services. This "barrier" is now ineffective.

• Personal jurisdiction: Even if the issuer is in Hong Kong, if the actual controller, senior executives or technical team are in mainland China, they will be considered to be "cooperating with illegal financial activities" under the new regulations.

• Aiding and abetting crimes: The December policy specifically emphasized cracking down on the entire industry chain. Mainland entities (and individuals) that provide technical development, marketing, payment settlement, or even market-making services for overseas RWA projects may be guilty of illegal business operations or aiding and abetting cybercrime under the Criminal Law.

B. "Supply interruption" on the asset side

The Hong Kong RWA market is most eager for high-quality physical assets from mainland China (such as photovoltaic power plant revenue rights and commercial real estate rentals).

• Assets outbound are locked: Since RWA is defined as an illegal financial activity, packaging domestic assets and using RWA to finance outbound financing is suspected of illegal foreign exchange trading and tax evasion.

• The dilemma of ownership confirmation: Domestic laws do not recognize the ownership of domestic assets by on-chain tokens. If a project defaults, and overseas investors use the tokens to sue in mainland courts to demand the execution of assets, the courts will not support such a claim (due to violations of public order and good morals and mandatory provisions).

C. "Blockade" on the funding side

• Funds cannot be returned to the mainland for use in the real economy, even if you raise USDT/USDC in Hong Kong. (Because banks will refuse to accept funds for "virtual currency related business").

• Marketing red lines targeting mainland Chinese investors: Marketing to Chinese citizens is strictly prohibited. If your RWA Product Presentation (PPM) has a Chinese version, or if your roadshow activities involve mainland Chinese IP addresses, it will directly trigger regulatory red lines.

According to market feedback, the Hong Kong RWA market has experienced a sharp reaction since November 28. Approximately 90% of RWA consulting projects with mainland China backgrounds have been suspended or canceled, and the share prices of Hong Kong-listed companies involved in RWA (especially those with mainland China parent companies, such as Meitu, NewFire Technology, and Boyaa Interactive) have fallen sharply.

Therefore, companies with purely mainland Chinese backgrounds (Team in China, Assets in China) that still wish to participate in RWA token issuance face extremely high risks. They may not only fail to comply with regulations but also face criminal liability. It is recommended that they abandon the RWA tokenization narrative and return to traditional ABS (asset-backed securities) or issue traditional bonds in Hong Kong.

For companies that are entirely overseas (Global Team, Global Assets), it is theoretically still feasible, but it requires separation, including physical and legal separation, for example:

• Personnel separation: The core team and private key controllers cannot be located in mainland China.

• Asset separation: The underlying assets must be overseas assets (such as US Treasury bonds or overseas real estate), and cannot be domestic assets.

• Market segmentation: Strict KYC procedures, blocking mainland China IP addresses through technical means, and no advertising or promotion on Simplified Chinese websites.

Conclusion and Outlook: Hong Kong's Path from "Frenzy" Back to "Origins"

Looking back at 2025, the Hong Kong RWA market underwent a near-brutal stress test. From the widespread attention surrounding the launch of Project Ensemble at the beginning of the year, to the frenzy of capital inflows in the middle of the year, and then to the freeze and restructuring caused by tightened regulations in mainland China at the end of the year, this process, though painful, completed a profound reshuffling of the market.

After the dust settles, the speculators who were swimming naked are eliminated, leaving behind the seven pillars we have analyzed in depth in this article:

• HashKey and OSL have upheld the bottom line of compliant transactions and custody, becoming the "water, electricity, and gas" of Hong Kong Web3;

• Star Road and Asseto have demonstrated the feasibility of traditional conglomerates using RWA to revitalize existing assets;

• FireX showcased Hong Kong's unique ability to connect physical industries (computing power/energy) with digital finance;

• Mantra and AlloyX provide the market with the necessary underlying public blockchain infrastructure and DeFi aggregated liquidity.

Looking ahead to 2026, the Hong Kong RWA market will exhibit the following three major trends:

1. The focus is shifting from "domestic circulation" to "external circulation": With the tightening of capital flows from the mainland, Hong Kong will completely abandon the shady notion of "helping mainland funds go overseas." Future growth will primarily come from "global assets, distributed in Hong Kong." This means utilizing Hong Kong's compliant channels to package US Treasury bonds, Dubai real estate (as in the Mantra case), or global computing power (as in the FireX case) and sell them to institutional investors in Southeast Asia, the Middle East, and Japan and South Korea. Hong Kong will become a true "offshore financial router."

2. The blurring of the lines between RWA and DeFi (CeDeFi): Simply "putting assets on-chain" is no longer profitable. The core of the next phase of competition is "composability." We will see more aggregators like AlloyX using tokenized funds issued by Star Road as collateral to generate stablecoins or leverage operations on-chain. Compliant CeFi assets will become the highest quality underlying "Lego bricks" for DeFi protocols.

3. Stablecoins are the ultimate battleground for RWA: all RWA transactions and settlements ultimately point to currency. With the implementation of Hong Kong's stablecoin regulations, "interest-bearing stablecoins" (stablecoins backed by RWA assets) will become the largest single RWA product. Whoever controls the issuance scenarios of RWA (such as mining revenue settlement in FireX and real estate rental distribution in Asseto) will control the minting power of Hong Kong dollar/US dollar stablecoins.

The story of RWA in Hong Kong is far from over; it has only just turned the page on its "grassroots startup" phase and entered the main chapter of "institutional competition." In this new phase, compliance is no longer a burden but the greatest asset; technology is no longer a gimmick but a vehicle for trust. Hong Kong, a city that is forever evolving through crises, is redefining itself as a financial center for the digital age.