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Abstract

CycleX is dedicated to building a decentralized platform for tokenizing real-world assets (RWA). By integrating advanced blockchain technology with artificial intelligence, we aim to provide a secure, transparent, and efficient asset trading experience. We recognize that RWAs serve as a crucial bridge between traditional finance and blockchain, holding significant market potential. Consequently, CycleX focuses not only on continuously optimizing the user experience to ensure an intuitive platform interface and trading process, but also on establishing deep partnerships with various financial institutions to ensure asset diversity and reliability. At the same time, CycleX adheres strictly to global compliance standards to ensure the legality and security of the platform’s operations. Through an innovative token economic model and smart investment advisory services, CycleX will help investors access more efficient investment opportunities, contributing to the further expansion and development of the global market.

Background

Market Opportunity

The Rise of Web3 and RWAs

The rise of Web3 is reshaping the global economy and financial landscape, with its core principles being decentralization, transparency, and user empowerment. Web3 disrupts the centralized monopolies of traditional Web2 through blockchain technology, offering users a freer and more open internet experience. From the initial explorations of Bitcoin and Ethereum to the rapid development of DeFi (Decentralized Finance) and NFTs (Non-Fungible Tokens), the Web3 ecosystem is expanding rapidly, covering various sectors such as finance, art, gaming, and social media.

In this context, RWAs (Real-World Assets) are emerging as a key component of the Web3 ecosystem, connecting the traditional financial world with blockchain technology. RWAs encompass a wide range of asset classes such as precious metals, commodities, real estate, bonds, stocks, insurance, and art. By tokenizing these real-world assets and bringing them onto the blockchain, RWAs provide token holders with opportunities to engage in transactions such as loans, leasing, and trading on-chain. This not only broadens the application scenarios for blockchain but also injects new vitality into traditional financial markets.

Market Size and Growth Potential

As of late January 2025, the total market capitalization of the RWA sector has surpassed $65 billion, growing by 260% in the past four months and experiencing a 60-fold increase since the market's explosion in May 2023. This remarkable growth rate indicates that the RWA market is in a phase of rapid expansion. However, compared to the total cryptocurrency market (approximately $3.6 trillion) and traditional financial markets (approximately $200 trillion), the RWA market accounts for only 1%, which demonstrates significant growth potential.

The traditional financial market is enormous but has long-standing issues such as high entry barriers, high transaction costs, and insufficient liquidity. By tokenizing real-world assets, RWAs can effectively lower investment thresholds, enhance asset liquidity, and break down geographical barriers, offering more investment opportunities to global investors. In the future, as more traditional assets are brought onto the blockchain, the RWA market is expected to witness explosive growth.

Policy Support and Institutional Engagement

Various regions around the world are open to RWAs and are actively promoting the development and implementation of related policies. For example, Hong Kong, the United States, and the European Union are exploring regulatory frameworks for RWAs to support their compliant development. These policy supports provide a favorable environment for the growth of the RWA market.

At the same time, traditional financial giants are also actively entering the RWA space. Institutions such as BlackRock, JPMorgan, Goldman Sachs, Fidelity, and Citibank are venturing into the RWA sector, aiming to push forward decentralized development and innovation in traditional finance. The participation of these institutions not only injects capital and resources into the RWA market but also enhances the credibility and recognition of the market.

Market Pain Points and Solutions

Challenges in Asset Access

The current RWA market faces a lack of diverse asset access platforms, with many valuable assets yet to enter the blockchain. This results in a narrow range of available assets, which fails to meet the needs of investors. Moreover, the process of accessing assets involves information asymmetry and valuation challenges, which increases investment risks.

Deficiencies in Tokenization Issuance Mechanisms

The tokenization issuance mechanisms in the RWA market are underdeveloped, lacking transparency and compliance. Many products in the issuance process fail to disclose sufficient asset information, making it difficult for investors to assess their real value. The market is also limited in terms of the variety of products, and innovation is lacking.

Insufficient Liquidity on Trading Platforms

The RWA market lacks highly liquid and freely tradable platforms. Many tokens cannot circulate freely on the secondary market, which limits the liquidity of assets. Additionally, trading platforms often suffer from poor user experiences, complex operations, and difficulties in attracting ordinary investors.

