Why real-world assets on public blockchains are not valuable without fees

Mike Cagney, CEO of financial services firm Figure, has said that the growing interest in real-world assets (RWAs) on public blockchains is meaningless without returns for token holders.

He argued that public blockchains were built to replace traditional financial intermediaries, not host them. Cagney shared these comments this week during a public discussion about X.

RWA growth and the TVL debate

In his tweet, Cagney said the market often confuses activity with real value. Metrics like total value locked (TVL) only matter if they generate fees that benefit token holders.

He notes that RWAs have gained attention as major financial companies such as Visa, Nasdaq, JPMorgan and DTCC explore blockchain. People see this as mainstream crypto adoption, but Cagney says this ignores how value is actually created on public blockchains.

According to him, token value comes from three things: revenue, utility and governance.

• Revenue comes from network costs and other cash flows.
• Usefulness is the practical benefits, such as lower costs or better access to financial products.
• Governance is the extent to which token holders can influence rules and outcomes.

Metrics like ecosystem size or TVL only matter if they increase the fees paid to token holders.

Related: China classifies RWA tokenization as illegal financing in joint warning from seven associations

TradFi on Blockchain: Adoption or Distraction

Cagney said just because traditional financial firms are exploring blockchain doesn’t mean public networks will benefit from it.

Using Visa as an example, he noted that it doesn’t matter whether the company processes transactions on a blockchain as long as it pays very few network fees. Because Visa owns much of its infrastructure, it keeps costs low and is unlikely to pay more than it already does. Without meaningful compensation, token holders receive little value.

He emphasized that traditional financial companies exist to mediate transactions, while public blockchains aim to remove middlemen. Blockchain’s real value comes from eliminating these intermediaries, not supporting them.

The disintermediation paradox

Cagney pointed out a structural contradiction in the RWA story. If public blockchains make companies like Visa or DTCC obsolete, those companies have little incentive to fully support the networks. Paying high fees to systems that undermine their activities would harm them.

He said the same applies to clearing, settlement and exchange infrastructure. Simply moving parts of traditional systems in the chain does not have the same economic impact as completely replacing them with decentralized finance.

Stablecoins, fraud and payments

The discussion also focused on stablecoins and consumer payments. Cagney noted that stablecoins combined with biometric wallets and multi-party computation could reduce fraud by eliminating card numbers and centralized identity data. Without these attack points, he says, common forms of payment fraud will decline.

Critics disputed this view, citing irreversible transactions, wallet breaches and smart contract exploits. They also raised concerns about consumer protection, regulatory compliance and insurance coverage.

Cagney responded that stablecoin payments work like digital cash and settle immediately with no chargebacks. Because the risk of fraud is lower, blockchain systems do not require the same fraud resolution as card networks. He also noted that merchants can reward users directly with faster settlement and lower fees.

Long-term governance and token value

Governance also emerged as an important theme. Cagney noted that transparency and decentralization are essential for blockchain systems. Others argued that governance should be enforceable at the protocol level to prevent power concentration and incentive bias.

Related: Solana RWA ecosystem reaches record high of $873 million with 325% growth by 2025

He used the Provenance blockchain and its HASH token as an example. The network focuses on generating fees rather than just increasing total value (TVL), limits the creation of new tokens, and gives holders both utility and voting rights.

Ultimately, the discussion highlights a broader issue for RWAs: Blockchain’s progress does not depend on simply connecting traditional finance to the system, but on building networks that completely replace old intermediaries.