Opinion: Most Tokenized Assets Are Still Traditional Finance Wrapped On-Chain

marsbitPublished on 2026-05-25Last updated on 2026-05-25

Abstract

**Summary:** A market analysis reveals that the vast majority of tokenized assets remain mere "wrappers" for traditional finance on-chain. Of 593 surveyed assets, 77.6% are "Wrapped" assets where the token exists on-chain but key lifecycle functions (issuance, redemption, custody, access) remain off-chain. Only 11.1% are "Hybrid" assets, where some operational logic (transfers, settlement, yield accrual) is migrating on-chain, representing the true beginning of transformation. A mere 2.7% are "Native" assets built with a fully on-chain operational model. This explains why stablecoins feel structurally advanced compared to other RWA—they are true on-chain financial primitives, not just digitized traditional processes. The key future distinction won't be between tokenized and non-tokenized assets, but between those that are merely distributed on-chain and those that begin to *operate* on-chain.

Author: Yaroslav Writtle

Compiled by: Deep Tide TechFlow

Deep Tide Guide: The RWA sector has been discussed for so long, yet 77.6% of tokenized assets are still just "on-chain wrapping paper" — the token is on-chain, but issuance, redemption, and custody are entirely off-chain. What's truly worth attention are the 11.1% of "hybrid" assets, which are moving part of their lifecycle on-chain. This explains why stablecoins feel far ahead of other RWAs: they are genuine on-chain financial primitives, not just digital shells for traditional processes.

Market Size Growing Faster Than Market Maturity

An effective way to understand this market is not to look at whether it's tokenized or not.

Instead, look at:

Wrapped
Hybrid
Native

A 2026 market survey covering 593 tokenized assets showed that 460 assets, or 77.6%, were still classified as wrapped. Only 66 assets, or 11.1%, were hybrid, and a mere 16 assets, or 2.7%, had reached a native state.

This is the true shape of the market.

Wrapped Remains the Default Form

Most tokenized assets improve distribution, not infrastructure.

The token exists on-chain.

Most of its lifecycle does not.

Issuance, redemption, custody, transfer permissions, pricing, and investor access still heavily rely on off-chain systems.

So surface growth may be real, but on-chain autonomy remains low.

Hybrid Is Where Real Transformation Begins

Hybrid is the part of the market worth watching.

This is where certain parts of the lifecycle begin migrating on-chain:

Transfer logic
Settlement processes
Yield accrual
Partial compliance or access controls

Not fully native.

But no longer just wrapping paper.

This middle category is still small, which is why the market feels like it's moving faster than it actually is.

Native Is Rare for a Reason

Native assets are rare because the bar is high.

To reach that level, it's not just about the token being on-chain.

The operating model must also be on-chain.

This includes:

Issuance and redemption
Transfer execution
Custody assumptions
Composability with other systems

Very few assets truly meet this standard today.

Stablecoins Still Feel Ahead of Other Assets

This also helps explain why stablecoins still feel structurally ahead of most RWAs.

They are closer to being true on-chain financial primitives.

Many other tokenized assets still resemble digital wrapping paper for traditional processes, rather than assets that genuinely operate within an on-chain financial system.

What Matters Next

The market doesn't need more proof that assets can be tokenized.

A more useful question now is: which parts of the lifecycle have truly migrated along with it?

This is where the next round of differentiation will occur.

Not between tokenized and non-tokenized.

But between assets that are still distributed on-chain, and assets that are beginning to operate on-chain.

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