CycleX Overview

What is CycleX?

CycleX, launched by the fintech company WhaleFlow Labs, is designed to introduce AI technology to create a decentralized platform for tokenizing real-world assets (RWA). The platform offers comprehensive features, including real-time RWA market data, tokenized fund issuance, advanced DEX trading, asset management, asset rating, and other services. As the first platform to integrate AI technology with RWAs, CycleX leverages AI models and machine learning to offer services such as smart investment advisory, intelligent marketing, and customer support, significantly enhancing the user experience.

CycleX Solutions

Asset Access

CycleX has established deep partnerships with banks, securities firms, listed companies, real estate enterprises, and other institutions, ensuring a substantial reserve of high-quality assets. Through these collaborations, CycleX guarantees the diversity and reliability of asset sources, providing investors with a rich array of investment choices. Additionally, CycleX uses blockchain technology to ensure asset transparency, reducing risks associated with information asymmetry.

Asset Issuance

CycleX partners with third-party institutions (such as auditors and Chainlink) to issue secure, transparent, and diversified tokenized funds. During the tokenization process, CycleX strictly adheres to compliance standards, ensuring the authenticity and transparency of asset information. CycleX offers various types of RWA products, including real estate funds, bond funds, and stock funds, to meet the diverse needs of investors.

Asset Trading

CycleX provides both mobile and PC trading platforms, ensuring convenient and seamless trading experiences for users. Moreover, CycleX offers liquidity support in the secondary market to ensure the free circulation of RWA tokens. Additionally, CycleX provides an AI-driven investment advisory service to help users formulate personalized investment strategies, enhancing both investment efficiency and user satisfaction.

Innovative DEX Model

CycleX introduces an innovative tokenized fund, named "CDEX" (CycleX DEX Fund), which brings the decentralized exchange (DEX) model to RWA trading. The revenue of CDEX is derived from the platform's DEX trading income, calculated based on trading volume. This innovative model provides a new development approach for developers in the RWA space, addresses the issue of trading scenarios, and has attracted significant attention from both on-chain and off-chain financial traders.

Product Features

• Product Diversity: CycleX is committed to the widespread tokenization of real-world assets, covering a wide range of products such as receivables, REITs, bills, and more, helping investors diversify risk and optimize their investment portfolios.

• Technological Innovation: CycleX ensures transaction transparency and security through secure blockchain technology. At the same time, smart contracts automate the trading process, improving efficiency and reducing costs.

• Global Trading: Leveraging blockchain's features, CycleX overcomes the geographical and economic limitations of traditional markets, opening up investment opportunities to global investors and allowing for diversified global investment in real-world assets.

• User Experience: The platform offers an intuitive user interface and comprehensive customer service, simplifying the tokenization and investment processes to ensure a convenient and efficient user experience.

• Liquidity: By subdividing large assets into smaller token units, CycleX significantly enhances asset liquidity and investment appeal, attracting a wide range of investors.

• Security: Using advanced encryption and blockchain technology, CycleX ensures a high level of transaction security and immutability, providing confidence and security to investors.

Competitive Advantages

CycleX builds a new bridge between traditional asset holders and global investors, making high-value assets, which are typically difficult to access, more easily investable and tradable. This not only enhances the value of the assets but also opens up broader capital markets for asset holders.

User Benefits

• Intelligent Marketing Matrix: We have developed an intelligent marketing matrix to precisely target user needs, significantly enhancing user conversion rates and engagement.

• Gamified Scenarios: By introducing "BOX" gamification elements, we increase user engagement, which effectively encourages long-term retention.

Product Benefits

• User Experience: We provide users with a smooth, intuitive, and simple operation experience, making RWA products easier to use.

• Brand Advantage: With our strong reputation and brand influence in the industry, we further enhance users' trust and loyalty toward our products.

• Innovation: We continually innovate our technology and products, maintaining our market-leading position and quickly adapting to changing market demands.

• Versatility: Our products combine flexibility and adaptability, catering to the diverse needs of different customer groups and applicable across various use cases.

Issuance Benefits

• Compliance and Standardization: We navigate multiple industry regulations and standards to ensure product compliance, providing customers with safe and reliable solutions.

