Dow Protocol bags $10.5M to bring RWA financing to e-commerce merchants

Dow Protocol has completed a $10.5 million seed funding round to expand its blockchain-based financing model that advances working capital to e-commerce merchants against pending receivables.

Dow Protocol announced the funding round on X, saying the investment was backed by MH Ventures, Mapleblock, Animoca Brands, Arcane Group, HSKChain, Essentia Partners, and Quartet Group. The company said it is building a PayFi real-world asset (RWA) structure that lets merchants receive financing before online marketplaces release their sales proceeds.

Unlike conventional merchant financing, which often requires businesses to wait for platform settlements or lengthy underwriting, Dow Protocol said its asset servicing partners provide funding based on merchants’ outstanding receivables and credit risk data. Repayments are then collected automatically through integrations with e-commerce platforms, where funds are deducted from merchants’ platform balances.

The company did not disclose its valuation or how it plans to allocate the newly raised capital.

Dow Protocol says merchants can receive funds within seconds

Explaining its model, Dow Protocol said e-commerce merchants usually wait between 14 and 28 days before platforms release payments from completed sales. During that period, merchants often need cash to replenish inventory, pay suppliers, or finance daily operations.

To shorten that delay, the protocol said asset servicers advance funds against pending platform receivables after assessing platform-integrated credit risk data. According to the company, merchants can receive financing within seconds, while cross-border settlements can be completed as fast as the same day.

Dow Protocol contrasted its approach with traditional financing, which it said can take between two and three months before businesses receive capital.

Because repayment instructions are built into participating e-commerce platforms, the company said loan repayments are deducted automatically once merchants receive platform payouts. Dow Protocol said this process improves repayment discipline by linking settlements directly to merchant balances instead of relying on separate repayment collections.

The company also described the addressable market as a $2.8 trillion global working capital opportunity, adding that merchants are willing to pay higher financing costs in exchange for faster access to funds.

PayFi RWA model combines receivables with on-chain lending

Dow Protocol said its financing framework applies PayFi principles to real-world assets by using merchants’ accounts receivable as the foundation for on-chain lending.

According to the company, programmable loan terms on blockchain networks can simplify operational processes that traditionally require manual administration, including repayment management, accounting, and default handling. It argued that working capital financing could become one of the earliest financial sectors to migrate on-chain because these processes can be automated within blockchain-based lending systems.

The announcement positions the protocol within a growing segment of blockchain projects that tokenize financial claims or connect real-world assets with decentralized infrastructure rather than focusing solely on cryptocurrency-backed lending.

Unlike tokenized Treasury products or blockchain-based money market funds, Dow Protocol’s model is centered on financing commercial receivables generated by online merchants.

RWA activity has continued expanding across on-chain finance

Dow Protocol’s fundraising comes as tokenized real-world assets continue gaining traction across decentralized finance.

A CoinShares report published on Aug. 6 said RWA deposits across decentralized lending platforms and exchanges reached $7.4 billion during the second quarter of 2026, more than tripling from $2.3 billion a year earlier. During the same period, total DeFi deposits declined by about 15%, while the on-chain market value of tokenized funds, equities, and commodities exceeded $40 billion, according to the report.

CoinShares said much of the deposit growth came from tokenized Treasury products, private credit strategies, and yield-bearing assets that continue generating returns while being used as collateral in lending markets. The report added that Ethereum-based lending protocols accounted for most RWA collateral activity because of their established liquidity.

Trading activity also expanded during the quarter. According to CoinShares, spot trading volume for tokenized real-world assets climbed roughly 220% year over year even as aggregate decentralized exchange spot volume declined by about 70%, suggesting that tokenized financial products are developing secondary markets beyond primary issuance.

Institutional firms have continued adding tokenized financial products

Institutional asset managers have also introduced new blockchain-based financial products in recent weeks.

Earlier this month, BlackRock launched two tokenized money market offerings, BSTBL and BRSRV, extending its digital asset strategy beyond cryptocurrency investment products. The funds invest in cash, short-term U.S. Treasury securities, and overnight repurchase agreements while allowing eligible institutional investors to access tokenized fund structures under regulated conditions.

BNY Mellon serves as transfer agent and tokenization provider for BSTBL, while Securitize performs the same role for BRSRV. BlackRock has also joined the Depository Trust & Clearing Corporation’s pilot program for tokenized stocks and U.S. Treasuries alongside several major financial institutions.