How Plume Network Brings Real Yield to RWA Tokenization

In this episode, we have an in-depth conversation with Chris Yin, co-founder and CEO of Plume Network, discussing how Plume is tokenizing real-world assets (RWAs) through its unique RWAfi platform. Chris provides detailed insights into the challenges and opportunities of tokenizing real-world assets, and explains how Plume is combining traditional finance with crypto-native principles to drive the development of RWAfi. He also shares the future prospects of Plume within the decentralized finance (DeFi) space.

The audio transcription was generated by GPT, so there may be some errors. Please listen to the full podcast:

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Introduction to Plume Network & RWAfi

Ehan: Welcome to the WuBlockchain Podcast. Today, we are excited to have Chris Yin, the founder and CEO of Plume Network, join us. Chris, welcome. Please introduce yourself and Plume.

Chris: Thanks for having me. I’m Chris, one of the co-founders and CEO of Plume. We build a blockchain, a network, and an ecosystem specifically focused on RWAs (Real-World Assets) to bring forward a new vision for RWAs that we call RWAfi.

Just a bit of background: we’ve been working on this for a little over a year now. There are three co-founders, and we started this project together. Before this, I was a founder. I sold my first company, we took my second company public, and for the third company, we raised $50 million, and it continues to exist today. I’ve known my co-founders for a while, and we explored several ideas together. Eventually, we got really excited about the potential of RWAs and doing something different — focusing on RWAfi, which is about making these RWAs actually useful for crypto people by bringing real yields and real use cases on-chain.

Currently, we have over 180 projects building on Plume. We’ve got over $1 billion worth of assets deploying on Plume, with several hundred million more committed to come on-chain as well.

Additionally, we recently concluded a two-month test campaign where we had over 3.75 million active wallets performing more than 270 million transactions on-chain during the first two months of testing. So, long story short, it’s been great, and there’s a lot more coming. I’m excited to share more and tell you all about what we’re doing on Plume today.

How Plume Leverages Key Partnerships for RWA and Data Availability

Ehan: Is there any notable partnerships Plume has formed now?

Chris: Yeah, we’ve done many different partnerships. You know, we think of Plume as an open and neutral ecosystem, and we like to work with many different players. In a few areas, we work very closely with the Arbitrum team on enabling and running our chain within the ecosystem. Since we’re an EVM chain, we collaborate closely with Arbitrum on that.

Additionally, we work very closely with Celestia for data availability. Our data availability layer is powered by Celestia, helping to keep transaction fees low and ensuring a great user experience.

And of course, there are many other partnerships with various RWA protocols as well, including protocols like Centrifuge. One of our investors is one of the founders of Centrifuge. We also work with teams like RWA.xyz. So, we’ve established many different partnerships across both RWA projects and infrastructure projects. There’s a lot happening on that front.

Challenges with Traditional RWAs and Plume’s Approach

Ehan: And can you explain what Real-World Asset Finance (RWAfi) is and how it integrates with DeFi principles?

Chris: Yeah, of course. So, zooming out for a second, RWAs have historically been, in our view, very boring, static, and not something most people in the crypto space would normally use.

Our team comes from different backgrounds. For example, my co-founder Teddy comes from Coinbase and was at BMV Chain. Eugene comes from Robinhood and crypto platforms like dYdX, and I’ve been a founder and a VC for many years. We approached this market from the perspective of crypto users, as crypto-native people. In contrast, many existing RWA projects are built on traditional finance principles.

The problem we’ve seen with previous RWA projects is that they didn’t generate much volume or attention because they were created for a traditional finance (TradFi) audience. However, the on-chain audience is primarily crypto-native, and the products and experiences they seek are quite different from what TradFi-oriented products offer.

We approached it from the perspective of building something that crypto people want, which means real yields and real use cases. We designed the product and the business around making RWAs more useful for crypto-native users. That’s what we call RWAfi. The key principles of crypto today — liquidity, composability, and permissionless environments — are crucial. In DeFi, you own your assets, you can move them freely, and you can use them as collateral. You can engage in various strategies like rehypothecation or looping because the assets are programmable and open.