• Efficient Issuance: The product has an efficient issuance process, supporting quick launches and lowering the entry barriers for enterprises.

• Channel Advantage: With our extensive network of partners and resource channels, we have already established efficient distribution and promotional pathways to quickly reach target markets.

System and Functional Structure

Issuance System

• Asset Auditing:

Before tokenizing funds, the platform conducts a rigorous audit of all assets to be tokenized, ensuring that the fund’s assets meet regulatory requirements and that all data is transparent and reliable. The auditing process includes verification of asset authenticity, valuation reviews, and compliance checks. The platform collaborates with third-party independent auditing firms to provide a solid foundation for tokenization.

Asset Management System

• Liquidity Management:

Tokenized funds allow investors to adjust their asset portfolios according to market demand. This process involves increasing or decreasing holdings, which has become a key component of fund management. During this process, investors can adjust their holdings by buying or selling specific assets. The platform utilizes smart contracts for automated management, ensuring that the adjustment process is seamless, immediate, and transparent, safeguarding investors' interests.

• Valuation and Net Asset Value (NAV):

Valuation of the fund's assets is one of the key steps in the tokenization process. The platform regularly calculates the fair market value of the assets and determines the fund's total asset valuation to calculate its NAV. Additionally, the platform utilizes Price of Reserve (POR) as a pricing standard for each asset being tokenized, ensuring that the market price of the tokens is closely tied to the true value of the assets, mitigating the risks of market bubbles or price manipulation.

• Transparency:

To ensure that all asset information is publicly available and transparent, the platform stores all relevant fund data on the blockchain. This includes the initial valuation of the assets, trading records, buy/sell adjustments, NAV changes, and other pertinent data. These data are stored on an immutable public ledger through blockchain technology, ensuring that investors can easily access and verify them, thereby enhancing trust.

• Tokenization:

Based on each asset's POR and NAV, the platform uses smart contracts to convert the asset into its corresponding digital token. Each token represents a certain proportion of ownership in the asset, and these tokens can be traded on the secondary market or used in other fund operations. Tokenization not only enhances asset liquidity but also allows smaller investors to participate in markets that traditionally had high barriers to entry.

Trading System

• Secondary Market Trading/Transfer:

CycleX provides a secondary market where users can buy, sell, or transfer tokens. The platform offers a secure, efficient, and transparent trading environment to ensure smooth transactions.

• KYC (Know Your Customer) Verification:

Before any transaction, the platform requires users to undergo KYC (Know Your Customer) verification. This step ensures that users' identities comply with the platform’s regulatory requirements, preventing activities such as money laundering or fraud. Users must submit personal information and identification documents. The platform uses a combination of AI and manual review to quickly complete the identity verification process. Once verified, users gain full access to the platform and can participate in the tokenized fund trading.

• Purchase Process:

The platform's sole payment currency is USDT. During the purchase process, the platform automatically calculates the purchase price, transaction fees, and other charges to ensure that users are fully aware of all costs associated with the transaction.

• Transfer and Trading:

Purchased fund tokens will be stored in the platform’s digital wallet. Users can choose to keep the tokens in their wallets or trade them in the secondary market. Users can set a selling price, and when another user matches the price, the transaction is automatically completed, with assets being transferred to the buyer’s account in real time.

AI Features

• Smart Retail:

To improve user trading experience and increase market liquidity, CycleX is preparing to launch an AI-powered retail system, specifically designed for marketing and after-sales service in retail scenarios. The system’s main features include intelligent recommendations, real-time market monitoring, and automated after-sales service.

• Marketing System:

The AI retail system uses big data analytics and user behavior tracking to understand each user's needs, preferences, and risk tolerance. Based on this data, the system provides personalized marketing pushes, including recommended fund tokens and investment portfolio suggestions. By regularly delivering intelligent marketing pushes, the platform maximizes user activity and helps investors make more informed decisions.

• Rating System:

The AI system collects and integrates data from various sources, such as financial reports, market data, news, social media, and macroeconomic indicators, to provide comprehensive data aggregation and processing. Using machine learning and statistical analysis, the AI can provide real-time asset valuations and compare them with market standards, assisting investors in making informed decisions.

