How Hengfeng Technology Innovation Fills the Gap of "Third-Class Assets" in the RWA Market with Innovative FoF Tokenized Products

Nasdaq-listed Hengfeng Technology Innovation (FOFO.US) officially announced at the "Web3 Rooftop & Mixer" event held in Central, Hong Kong, that its first tokenized fund of funds product $FOF is set to launch soon. The event was co-hosted by Hengfeng Technology Innovation and the leading global crypto asset trading platform KuCoin, bringing together over a hundred representatives from Web3 funds, family offices, and digital asset institutions to witness a key step in on-chain finance moving from "single asset mapping" to "portfolio-level allocation."

Filling the Middle Layer of a Polarized Market

The current RWA (Real World Assets) tokenization market shows a clear polarization: on one end, there are tokenized money market funds exceeding $18 billion, essentially low-risk cash instruments; on the other end, there are private credit non-standard assets, which offer attractive returns but have high thresholds and weak liquidity. Between the two, there has long been a gap for a standardized allocation tool that combines stable returns, controllable volatility, and secondary liquidity.

$FOF aims to fill this gap. It is understood that its underlying assets are not a single bond or loan, but a combination of hedge funds and quantitative strategies managed by top institutions like BlackRock and AQR, aiming to provide long-term stable returns while controlling drawdowns.

Hengfeng Technology Innovation's CEO Xu Zhiheng stated, "The market does not lack high-risk, high-return crypto assets, nor does it lack low-risk cash instruments. What is truly missing is the middle layer—a type of asset that can outperform inflation while allowing investors to hold it with peace of mind. We call it 'the third type of asset,' which is the largest unmet need in on-chain finance to date."

Compliance is a Passport, Not Decoration

In the past, RWA projects often lingered in the conceptual stage, with the core bottleneck being the lack of compliance pathways and unclear underlying assets. The confidence behind $FOF comes from the upgrade qualifications held by Hengfeng Technology's wholly-owned subsidiary, which possesses Hong Kong Securities and Futures Commission licenses for types 4 and 9. This means that the product is incorporated into the traditional asset management regulatory framework from establishment, management to distribution, and that underlying assets must undergo systematic due diligence, with investment decisions and risk control meeting licensed standards.

Structurally, $FOF is a traditional fund operated by a licensed manager in Hong Kong, using BVI SPC as a vehicle, equipped with professional custodians, where tokenization only changes the expression and distribution path of shares. Technically, the product is deployed on Avalanche—a network that hosts over $630 million in RWA assets and has collaborated with institutions like Franklin Templeton. Its high throughput and low latency characteristics can meet the high-frequency demands of fund subscriptions, redemptions, and net asset value calculations.

Dual-Track Distribution: OSL Ensures Compliance, KuCoin Connects Ecosystem

$FOF adopts a "dual-track parallel" strategy: collaborating with the Hong Kong licensed exchange OSL to serve professional investors and institutional clients, ensuring compliant issuance and custody; while also listing on KuCoin to reach global crypto-native users and secondary liquidity, supporting withdrawals to on-chain wallets and reserving interfaces for future DeFi scenarios.

The business head of KuCoin stated at the event, "$FOF is not a speculative tool, but a compliant asset that can help on-chain funds achieve medium to long-term allocation. We will fully support its liquidity building."

From "Asset on Chain" to "Portfolio on Chain"

If past RWA practices completed "single asset mapping," $FOF marks a transition in on-chain finance to the "portfolio management" stage. Its value lies in:

• Supply Side: Transforming the extremely high-threshold top hedge funds into on-chain, divisible, and tradable standardized assets;

• Demand Side: Responding to the market's thirst for "return certainty," providing a haven for large holders and institutional treasuries without exiting the crypto ecosystem;

• Regulatory Aspect: Validating the complete pathway for "regulated on-chain asset management."

The challenges are equally clear: the rhythm of traditional fund subscriptions and redemptions presents a "liquidity mismatch" with the immediacy expectations of on-chain users. It is understood that Hengfeng Technology's solution does not overturn the underlying logic but integrates smart contracts and primary market design to reconstruct the holding experience while maintaining asset quality.

Starting Point, Not the End Point

For Hengfeng Technology Innovation, $FOF is primarily a "showroom." In the short term, it aims to validate the product model and accumulate operational data; in the medium to long term, it points to a more comprehensive "on-chain asset allocation" matrix—including regional FoFs, ESG-themed funds, and even hybrid products that integrate crypto-native strategies.

As global capital seeks direction, the practice of $FOF reveals a possibility: the next wave of growth in on-chain finance may no longer rely on the cyclical surges of native assets but rather convert time-tested traditional wealth into freely allocatable "newborn assets" through dual pathways of compliance and technology.