1. Introduction
The popularity of the RWA track continues to rise, and the integration of traditional assets and crypto assets has once again become the focus of the market. However, the technical implementation of asset chain, liquidity guarantee and investment security mechanism are still the core challenges restricting the development of this track. As a heterogeneous composite architecture solution, the WAT protocol (World Asset Protocol) introduces high-quality traditional assets into the chain ecosystem through an innovative asset mapping mechanism. While solving the liquidity dilemma of traditional assets, it builds an investment infrastructure for crypto investors that combines asset security, income stability and instant liquidity, effectively bridging the value gap between traditional finance and the crypto ecosystem.
2. Core Mechanism of WAT Protocol
The innovation of the WAT protocol lies in its five core functions
1. Traditional high-quality assets on the chain:
Compliance pre-processing layer: Traditional enterprises submit asset certificates that have been legally confirmed (property rights certificates, appraisal reports, historical income statements, etc.), and licensed institutions such as JPMorgan Chase complete the authenticity audit and value assessment of the documents to form asset endorsements that comply with the SEC/FCA regulatory framework;
Digital title confirmation layer: The audited asset metadata (including cash flow model, collateral list, risk parameters) is cast into ERC 721 title confirmation NFT, and the on-chain ownership verification under the privacy protection of sensitive data is realized through zero-knowledge proof technology
Dynamic mapping layer: deploy the WAT-Mint_Smart_Contract smart contract group, mint the on-chain token symbol ATC (1 ATC = 1 USDT) of the anchored asset based on the asset confirmation NFT, and synchronize the off-chain asset audit report and financial data with the built-in cross-chain oracle in real time to ensure the compliance mirror mapping of the token value and the underlying assets.
2. ICDAO (Investment Committee DAO):
As the first on-chain RWA investment governance protocol, it adopts a five-dimensional dynamic weight model (credit qualification, professional ability, liquidity management, governance contribution, and game calibration) to build an institutional-level decision-making system, and quantifies the marginal contribution of members through a modified Shapley value algorithm to achieve RWA asset on-chain review, dynamic risk assessment, and compliance supervision. Members receive seigniorage sharing (0.3%), private placement subscription privileges, and governance optimization rights based on their weight ratios, and rely on the on-chain federated learning framework and regulatory sandbox compatible modules to ensure that the decision-making mechanism has both the rigor of a traditional investment committee and the agility of a DAO organization.
3. Real USD income on-chain:
The traditional asset parties are required to provide the real USD income of the asset, and the real USD is injected through the foundations WAT-AMM market-making mechanism, so that the assets on the chain are not only the superficial mapping symbol ATC, but also can inject real USD income and support the issuance of income tokens INC (Income Token), so that investors can not only tokenize and conveniently invest in high-quality physical assets, but also obtain the real USD income of the assets in reality, and can also obtain additional future income brought by INC tokens.
4. Additional liquidity guarantee:
In order to protect the rights and interests of investors, the WAT protocol requires the asset party to provide an additional liquidity pool to avoid liquidity shortages (the asset party must provide at least an additional 10% of the asset value in USDT to ensure liquidity transactions of ATC), and provide an additional INC token reward pool through the WAT-AMM market-making mechanism to ensure the safety and health of liquidity in all aspects, thereby ensuring and improving the investment experience.
5. RWAFi:
The WAT protocol innovatively builds an RWA+DeFi compound income engine, and achieves deep coupling of traditional asset income and on-chain composability through smart contracts: ① Building a layered income structure, the cash flow of the underlying assets and on-chain strategies such as pledge mining and liquidity certificate derivatives form a superposition effect of income; ② Creating an institutional-level liquidity pool to attract capital injection from family offices and asset management institutions, and building a dynamic balance model of capital efficiency and income stability through market maker incentive algorithms and cross-market arbitrage mechanisms. This mechanism enables investors to independently configure DeFi strategies such as leverage farming and income rights pledge while obtaining fixed income from underlying assets, so as to achieve risk-adjusted income optimization.
The WAT protocol solves the core paradox of the RWA ecosystem through heterogeneous architecture design: its five-dimensional core mechanism builds a composite protocol stack, and uses a cryptographic verification framework to achieve dual protection of traditional asset liquidity conversion and crypto investor asset security. By building a three-layer structure of physical assets-on-chain certificates-liquidity derivatives, it not only completes the standardization and deconstruction of non-standard assets, but also retains the composability advantages of DeFi, fundamentally bridging the structural contradiction between the liquidity of traditional financial assets and the investment logic of the crypto market.
