Ant Group announced the establishment of the L2 Blockchain Jovay on Ethereum, firmly optimistic about RWA?

In the context of an unprecedented integration of global fintech and decentralized technologies, a profound transformation is quietly brewing. Recently, Chinese fintech giant Ant Group officially launched its new Layer-2 scaling network based on Ethereum — Jovay. This move not only marks the formal embrace of public Blockchain by this commercial empire, which boasts a massive user base of 1.4 billion for Alipay, but also signifies that the Ethereum ecosystem may welcome a large influx of users, sketching out new possibilities for the future landscape of global financial infrastructure.

Jovay Core Narrative

Jovay is developed by the blockchain technology division “Ant Digital” under Ant Group. According to the official definition, Jovay is a “compliance-first, AI-assisted scaling network,” with its core mission to bring real-world assets (Real-World Assets, RWA) on-chain at an institutional level scale, thereby bridging the gap between traditional finance and Decentralization Finance (DeFi).

The launch of Jovay is backed by a firm optimism for the tokenization of “real-world assets” (RWA). In recent years, RWA has quietly become the fastest-growing sector within the Ethereum ecosystem. By early 2024, the total value of tokenized government bonds, notes, and funds on Ethereum has surpassed $12 billion, with a year-on-year growth of over 300%. However, much of this liquidity is still confined to a few native crypto protocols and generally faces the issue of insufficient regulatory clarity.

The emergence of Jovay is precisely aimed at addressing this pain point. It has designed a rigorous five-stage asset on-chain process: asset registration, structuring, tokenization, issuance, and trading. At each stage, Jovay has embedded verification checkpoints and off-chain data proof mechanisms, which allows regulatory agencies to obtain a level of transparency and regulatory oversight comparable to that of the traditional financial system. By combining Ant Group's proprietary enterprise-level blockchain platform “AntChain” with Ethereum, Jovay is able to establish a direct and compliant bilateral settlement channel between licensed financial institutions and on-chain liquidity providers.

We can imagine a specific application scenario: a bank wants to issue a digital bond. Through Jovay, the bank can complete the issuance directly on the blockchain and conduct instant settlement with a DeFi protocol as a counterparty, all without exposing sensitive internal data of the bank and fully compliant with the regulatory requirements of its jurisdiction.

Abbas Khan, the successful manager of the Ethereum Foundation, commented: “This is not just another experimental project of a startup. This is a clear signal that the next phase of global finance is being built on the Ethereum track. In China, Alipay is no longer just a simple application; it has become the core infrastructure layer that covers payments, loans, insurance, identity verification, travel, and other daily life aspects. Now, Ant Group is bringing this vast infrastructure on-chain.”

It is worth noting that Jovay clearly stated at the beginning of its launch that it would not issue a native token. This decision sends a clear signal: Jovay's focus is not on speculative trading in the retail market, but rather on providing stable, reliable, and compliant blockchain infrastructure services for enterprises and financial institutions.

Why choose Ethereum?

Ant Group chose to build Jovay on Ethereum rather than creating an independent private chain or consortium chain, which itself embodies a profound strategic shift. In recent years, large enterprises exploring blockchain technology often preferred permissioned ledgers like Hyperledger to avoid the price volatility and uncontrollable external risks of public chains. However, as governments and mainstream financial institutions around the world increasingly experiment with public blockchains like Ethereum, this traditional risk consideration is changing.

Ant Group's move is, in fact, a public endorsement of Ethereum as an institutional-level financial infrastructure. There are multiple considerations behind this: Interoperability and Network Effects: Ethereum has the largest and most active DeFi ecosystem in the world, with a total locked value of up to tens of billions of dollars. Any asset minted on Jovay has the potential to tap into this vast ocean of liquidity, thereby achieving combinatorial and capital efficiency that traditional financial systems cannot match. Cost Efficiency: As a Layer-2 network, Jovay can inherit the world-class security of the Ethereum mainnet (Layer-1), while its operational costs are significantly lower than building and maintaining an independent public chain from scratch. For example, since its launch in 2023, the Base network has paid less than $5 million in settlement fees to the Ethereum mainnet, saving up to 98% compared to the enormous expenses faced by independently running a set of validator nodes. For Ant Group, which needs to serve a billion-level user base, this efficiency improvement means lower-cost settlement services. Technological Neutrality and Risk Mitigation: As a decentralized public platform, Ethereum provides a neutral competitive environment for all participants. Ant Group builds applications on it without worrying about being restricted by a single platform provider, which is a strategic hedge against technological risk and a bet on the future of an open and interconnected financial network.

“Silent Revolution”

The emergence of Jovay can be seen as a “silent victory” for Ethereum in the process of gaining institutional trust. This experimental network, once perceived as full of speculation and volatility, is now gradually evolving into a neutral settlement layer that banks and fintech giants can trust without relinquishing control.

If Jovay can successfully gain market traction, Ethereum's share in the global tokenized finance sector will far exceed the current scope of RWA. In the future, whether it's carbon credits, municipal bonds, or other types of physical assets, every time a new asset class is brought onto the chain, it will create new demand for Ethereum's block space and liquidity routing.

So, the next billion users in the cryptocurrency world may not come from speculating on Meme coins or participating in high-risk liquidity mining. Instead, they will be inadvertently brought into this world—because the assets, savings, and credit tools they hold have silently migrated to a compliant and efficient financial track running on Ethereum. This move by Ant Group has pressed the accelerator for this grand narrative, and its far-reaching impact will gradually unfold over the coming years, potentially reshaping our understanding of digital finance.