Detailed Instructions

Begin by identifying the primary stakeholder groups and their core economic functions. This mapping is foundational for understanding the flow of value and risk.

• Asset Originators: Entities that tokenize real-world assets (e.g., real estate, treasuries). Analyze their incentives for participation, such as access to capital or operational efficiency.
• Capital Providers: Users who supply capital to the protocol, either as lenders or liquidity providers. Determine their yield expectations and risk exposure.
• Token Holders/Governors: Holders of the protocol's governance token. Assess their influence over parameters like fees, asset acceptance, and treasury allocation.
• Service Providers: Third parties performing critical functions like legal compliance, asset custody, or valuation. Evaluate their fee structures and liability.

Tip: Create a stakeholder matrix to visualize interactions, dependencies, and potential conflicts of interest between these groups.

Detailed Instructions

Examine the protocol's treasury inflows. Identify all revenue streams, which typically include origination fees, ongoing management fees, performance fees, and liquidation penalties.

• Trace Fee Flow: For each revenue stream, map the exact path from payer to ultimate recipient (e.g., treasury, service providers, token stakers).
• Quantify Parameters: Note the variable and fixed components. For example, an origination fee might be 0.5% of the asset value, while a management fee could be 0.25% APY on the outstanding principal.
• Assess Sustainability: Model revenue under different adoption and market scenarios. Determine if fees are sufficient to cover operational costs (e.g., legal, insurance) and provide stakeholder yields.
• Review Governance Control: Identify which fees are adjustable via governance and the historical precedent for changes.

solidityCopy
// Example: Conceptual fee distribution in a smart contract
function distributeFees(uint256 _originationFee) internal {
    uint256 treasuryShare = _originationFee * 70 / 100; // 70% to treasury
    uint256 stakerShare = _originationFee * 30 / 100;   // 30% to stakers
    treasury += treasuryShare;
    emit FeesDistributed(treasuryShare, stakerShare);
}

Tip: Compare the protocol's fee levels to traditional finance benchmarks for similar asset classes to gauge competitiveness.

Detailed Instructions

Focus on the incentive mechanisms embedded in the protocol's token design. The goal is to understand how tokenomics drive desired actions and secure the network.

• Staking for Security/Risk Absorption: Analyze staking requirements for validators or backstop providers. What collateral (e.g., the native token, stablecoins) is required? What slashing conditions exist for misconduct?
• Reward Distribution: Determine how staking rewards are funded (e.g., protocol fees, token emissions). Calculate the real yield (rewards from fees) versus inflationary yield (from new token minting).
• Governance Rights and Value Accrual: Evaluate the token's utility beyond governance. Does it have a claim on protocol cash flows via buybacks, burns, or direct dividends?
• Vesting Schedules: Review vesting periods for team, investor, and community allocations to assess potential sell pressure and long-term alignment.

Tip: Model the token's circulating supply inflation rate and the break-even point where real yield surpasses inflationary emissions, a key indicator of long-term sustainability.

Detailed Instructions

Construct scenarios to test the resilience of the incentive structures. The analysis should focus on both on-chain and real-world risk vectors.

• Counterparty and Underlying Asset Risk: What happens if an asset originator defaults? Assess the recovery process, legal recourse, and any first-loss capital or insurance pools.
• Liquidity and Redemption Risk: Model a scenario of mass redemptions or a "bank run." Evaluate the liquidity of the RWA tokens and the availability of secondary markets.
• Oracle and Valuation Risk: Consider the impact of stale or manipulated price feeds for the underlying RWAs. How often are assets revalued, and by whom?
• Regulatory Risk: Analyze the protocol's exposure to jurisdictional changes. Could new regulations invalidate a key revenue stream or increase compliance costs dramatically?
• Smart Contract and Protocol Risk: Review audit reports and consider economic exploits, such as flash loan attacks manipulating governance votes or draining liquidity pools.

Tip: Use a risk matrix to plot the likelihood versus potential financial impact of each scenario, prioritizing mitigations for high-likelihood, high-impact risks.

Detailed Instructions

Perform a comparative analysis with 2-3 leading protocols in the same RWA sub-sector (e.g., tokenized treasuries, real estate). This highlights relative strengths, weaknesses, and design trade-offs.

• Compare Stakeholder Value Propositions: Tabulate key metrics for capital providers (APY, risk profile), asset originators (cost of capital, ease of integration), and token stakers (yield sources, lock-up periods).
• Analyze Fee Efficiency: Compare the total cost structure (protocol fees + gas costs) for end-users. A protocol with lower fees but higher gas costs on a congested chain may be less efficient.
• Assess Governance Centralization: Review governance participation rates, the concentration of voting power, and the frequency of successful community-led proposals.
• Evaluate Technical and Legal Architecture: Contrast the on-chain/off-chain trust assumptions. Does one protocol use more decentralized oracles or have a more robust legal framework for asset backing?

bashCopy
# Example command to fetch key protocol metrics for comparison
# Using a hypothetical subgraph query for a lending protocol
curl -X POST \
  -H "Content-Type: application/json" \
  --data '{"query":"{ protocol(id:\"0x...\") { totalValueLocked, cumulativeFees, dailySupplyAPY } }"}' \
  https://api.thegraph.com/subgraphs/name/protocol/subgraph

Tip: Look for protocols that are winning in specific stakeholder segments; this can indicate a sustainable niche or a temporary incentive-driven advantage.