The Wado Ichimonji is a peaceful blade that cuts nothing, instead the target willingly gives way to the blade.
In the world of One Piece, there are two ways to cut things. First way is by overpowering the enemy with force. You swing against the enemy with enough power and durability, then the enemy gets sliced apart. This is the way of the Kitetsu. There is a far more superior way to cut; and that is cutting nothing.
The First hint of this is the fight between Zoro and Mr.1, where Zoro recalls Koshiro saying that in the world there are swordsman who cut nothing. Zoro then subconsciously activated Observational Haki, followed the voice of steel and then cut Mr.1 with the Wado Ichimonji.
This was the first hit at the try power of Wado, which Zoro barely tapped into. Wado Ichimonji: the Kanji of this blade means, the One Path of the Way of Harmony
Way of Harmony, and writer thinks this might be the key to its true powers. Wado Ichimonji doesn’t use destructive power against the target, it works with the enemy to the point where enemy doesn’t offer any resistance, thus allowing the Wado to slice it like paper.