RWA has been a hot topic in the past two years, but honestly, few people truly understand the key issues involved. Most are discussing "on-chain technology," but that's not the hardest part. The real challenge is—ensuring compliance while protecting privacy.

Let's look at it from a different perspective. Suppose you want to move stocks or real estate onto the blockchain for trading. Regulatory authorities will definitely require real-name verification, meaning they need to know "who is trading" (that set of KYC/AML procedures). But what if you're a large investor or institution? You definitely don't want everyone online to see how much assets you hold in your wallet, nor do you want your trading strategies to be exposed. This creates a vicious cycle.

Public blockchains like Ethereum? They can't handle this at all. Blockchain is attractive precisely because of its transparency, but that transparency is a nightmare for institutions. So, solutions that can truly resolve this contradiction are few and far between.

This is where some projects find their entry point. Take zero-knowledge proofs as an example; the principle isn't complicated—users can prove to on-chain services that they meet certain conditions (I am of legal age, I qualify as an investor, I am not on a blacklist), without revealing specific personal identity data. Sounds abstract? Let me make it more concrete.

Suppose a Wall Street institution wants to issue tokenized bonds on-chain. Under current regulatory frameworks, other public chains simply can't handle this. They either choose complete anonymity (which regulators will never permit) or full transparency (which scares off institutions). But what if there is suitable infrastructure? Institutions can verify the authenticity of the buyer's qualifications while completely hiding the buyer's identity information from the outside world.

This is the key to breaking the deadlock. The biggest concern for institutions entering the market would be addressed instantly.