Avalanche’s architecture was designed with that challenge in mind. The combination of subnets, native asset bridging, and token standards like ERC-3643 (used by Tokeny) allows RWAs to plug into DeFi while still respecting regulatory boundaries. This means tokenized assets can interact with liquidity pools, lending protocols, and marketplaces without losing compliance context.
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Good point - Avalanche with subnet architecture and ERC-3643 does have a strong framework for compliance.
But my question is this: when tokenized real estate goes into a lending protocol, how does liquidation happen? With native crypto assets it’s easy - a few seconds and done. But with RWA you have to go through legal process too.
ERC-3643 maintains the compliance layer, true. But what about velocity and capital efficiency? If a tokenized asset can’t find liquidity quickly, then composability is only on paper.
Maybe the answer is in hybrid pools - where RWAs only interact with whitelisted counterparties to stay both regulatory and liquid. But that means part of DeFi becomes permissioned.