Why Real-World Assets on Public Blockchains Aren’t Valuable Without Fees

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

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

In his tweet, Cagney 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 because big financial firms like Visa, Nasdaq, JPMorgan, and DTCC are exploring 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: yield, utility, and governance.

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

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

Using Visa as an example, he noted it doesn’t matter if the company processes transactions on a blockchain if it pays very little in network fees. Since Visa owns much of its infrastructure, it keeps costs low and is unlikely to pay more than it already does. Without meaningful fee payments, token holders gain little value.

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

Cagney pointed out a structural contradiction in the RWA story. If public blockchains make firms like Visa or DTCC unnecessary, those firms have little reason to fully support the networks. Paying high fees to systems that undercut their business would hurt them.

He said the same applies to clearing, settlement, and exchange infrastructure. Simply moving parts of traditional systems on-chain doesn’t create the same economic impact as fully replacing them with decentralized finance.

The discussion also turned to stablecoins and consumer payments. Cagney noted stablecoins paired with biometric wallets and multi-party computation could reduce fraud by eliminating card numbers and centralized identity data. Without those attack points, he said, common forms of payment fraud decline.

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

Cagney replied that stablecoin payments work like digital cash, settling instantly without chargebacks. With lower fraud risk, blockchain systems don’t need the same fraud resolution as card networks. He also noted that merchants could reward users directly thanks to faster settlement and lower fees.

Governance also emerged as a key theme. Cagney noted that transparency and decentralization are essential to blockchain systems. Others argued governance must be enforceable at the protocol level to prevent power concentration and incentive drift.

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

Ultimately, the discussion highlights a broader issue for RWAs: blockchain progress depends not on traditional finance simply joining the system, but on building networks that fully replace legacy intermediaries.