3. Comparison between WAT protocol and other types of projects
As can be seen from the above table, the WAT protocol provides real returns and liquidity support while putting assets on the chain, filling the gaps in the RWA project and DeFi protocol, making it more competitive in the market.
4. Application scenarios of WAT protocol
High-quality assets:
High-quality assets with stable cash flow income, such as equity, gold, energy, and real estate funds, can be put on the chain through the WAT protocol to improve transparency and provide high-quality investment targets for the Crypto market.
Traditional financial institutions:
Banks and fund companies can use the WAT protocol to implement the matching issuance of fund bonds and enhance financial liquidity.
Crypto Investors:
Institutional and individual investors can obtain safer and more stable investment opportunities through the WAT protocol without having to worry about liquidity risks. In addition to conveniently investing in high-quality assets, they can also obtain guaranteed US dollar returns and additional future returns from ecological tokens.
WEB2 Investors:
By carrying traditional high-quality assets, the understanding and trust of WEB2 users will be resolved. Through the convenient operation of RWA tokenization, traditional investors and funds will enter in large numbers to complete investment and financial management.
DeFi Ecosystem:
The WAT protocol is compatible with existing DeFi protocols, providing a richer range of asset types for decentralized finance. It breaks the circle curse for the DeFi ecosystem, introduces financial laws, value support and funds, solves the problem of passing the parcel in DeFi, and provides compound income product services for WAT ecosystem investors.
5. Core mathematical modeling of WAT protocol mechanism
1. Traditional asset on-chain model
After traditional assets are put on the chain, their mapping value on the chain can be expressed as:
in:
If R = 1, it means that the assets are fully on-chain. If R < 1, some assets may not be fully on-chain due to compliance or liquidity factors.
2. Real income on-chain model
The WAT protocol requires traditional asset parties to map real US dollar returns to the chain to ensure the stability of investment. The return calculation is as follows:
in:
S: income chain guarantee coefficient (0 ≤S≤ 1), reflecting the transparency and cashability of income
When S = 1, it means that all income is fully mapped to the chain. If S < 1, part of the income is not on the chain.
3. Additional Liquidity Support Model
The WAT protocol provides additional liquidity pools to ensure that investors can trade at any time without liquidity shortages. The size of the liquidity pool can be defined as:
in:
L: The size of the total liquidity pool (including the value of the asset and the additional USDT provided by the asset)
α, β: Liquidity weight coefficient (controls the liquidity contribution ratio of traditional assets and Crypto assets)
When L is large enough, investors can trade without obstacles, but when L is too small, the WAT protocol may need additional liquidity support mechanisms.
4. Calculation of comprehensive income
The comprehensive income of investors in the WAT protocol includes the real income of traditional assets and DeFi income (such as staking, lending, etc.). The new income calculation is as follows:
in:
in:
θ: DeFi income applicability rate (0 ≤θ≤ 1), indicating the proportion of assets that can be used for DeFi investment
The calculation of investors comprehensive returns includes the real US dollar returns of assets + future returns of tokens + DeFi returns, and investors funds have more abundant and flexible ways to increase their value.
6. WAT protocol asset management scale
At present, the WAT agreement has signed assets worth 270 million US dollars, including: Aupera visual chip research and development company, JoHome real estate fund company, Middle East sovereign fund, Hong Kong Harish gold supervision warehouse, Cambodia quartz sand mine, Turkmenistan natural gas, etc. And continue to explore and sign contracts to introduce more high-quality physical assets.
It is expected that asset tokenization transactions and TGE transactions will be launched in Q2 2025!
7. Conclusion
The WAT protocol builds the RWA value exchange protocol layer through a heterogeneous multi-chain architecture. Its technological breakthroughs are reflected in: ① Integrating a dynamic pricing mechanism and a zero-knowledge verification framework to achieve efficient liquidity conversion of traditional assets and verifiability of on-chain returns; ② Adopting a layered smart contract group (compliance verification module + risk isolation pool + liquidity derivative engine), under a compliance framework audited by a third party, to build a configuration plan with optimized risk-return ratio for crypto investors. Industry observation data shows that its protocol layer design has shown the synergy effect of connecting traditional financial infrastructure and the DeFi ecosystem, providing key technical support for the standardization process of the RWA market.