We’re applying these same principles to RWAs, meaning users should be able to enter the ecosystem, hold a token that represents something real, and start earning stable, secure yields — potentially in the range of 5%, 10%, 15%, or even 20%. Additionally, these assets should remain liquid, so if you want to sell or swap them, you can do so at any time without permission.

The second key point is making these assets composable across the DeFi ecosystem. If you want to swap an RWA for something else, you can go to a decentralized exchange (Dex) and trade it. If you want to use it as collateral for a loan, you can. While earning yield, you can also engage in other DeFi strategies, such as taking leverage positions or speculating on the price of other assets.

So, the idea behind RWAfi is not just bringing RWAs on-chain but combining the traditional and crypto-native worlds, following what users are already doing. People are already using RWAs and crypto assets together, often without realizing it. The biggest example of a real-world asset being used in the crypto world is stablecoins. Stablecoins are already here, and people use them for everything.

The issue is that many RWA projects don’t understand how to create user experiences like stablecoins, which are easy to use and cater to crypto-native people. When you build products with those users in mind, you unlock a tremendous amount of growth and potential. We aim to bring real-world products to people who are focused on earning stable yields and at the same time, allow them to get token exposure.

If the markets are up, users can move into more speculative assets. If things aren’t going well, they can shift to yield-bearing assets. They can even use yield-bearing assets as collateral for speculative trades if they want. The goal is to combine these two worlds and provide users with the flexibility to do what they’re already doing — mixing real-world assets with crypto.

Innovations in Tokenized Real-World Assets (RWAfi)

Ehan: So, what unique opportunities does RWAfi present that traditional DeFi platforms don’t offer?

Chris: The main opportunity comes down to two things, really. First, real yield. DeFi products today tend to focus on what we call “endogenous yield,” which means earning and passing yields within a closed-loop system. This is why DeFi yields can fluctuate daily — they depend on the system’s condition at any given moment. The value of the tokens can also vary significantly, so even if you’re seeing something like a 20% APY, it might not hold up over time. A year later, that 20% could have been just a temporary peak, and the value of the tokens might have gone down or fluctuated a lot.

So, that’s how DeFi yields work. It’s not that they’re bad, but they’re different. RWAfi, on the other hand, allows us to tap into real yields from off-chain assets and bring that money into the crypto ecosystem. Users earn stablecoins like USDC, USDT, or USD at a competitive APY. And it’s important to note that a 2–3% yield won’t cut it — you need meaningful APYs to make this worthwhile. The benefit of RWAfi is that you can still participate in DeFi while earning real yields, and that’s a big advantage.

The second opportunity comes from bringing real assets, real capital, and real cash flows from the off-chain world into the ecosystem. This grows the crypto space daily by introducing new capital. Plus, when you bring in more relatable assets, you expand the user base, attracting new kinds of users and increasing engagement.

We’ve seen this process unfold before with stablecoins. Initially, the use case for stablecoins was within DeFi — it made trading easier, providing a stable asset to swap or hold, which reduced volatility. Then, stablecoins allowed people globally to hold U.S. dollars, expanding their appeal. Finally, institutions got involved when they recognized the benefits of stablecoins for cross-border payments, faster settlement, and other financial products.

RWAfi is following a similar path. We’re starting with DeFi and crypto-native principles, growing the ecosystem by bringing in more yield opportunities. As the ecosystem expands, people familiar with these products will want access, which will lead to greater adoption by institutions. We’re laying the foundation by catering to the DeFi and crypto-native audience first, and then scaling with real users and real yields to bring more institutions on board.

Institutional Adoption and Tokenization of Assets

Ehan: So, as DeFi and other financial systems continue to grow, do you see traditional financial institutions playing a role in the next phase of Plume’s development?

Chris: I think it’s two things. We’ve been very fortunate to witness the rise and growth of institutional involvement in this cycle, largely due to developments like the BTC ETF, and players like BlackRock and Larry Fink stepping in and deploying significant amounts of capital on-chain. They’re beginning to tokenize a wide range of their products and bring them on-chain. We’re seeing a lot of excitement as institutions finally start building actual products in this space. For example, Franklin Templeton has their Benji product, BlackRock has its Bitcoin ETF, and Winston Tree and VanEck are also getting involved with similar initiatives. These large institutions are really starting to move on-chain.

