Original: a16z crypto
Compiled | Odaily Planet Daily (@OdailyChina); Translator | Moni
Tokenized Assets, often referred to as "Real World Assets (RWA)", are changing the form of assets, how they flow, and how financial systems are constructed.
Just last month, the market size of tokenized assets surpassed $30 billion and is currently stabilizing around $34 billion (excluding stablecoins). This scale is roughly equivalent to that of a regional bank or a top university endowment fund. While still minuscule compared to the global financial system, it is substantial enough to create real-world impact.
Two years ago, the market size of tokenized assets was less than $3 billion. Since then, the market has undergone a dramatic transformation: the US GENIUS Act brought clearer regulatory frameworks for stablecoins, institutional-grade on-chain infrastructure matured, and a wave of financial institutions began deploying blockchain technology around the same time. It was driven by these factors that the tokenized asset market grew tenfold in less than two years. (Note: Although stablecoins are not included in the above statistics, they have substantially fueled the growth of the entire market by greatly simplifying on-chain payments and settlements.)
This article analyzes the reasons behind the rise of tokenized assets and their future trajectory through 7 charts.
Tokenized Assets Take Off: U.S. Treasuries Become the Biggest Growth Engine
U.S. Treasuries are the primary driver behind the recent growth of the tokenized asset market.
The advantages of tokenized U.S. Treasuries are clear and intuitive: investors can hold robust interest-bearing assets in a digital form, enabling more efficient and flexible trading and transfer. Financial institutions, on the other hand, can achieve efficiency gains in settlement and collateral asset allocation, seamlessly connecting with digital financial markets.
Crypto investors can also leverage tokenized Treasuries to put idle stablecoins to work, earning traditional money market yields. Asset managers like BlackRock and Franklin Templeton have accordingly entered the space, fostering a market with hundreds of billions in potential.
It's important to note that the growth rates of various tokenized asset types vary widely. This stems from differences in the technical and regulatory difficulty of tokenizing different assets, as well as market acceptance post-launch.
- Asset-backed credit leads the growth by a wide margin. This category mainly includes tokens for Home Equity Lines of Credit (HELOCs) and lending vaults. Niche financial assets like reinsurance contracts and Bitcoin mining notes follow, reaching a $1 billion market cap within two years.
- Venture capital-related assets took over seven years to break the $10 billion market cap mark. Active strategy-related assets followed a similar timeline. These asset structures are more complex, have longer investment cycles, and face higher operational and regulatory barriers.
- Treasuries and commodities have a moderate pace of on-chain adoption, reaching a market cap of over $10 billion in 2 to 3 years, and are now mainstream categories.
At the beginning of 2024, Treasuries and commodities accounted for almost the entire tokenized asset market share. Since 2024, the share of credit, niche finance, equities, and other categories has steadily increased, but market concentration remains high. Currently, U.S. tokenized Treasuries and commodities together occupy about two-thirds of the market share.
Segmented Landscape of the Tokenized Asset Market
The tokenized commodities sector is highly concentrated internally, with gold tokens dominating the vast majority of the share. The total size is about $5.1 billion, with gold tokens alone amounting to $5 billion. Silver and other commodity tokens are only $57.6 million, accounting for less than 0.01%.
Gold is naturally suited for the tokenized asset model. Currently, the tokenized commodity market is essentially dominated by gold. This is because gold has a globally unified standard, is convenient to store, is not easily perishable, and has long been traded based on entitlements/claims.
Moreover, crypto market investors have historically favored gold assets, with Bitcoin being called digital gold in its early days. Products like Tether Gold (XAUT) and Paxos Gold (PAXG) map ownership of physical gold in vaults onto the blockchain, transforming gold entitlements into digital tokens that can be held in on-chain wallets.
Tokenized assets for crude oil, agricultural products, and emerging categories like energy and computing power have an extremely low market share, and the industry is still in its infancy.
Looking at the distribution across underlying public blockchains, the tokenized asset ecosystem is more diverse. Ethereum, leveraging its DeFi first-mover advantage and institutional adoption foundation, remains the leader, hosting assets worth $15.7 billion, accounting for over half of the market.