Compliance (Licensing)

CycleX is a tokenized asset trading platform supported by WhaleFlow Labs. The following licensed entities are wholly owned subsidiaries of WhaleFlow Group:

• WhaleFlow Group (US Ltd): Registered as a Money Service Business (MSB), holding an Investment Advisor License (RIA) issued by the U.S. Securities and Exchange Commission (SEC) to provide compliance support for digital asset platforms.

• WhaleFlow Group (Ltd): Fully regulated by the British Virgin Islands Financial Services Commission, ensuring that all operations comply with the regulatory framework for financial services within its jurisdiction, providing compliance support for digital asset platforms. Tokenized funds are available to qualified investors who pass KYC and Anti-Money Laundering (AML) checks.

CycleX establishes online asset pools (RWA Pools) through Special Purpose Entities (SPEs) or Special Purpose Vehicles (SPVs), which include precious metals, credit assets (such as bonds and securities), cryptocurrencies, and alternative investments (such as real estate and art), all managed by qualified custodians to ensure the safety of investors' assets.

Token Economics

CycleX’s token has the following main uses:

• User Incentives: CycleX attracts more users to the platform by offering investment return incentives, increasing the overall activity of the ecosystem.

• Token as a Base Asset: CycleX’s token will serve as one of the base assets supporting RWA funds, ensuring the security and liquidity of the funds.

• RWA Fund Payments: CycleX will use its token as a payment currency for RWA funds.

• Business Development Support: CycleX will utilize its token to support the development of its four core business areas: asset issuance, asset trading, asset management, and innovation.

• DAO Governance: CycleX’s token will also participate in the platform's DAO governance, allowing token holders to engage in the development direction and major decisions of the platform.

In summary, CycleX's token economic model aims to stimulate the participation of all stakeholders through token incentives, asset support, and revenue distribution, promoting the healthy development of the CycleX ecosystem. This comprehensive use of tokens will enhance CycleX’s competitiveness and provide investors with an optimized service experience.

Roadmap (2025)

Q1:

• In-depth User Experience Optimization: Based on user feedback, deeply optimize the interface and transaction processes to improve user satisfaction and platform usability.

• Launch of App 2.0 and PC 2.0: Enhance platform usability and satisfaction, ensuring a smooth transition to the new versions.

• Strategic Market Expansion Plan: Conduct a comprehensive market analysis, explore new asset categories and regional markets, develop targeted market expansion strategies, and begin expanding into Southeast Asia.

Q2:

• Comprehensive Platform Feature Upgrades: Introduce advanced features based on the latest market trends and user demands to improve transaction efficiency and security.

• Release of Token Economic Model: Update the asset issuance system to ensure token diversity and liquidity.

• Strengthening Partner Network: Enhance collaborations with financial institutions and asset management companies to expand new partnership channels and jointly improve market competitiveness.

Q3:

• Strengthening Global Compliance: Continuously monitor global financial regulatory changes to ensure platform operations remain compliant with international standards and obtain the necessary business licenses for countries of operation.

• Diversified Marketing Activities: Implement a comprehensive marketing campaign, including online promotions, social media activities, and industry collaborations, to further enhance brand influence.

• Token Generation Event (TGE): Drive ecosystem development and ensure the continuous growth and user engagement on the platform.

Q4:

• Active Global Market Expansion: Based on market research and analysis, expand into new regions and asset categories, particularly focusing on the European and North American markets.

• Launch of Stablecoin: Evaluate the platform’s development and launch a platform stablecoin to provide users with more trading options and stability.

• Strategic Plans: These initiatives will help CycleX improve user experience, expand market coverage, and ensure the platform’s compliance and innovation, driving sustainable ecosystem growth.

Conclusion

CycleX, as a pioneer in the RWA tokenization market, is building a new bridge for traditional asset holders and global investors through its innovative technology and flexible market strategy. With in-depth market analysis and continuous technological innovation, CycleX not only enhances asset liquidity and investment opportunities but also provides users with a more convenient and secure investment experience. In the future, as more traditional assets are digitized and policy support grows, CycleX is well-positioned to occupy a key role in the RWA market and drive the industry’s advancement and development. We believe CycleX will become a key player in leading the RWA tokenization revolution, creating greater value for investors.