Now, it’s going to take time. Everyone thinks that just because BlackRock or Larry Fink mentions tokenization and starts tokenizing a few products on Ethereum, it’s all going to happen overnight. But that’s not the case. It’s a process, and it’s going to take time.

Our perspective is simple: we want to show institutions how to use crypto in a way that benefits both them and the broader ecosystem. We’re in constant contact with these institutions, discussing how they can think about crypto not just as a way to save money on things like fund administration or business management — which is the usual narrative around blockchain’s cost-saving benefits — but as a network. Crypto is a network of users, capital, and protocols that can come together to build entirely new products and services, and, importantly, create new revenue opportunities.

Right now, institutions are in the exploration phase. They’ve shifted from focusing on private, permissioned chains to public blockchains. It’s great to see Larry Fink and BlackRock deploying products on Ethereum, and we’re seeing more and more institutional involvement. Over time, I expect we’ll see institutions focus on composability, growth, and building networks around these tokenized assets.

It’s one of those situations where, as they say, the days feel long but the years will be short. We’re still in the early stages of deployment, but once there’s a critical mass of institutional users and assets on-chain, things will really start to accelerate and take off.

Tokenized Asset Categories and Yield Opportunities on Plume

Ehan: Plume has recently mentioned managing $1.25 billion in assets. Could you tell us more about the types of real-world assets Plume has tokenized so far?

Chris: Yes, definitely. We recently announced our first wave of assets, which, as you mentioned, is over $1 billion in assets being deployed on Plume. As I mentioned earlier, we have over 180 protocols building on Plume today, and these assets cover a wide variety of categories. Since we’re an open, permissionless chain, unlike many other RWA projects that are permissioned, we have a lot of protocols working with us.

These protocols generally fall into three main categories. First, we have collectibles, which can include things like sneakers, Pokémon cards, watches, wine, and art. The second category includes alternative assets such as private credit, real estate, or green energy projects. The third category is financial instruments like equities or corporate bonds. So we’re tokenizing a diverse range of assets across all three categories.

For us, the focus is less on the type of asset and more on the use cases. In the crypto space, people are not so much concerned about the asset itself, but rather what they can do with it. We’ve centered our work on three major use cases that matter most to crypto users: yield generation, trading, and speculation.

Our initial release of $1.25 billion in tokenized assets primarily focuses on the yield generation category. These assets are designed to be very safe, stable, and provide high yields. For yield farming to work, the assets need to be liquid, composable, and permissionless. For example, we have products like corporate bonds that offer yields in the range of 8–10%, sometimes even up to 15%.

We also have solar farms — real, operational facilities with long-term contracts (40-year agreements with governments, schools, or hospitals) — which generate stable yields of 10–15%. Then there are oil wells, which essentially print cash by consistently generating revenue through extraction. These can provide yields ranging from 10–20%, and they’re very stable investments because they are tied to energy and high-quality, investment-grade vehicles.

The assets we focus on first are those that show use cases with real yields on-chain while minimizing risk. Over time, we will introduce assets with potentially higher yields, but we believe it’s essential to start with stable and safe products. Crypto started with zero yields in the early days of stablecoins, and then we moved to 5% yields from Treasury assets, which are now commonplace in the crypto space. As interest rates drop, people will look for better yield opportunities. We have access to proprietary assets that offer yields of 10%, 15%, and even 20%, all while remaining safe and stable.

If you have idle capital, it’s a no-brainer to allocate it to these areas, earning real yields while continuing to participate in DeFi and other crypto activities across the ecosystem.

Success Stories and Real-World Asset Deployment on Plume

Ehan: As you’re adjusting their usefulness, Plume has been making waves with its tokenization of real-world assets. Could you share some success stories or case studies where investors or businesses have greatly benefited from using your platform for asset organization?

