Speaking as a member of a potential RWA partner, Centrifuge, I think this proposal is a good step in the right direction, but ultimately has some challenges to long-term viability. @blakewest has provided great in-depth analysis, and I’d happily co-sign his post as being reflective of my opinions and the best perspective. His points regarding liquidity, structuring, and duration are truly important in how to think about the RWA opportunity.
There is quite a bit of good discussion on these exact topics in the recent Centrifgue AMO proposal. I’d recommend reading through that for those who wish to wrap their heads around RWA.
Before going further, I think it’s important to reiterate the principal value of real-world assets - providing improved risk-adjusted returns. While there is a wide variety of differences across the RWA protocols and approaches, they collectively present Frax with an opportunity to achieve various sustainable yields for an approriate level of risk.
My recommendation is to build the RWA capacity progressively, to best develop comfort with the liquidity nuances and individual intricacies of each platform and provider. For Frax to best interface with these opportunities, whatever the final structure is, should incorporate a per-protocol approach that allows governance or management teams in Frax to deliniate the capacity allocated to each protocol and/or the corresponding pool. As Frax and the community develops more comfort with the capabilities, risk and return, and collateral/issuers/managers associated with each protocol, a more programmatic and autonomous structure can be incorporated over-time.
Ultimately, collateralized, on-chain credit investments represent some of the best yield-bearing opportunities over the near-term, potentially drawn-out bear market. The return, diversification, and potential long-term stability present unique opportunities for Frax. They should be incorproated into a larger strategic framework, that provides the appropriate amount of balance sheet exposure, in a way that addresses the specific risks up-front , with a long-term view on scaling and automation.