RWA Token, Why Does the On-Chain World Also Have an "Augusta Club"?

By Prathik Desai

Compiled by: Block unicorn

In the 20th century, Augusta National Golf Club was criticized for its perceived elitism. Home to the Masters Tournament, the club boasted only 300 members, with an extremely stringent membership process that even prohibited potential members from applying directly. Membership was by invitation only. Alternatively, one had to be nominated and then wait patiently for membership.

Critics called it the ultimate "men's club," which was true until 2012. Worse still, for decades, it barred African Americans from membership. Sports journalists questioned why golf's most prestigious tournament would be held on a course that excluded 99.9% of humanity. The perception was bleak: a small group of wealthy white men controlled opportunities that millions of people yearned to experience.

The club boasts some notable members, including four-time Masters champion Arnold Palmer, business magnates Warren Buffett and Bill Gates, and Dwight D. Eisenhower, the 34th President of the United States.

Clearly, this isn't the most democratic way to run a club.

But why does Augusta National Golf Club seek to democratize world-class golf? Open access rarely creates a high-end brand. The club strives for excellence. With only 300 members and virtually no outside players, the course remains pristine year-round. Every detail is meticulously curated.

For example, it can handle the rigorous maintenance required to maintain the legendary Augusta National Golf Club brand. Think of hand-trimming fairways with shears, coloring pine needles, and moving entire stands of trees to achieve the perfect television angle. Fewer stakeholders means greater precision. When access is controlled, quality is achieved.

The same logic explains one of the most misunderstood trends in cryptocurrency today: why real-world asset (RWA) tokens — digital representations of everything from treasuries to real estate — are overwhelmingly held by a small number of wallets.

But the exclusivity here is not based on gender or race.

BlackRock’s tokenized money market fund, BUIDL (BlackRock USD Institutional Digital Liquidity Fund), is a fund with approximately $2.4 billion in assets but only had 81 holders as of July 31, 2025.

Similarly, Ondo Finance’s US Treasury bond fund, OUSG (Ondo Short-Term US Government Bond Fund), shows only 75 holders on-chain, while major stablecoins like USDT/USDC are held by millions of addresses (approximately 175 million stablecoin holders across the network).

At first glance, these digitized dollar assets look like all the problems that blockchain was supposed to solve: centralization, gatekeeping, exclusivity. Since you can copy and paste wallet addresses, why can't you buy these yield-generating tokens like any other crypto asset?

The answer lies in the same operational logic that Augusta National Golf Club uses to maintain its exclusivity. These tokens are centralized by design.

Regulated reality

The history of financial exclusion is often a story of privilege maintained through exclusion. But in these cases, exclusion served a different purpose: keeping the system compliant, efficient, and sustainable.

Most RWA tokens represent securities or funds and cannot be freely offered to the public without registration. Instead, issuers use private or limited offerings regulated by the U.S. Securities and Exchange Commission (SEC), such as Regulation D in the U.S. or Regulation S abroad, to limit tokens to accredited or qualified investors.

BUIDL (BlackRock) offered through Securitize is open only to U.S. qualified purchasers (a subset of accredited investors with a minimum investment of approximately $5 million).

Similarly, Ondo’s OUSG (Tokenized Treasury Bond Fund) requires investors to be both accredited investors and qualified purchasers.

These aren’t arbitrary barriers. They’re SEC certification requirements under Regulation D 506(c), which determine who can legally own certain types of financial instruments.

The contrast becomes even more stark when we examine tokens designed for different regulatory frameworks. Ondo's USDY is targeted only at non-US investors (selling overseas under Regulation S). By circumventing US restrictions, it achieves wider distribution, allowing non-US individuals who have completed KYC to purchase USDY. While USDY has 15,000 holders, while still a small number, it significantly exceeds OUSG's 75.

The same company, the same tokenized asset, but with a different regulatory framework, can result in a 200-fold difference in distribution.

This is where the comparison between Augusta National Golf Club and RWA becomes particularly relevant. To achieve this, RWA token platforms incorporate regulatory compliance into the token code or surrounding infrastructure. Unlike freely tradable ERC-20 tokens, these tokens are typically subject to transfer restrictions at the smart contract level.

Most security tokens use a whitelist/blacklist model (through standards such as ERC-1404 or ERC-3643), where only pre-approved wallet addresses can receive or send tokens. If an address is not on the issuer's whitelist, the token's smart contract will block any transfers to that address.

It's like a guest list enforced by code. You can't just show up at the door with a wallet address and ask to be let in. Someone has to verify your identity, check your accredited investor status, and add you to an approved list. Only then will the smart contract allow you to receive the tokens.

Backed Finance’s tokens come in two flavors: an unrestricted version and a wrapped, “compliant” token. Wrapped tokens only allow whitelisted addresses to interact with the token, and Backed automatically whitelists users after they pass KYC.