Chris: Totally, 100%. We work with many different types of protocols. Since Plume is specifically built for RWAs and RWAfi, we can customize the chain and the tooling around it to make it the easiest platform for two things: 1) bringing and tokenizing assets on-chain, whether they are physical or synthetic, and 2) making these assets useful. This is why we have a strong user base and ecosystem of projects on the platform.

To provide a few examples, there are two sides to this: the asset side and the project side. We’ve built a product called Plume Arc that allows us to go much deeper than most protocols.

Most RWA projects typically ask: “Which chain should we use?” But the more important question is: “How do we get this asset on-chain?” Most general blockchains and ecosystems don’t have the tooling to make this process seamless, so we built that tooling and integrated it into the chain. This creates a very consistent and smooth experience for projects.

For example, take Mineral Vault, one of our protocols. They weren’t on-chain before and had discussions with different platforms like Securitize and other protocols. But what they really needed was a full-stack solution for distribution and liquidity. They needed a platform to tokenize their assets, a way to distribute them, and access to a community and ecosystem to make their assets useful. When they came to us, their first tranche was about $100 million, but they’re planning to tokenize over $1 billion in assets. If they had gone elsewhere, it would’ve cost them far more money. With Plume, we can tokenize assets much cheaper and faster — what would have taken several months with others, we reduced to just a few weeks.

The second example is a solar energy project. They have a large portfolio of green energy assets, primarily solar fields. Before coming to us, they tried to launch on a different ecosystem with full support from that chain, but the tokenization process was extremely difficult. After launching, they realized there were no users — despite being in an ecosystem with plenty of liquidity, transactions, and users, they didn’t attract any new users or capital.

In contrast, when they came to Plume, within just two weeks, they generated over 350,000 transactions from our community, gained over 100,000 unique users, and even raised capital through our ecosystem. They were able to build and transact efficiently.

That’s the difference between us and other platforms. We’re focused on RWAs and RWAfi, and we’ve built a community that aligns the protocols, users, and liquidity to make these assets genuinely useful. That’s why many projects may initially try other platforms but ultimately end up coming to Plume. This approach has allowed us to grow our ecosystem to over 180 protocols and countless users because we’ve aggregated everything in one place, focusing on a unified use case and the RWAfi narrative.

How Plume Identifies Suitable Assets for Tokenization

Ehan: So how does Plume determine which real-world assets are suitable for tokenization?

Chris: Well, it’s really two things. First, at the end of the day, we’re an open and permissionless chain. We don’t choose for people, and anyone can build anything on Plume. We don’t stop people from innovating. We want this to be an open platform where anyone can build and push forward without restrictions. That’s the first principle.

Secondly, where do we place our go-to-market efforts? Where do we focus more of our time and energy to bring things on-chain? It all goes back to the use cases, not the assets themselves. As I mentioned earlier, the key areas we focus on are yield generation, trading, and speculation. We think about the types of assets that fit into those categories and what our community, our audience, is likely to find appealing.

For example, in the yield farming category, people want safe, stable, real yields. They want assets that are liquid, composable, and scalable. That’s why the types of assets we bring on tend to have these characteristics. Take a solar farm — it’s a straightforward asset. There’s no construction risk, no operational risk, it’s already built. The only thing left is to collect the electricity bill. So, we like assets like this.

Similarly, with something like oil wells, once they’re tapped, they generate steady cash flow. While the price of oil fluctuates, the well itself is a stable, safe way to generate revenue. These are the types of assets we like.

On the other side, for trading and speculation, we like assets that already have a secondary market. Sneakers, Pokémon cards, sports cards — these are billion-dollar markets today. Around 80% of sneakers are bought for resale, making it a speculative, limited-supply market, similar to NFTs.

The issue with these assets is that the turnover process is slow. If you buy sneakers to speculate on, you have to wait for them to arrive, store them, and wait for the right moment to resell them. The process can be cumbersome.

With Plume, we can streamline this by holding the assets in one place. Users can sweep the floor, hold the asset, flip it later, or even take a loan against it while waiting for the price to rise. Alternatively, they can speculate on the price with a synthetic version of the asset. This speeds up the process, brings new liquidity, and improves market efficiency.

One of our protocols, for example, is partnered with a large secondary sneaker store, so every user who visits that store automatically becomes part of this protocol.

We’re focused on two things: bringing in real yields through yield-bearing assets and bringing in real users from existing markets, growing both the crypto ecosystem and the use cases for RWAs. That’s our strategy. But again, Plume is an open platform, and we encourage everyone to bring their assets on-chain. You never know where the next innovation or great use case will come from, so we want to make it easy for anyone to get started.

Innovations to Enhance Returns on Tokenized RWAs

Ehan: What innovations has Plume introduced to enhance or guarantee investment returns on tokenized RWAs?

Chris: Yeah, totally. There are a couple of key things here. For us, it’s all about building a full-stack ecosystem around asset selection, bringing assets on-chain, and structuring them in a way that makes them easy to understand and use. A lot of projects, when they bring their assets on-chain, may format them in a way that makes them illiquid or overly restrictive, such as requiring KYC, imposing lockups of 3–5 years, or offering low yields of just 3–5%.

But because we own the full stack from end to end, we can shape the products much earlier in the process. When we first talk to asset managers who want to deploy on-chain, we help them format and shape the protocol and assets to make sure they are usable once they come onto Plume. This means they are composable from day one, liquid, permissionless, and formatted in a way that makes sense for users. Sometimes it’s better to use NFTs, sometimes tokens, or you may want to pool assets with others to reduce risk and increase yields.

We’ve built protocols like Plume Arc and Nest to make the process simple. These innovations allow us to format assets correctly, and through Nest, we can distribute these products properly. You can either manage individual assets or create an index, pooling multiple assets together. This process increases yield, reduces risk, and boosts liquidity. It also allows you to create new baskets of assets and mix them however you want, creating new pools or indices.

When you do this, two things happen: the liquidity of the assets increases, and the yield goes up while risk goes down. On top of that, many of these assets are incentivized by both the protocol itself and Plume. By buying into these assets, users can earn 10–20% APY in stablecoins, paid out regularly, often in real time. On top of that, they can earn the protocol’s native token, which could provide an additional 10–15% in rewards. So, compared to traditional APY models where you might see 1% in stablecoins and 9% in tokens, with Plume, you can achieve 20% or more in stablecoins and then another 15–20% in tokens.

The infrastructure we’ve built makes it easy for users to allocate capital to real-world assets, earn yields, and withdraw when they want. This is the innovation we’ve brought to ensure the process is straightforward. We’ve also implemented tools and safeguards to help users select the right assets, ensuring they maximize their returns.

User Engagement and Tools for Interacting with Tokenized RWAs

Ehan: What actions can users take on Plume’s platform to engage with RWAs? Are there specific features or tools that empower users to interact with these tokenized assets?

Chris: Yes, definitely. The way we think about RWAfi, and RWAs in general, is similar to how we think about stablecoins. The success of stablecoins is largely due to the fact that users don’t have to learn anything new. It operates just like any other crypto asset — it’s open, composable, and liquid. You can buy and swap into USDC or USDT anytime, and there’s deep liquidity available. These assets are fully composable with various ecosystems and projects.

We’ve structured Plume, and the projects and assets on our network, to ensure the same kind of seamless experience. It shouldn’t matter whether the asset is crypto-native or real-world — you should be able to use it in exactly the same way.

The actions you can take are very straightforward. You should be able to mint an asset and buy it, just like minting an NFT or a token in the crypto world. The only difference is that you’re minting a real-world asset. You should also be able to swap it in a decentralized manner, trading in and out of these assets anytime you want.

On top of that, you can use these assets for other common DeFi activities. For example, you should be able to put the asset into a lending market and take out a loan. You can then use that loan for other purposes, or you can engage in more complex DeFi strategies like looping against yield-bearing assets. If you’re looping on yield-bearing coins, you can increase your returns from, say, 10–20% in stablecoins to 40–50% in stablecoins through leveraging.

Finally, you can also use these assets for speculation. You can enter a perpetual swap market, use the asset as collateral, and take out a leveraged position. These are the kinds of actions users can take on Plume with RWAs, and the whole system is designed to feel exactly like using regular crypto assets.