Efficiency Argument

From the outside, this system appears exclusive. From the inside, it appears efficient. Why? From the issuer's perspective, a concentrated holder base is often a rational, even deliberate, choice given their business model and constraints.

Each additional token holder represents a potential compliance risk and additional costs, both on-chain and off-chain. Despite these upfront compliance costs, on-chain rails offer long-term operational efficiencies, particularly in terms of automatically updating net asset value (NAV), instant settlement compared to T+2 in traditional markets, and programmability, such as automated interest distribution.

By implementing tokenization and deploying distributed ledger technology (DLT), asset managers can reduce operating costs by 23%, equivalent to 0.13% of assets under management (AUM), global fund network Calastone wrote in its white paper.

It predicts that tokenization could help the average fund improve its profit and loss statement by $3.1 million to $7.9 million in added profits, including $1.4 million to $4.2 million in increased revenue through more competitive total expense ratios (TERs).

The asset management industry as a whole could achieve a total of USD 135.3 billion in savings across UCITS, UK and US (40 Act) funds.

By limiting distribution to known and vetted participants, it is easier for issuers to ensure that each holder meets the requirements (accredited investor status, jurisdiction checks, etc.) and reduce the risk of tokens accidentally falling into the wrong hands.

The math makes sense. By targeting a small number of large investors rather than a large number of smaller ones, issuers can save on onboarding costs, investor relations, and ongoing compliance monitoring. For a $500 million fund, reaching capacity with five investors each contributing $100 million makes more business sense than with 50,000 investors each contributing $10,000. The former is also much simpler to manage. While on-chain transfers are automatically settled, the compliance layer involving KYC, qualification verification, and whitelisting remains off-chain and scales linearly with the number of investors.

Many RWA token projects are explicitly targeted at institutional or corporate investors rather than retail investors. Their value proposition often revolves around providing crypto-native yield channels for money managers, fintech platforms, or crypto funds with large cash balances.

When Franklin Templeton launched its tokenized money market fund, they didn’t intend to replace your bank checking account. They wanted to give treasurers at Fortune 500 companies a way to earn a yield on their idle corporate cash reserves.

The exception of stablecoins

At the same time, comparisons with stablecoins aren't entirely fair, as stablecoins address regulatory challenges differently. USDC and USDT aren't securities per se; they're designed as digital representations of the US dollar, not investment contracts. This classification is achieved through careful legal structure and regulatory engagement, allowing them to circulate freely without investor restrictions.

But even stablecoins require significant infrastructure investment and regulatory clarity to achieve their current scale of distribution. Circle spent years building compliance systems, engaging with regulators, and establishing banking relationships. The “permissionless” experience users enjoy today is built on a highly permissioned foundation.

RWA tokens face a different challenge: they represent actual securities with real investment returns and are therefore subject to securities laws. Until there is a clearer regulatory framework for tokenized securities (the recently passed GENIUS Act begins to address this), issuers must operate within existing limitations.

Future Outlook

The current centralization of RWA tokens is, after all, the closest representation of how traditional finance works. Consider a traditional private equity fund or a bond issuance restricted to qualified institutional buyers, where participation is typically limited to a small number of investors.

The difference lies in transparency. In traditional finance, you don't know how many investors hold a particular fund or bond—this information is private. Only large holders are subject to regulatory disclosure. On-chain, every wallet address is visible, making centralization obvious.

Furthermore, exclusivity is not a characteristic of on-chain tokenized assets. This has always been the case. The value of tokenizing RWAs is that they make these funds more manageable for issuers.

Figure's Digital Asset Registry Technology (DART) reduced loan due diligence costs from $500 to $15 per loan, while also shortening settlement times from weeks to days. Goldman Sachs and Jefferies can now purchase loan pools as easily as trading tokens. Meanwhile, tokenized treasuries like BUIDL suddenly became programmable, allowing you to use these ordinary government bonds as collateral to trade Bitcoin derivatives on Deribit.

Ultimately, the noble goal of democratized access can be achieved through regulatory frameworks. Exclusivity is a temporary regulatory friction. Programmability is a permanent infrastructure upgrade that makes traditional assets more flexible and tradable.

Back at Augusta National Golf Club, their controlled membership model has made golf tournaments synonymous with perfection. A limited membership means every detail can be managed with pinpoint precision. Exclusivity creates the conditions for excellence, but paradoxically, it also makes it more cost-effective. Providing the same level of precision and hospitality to a broader, more inclusive audience would cost exponentially more.

A controlled holder base also makes it easier for fund issuers to ensure compliance, efficiency and sustainability.

But on-chain barriers are gradually being lowered. As regulatory frameworks evolve, wrapped products emerge, and infrastructure matures, more people will gain access to these benefits. In some cases, this access may be achieved through intermediaries and products designed for wider distribution (such as an unrestricted version of Backed Finance) rather than through direct ownership of the underlying tokens.

It’s still early in the story, but understanding why things are the way they are today is key to understanding the transformation that’s about to happen.