You shouldn’t need to know whether the asset is crypto-native or real-world. You just need to ask basic questions like: Where does the yield come from? Is it real? Is the asset stable? These are the same questions you would ask with any other crypto project.

Chris: Historically, RWAs have been slow, had low volume, and suffered from low adoption because of user experience barriers. They didn’t align with what the crypto-native audience expects. By removing those barriers, we’re ensuring that crypto users don’t need to learn anything new. The actions are the same, the use cases are the same — the difference is that RWAs provide real yields. But ultimately, the user experience should be just like anything else in crypto.

Navigating Regulatory Challenges and Ensuring Compliance

Ehan: How does Plume navigate the complex regulatory landscape when it comes to tokenizing real-world assets?

Chris: That’s a good question. Regulation is definitely a significant factor, and our approach is built around flexibility and modularity. There are many different geographies — whether you’re in Asia, the Middle East, or America — each with its own regulatory structure and requirements.

First, we’ve designed Plume in a modular fashion, allowing us to adapt to the best practices in each local area. For example, we have a partnership with a firm called Texture, which allows us to leverage a broker-dealer license. This enables us to trade regulated assets, which is one way to navigate these challenges.

Regulation can be a complex and costly process, but through partnerships, we’re able to simplify it and add value. Both we and our partners benefit from these collaborations, and ultimately, the users benefit as well. In different regions — whether in Asia, the Middle East, or elsewhere — we rely on strong partnerships to ensure that we can easily adapt to various regulatory regimes by swapping out licenses or using different protocols.

On Plume, there are two ways to operate. You can operate in a fully regulated manner if you want to. We’ve built the tooling and integrations needed for asset issuers to create permissioned protocols, allowing only certain types of users or trades on regulated exchanges. It’s easy to restrict access if that’s needed. But, on the other side, we’ve also built the entire ecosystem to be open, friendly, and permissionless. So, if you prefer a more crypto-native approach without heavy regulation, you can do that as well.

We balance both approaches in the same environment. Not all assets require regulation. For example, things like sneakers, cards, or watches don’t typically need to be regulated. We don’t want to exclude those, and we want to support a wide variety of assets on a single network. This creates network density and allows for greater flexibility and utility.

To achieve this, we rely on modular partnerships and have built much of the infrastructure ourselves. For instance, we have a transfer agent license, but to move quickly and ensure broad regulatory coverage, we rely on an ecosystem of partnerships rather than doing everything in-house. This way, we can navigate the complex landscape efficiently while providing value to all participants.

Security Measures for Tokenized Physical and Digital Assets

Ehan: What security measures does Plume implement to ensure the safety and integrity of both the digital and physical aspects of tokenized assets?

Chris: Great question. There are two key areas we focus on for securing both tokenized and digital assets. Let me give you two examples.

One use case involves tokenizing physical assets — like sneakers or collectible cards — where we take the physical asset, store it in a secure location, and mint a tokenized version of that asset on-chain. In these cases, we make sure the asset issuer partners with a highly trustworthy and established institution. For example, we have partnerships with major warehouses and highly secure storage facilities. These places securely store the physical assets, and any time the asset is accessed — whether a door is opened or a lock is triggered — a notification is sent on-chain so everyone knows what’s happening with the asset. This ensures the security and transparency of the physical asset.

Another example is yield-bearing assets like solar farms. To ensure both security and transparency, we can directly integrate with the solar farm’s equipment. We can track and display the amount of sunlight being captured, the electricity being generated, and directly map that data to the smart contract. This way, users can see exactly how much electricity is being produced and how much yield they are earning, providing full transparency and security in real time.

If you’re just storing sneakers at home and minting NFTs based on them, that’s not nearly as credible as partnering with a secure facility like a Brinks warehouse — a recognized brand in warehousing and storage. These trusted institutions can give everyone visibility into the asset’s proof of reserve, which greatly enhances credibility.

For the digital assets, we partner with top-tier custodians to ensure security. We work with firms like Anchorage, Fireblocks, BitGo, and others, depending on the region. This ensures that digital assets and tokenized assets are stored in highly secure and trusted environments, providing safety for both the physical and digital aspects of the assets.

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