The rest of the tokenized asset market is dispersed across multiple public chains: BNB Chain has a tokenized asset market size of about $4 billion, Solana about $2.2 billion, Stellar about $1.7 billion, the Bitcoin sidechain Liquid Network about $1.5 billion, while XRP Ledger, ZKsync Era, and Arbitrum each have tokenized asset sizes close to $1 billion.
The tokenized asset industry is not consolidated on a single public chain. Assets are distributed across major blockchain ecosystems based on transaction costs, liquidity, regulatory requirements, and business partnerships. However, the most telling data point is not the market size of tokenized assets... but how these assets are used.
Let's delve deeper—
Most Tokenized Assets Are Not Yet "Composable"
Market size is not the only key metric; the actual utility value of assets is more indicative.
Bonds are the largest category of tokenized assets by market cap, valued at $15.2 billion, but only 5% of the circulating supply is used in DeFi protocols, approximately $800 million. The utilization rate of tokenized precious metals is similarly low. Most tokenized assets are used merely for on-chain storage and have not yet become freely combinable, interconnected, reusable financial building blocks.
Smaller tokenized asset categories show a starkly different picture: tokenized reinsurance contracts, with a market cap of $362 million, have an on-chain protocol usage rate as high as 84%; private credit tokens have a usage rate of 33%. These two categories were designed from the outset to fit composable on-chain application scenarios. In contrast, top categories like Treasuries and gold are primarily positioned to simplify holding and transferring assets on-chain without altering their fundamental operational logic. This situation also highlights a core divergence within the tokenized asset industry: the degree of on-chain nativity varies greatly among different tokenized assets.
Some assets can be freely transferred and used across chains, while others merely use blockchain as an accounting tool, with limited asset transfer and composability functions. Currently, most tokenized assets are essentially just digitized assets, merely moving ledgers on-chain without unlocking composability potential. Composability is the core value of on-chain finance and a key to upgrading the financial system.
The Pantera Capital Token Native Index shows that over 70% of tokenized assets have the lowest level of on-chain nativity. A large number of tokens are merely digital certificates for offline physical assets, with actual asset control still relying on offline ledgers and intermediaries.
Currently, the tokenized asset industry is still in its early stages of development: one type is digitally recorded assets that are only formally on-chain, and the other is native on-chain assets that deeply integrate with blockchain properties.
The technical infrastructure for on-chain composition is already in place, and asset categories are gradually enriching, but deep integration and application are just beginning.
Future Trends for Tokenized Assets
Industry predictions for the long-term size of the tokenized asset market vary, but the overall consensus is that the market will continue to expand.
- McKinsey predicts the tokenized asset market will reach $2-4 trillion by 2030.
- Ark Invest estimates the tokenized asset market could be $1.1 trillion.
- Boston Consulting Group (BCG) in partnership with Ripple calculates the tokenized asset market will reach $0.94 trillion by 2030 and climb to $1.89 trillion by 2033.
- Standard Chartered forecasts the tokenized asset market could exceed $3 trillion by 2034.
Based on the above estimates, compared to the current market size of $34 billion, the tokenized asset market has potential for hundred-fold growth in the long term. Of course, the numerical differences don't stem from disagreements about adoption speed, but from different scopes of what is being measured. Each institution's statistical scope differs, covering varying asset classes, whether stablecoins and deposits are included, and the definitional boundaries of tokenization. For example: McKinsey focuses on bonds, credit, funds, and equities; Standard Chartered adds commodities and trade finance; BCG and Ripple additionally include deposits and stablecoins. Although statistical methods differ, the industry unanimously agrees that the scale of tokenized assets will see leapfrog growth.
Looking at the global financial landscape, the current size of tokenized assets remains minuscule.
- Global bond market size exceeds $140 trillion; tokenized bonds are only $15.2 billion, accounting for 0.01%.
- Global physical gold market cap reaches several trillion dollars; tokenized gold is $5 billion, accounting for less than 0.02%.
- Global equity market cap exceeds $100 trillion; tokenized stocks are $1.5 billion, accounting for only 0.001%.
Today, emerging sectors have steadily taken shape. Assets with clear pricing, stable demand, and simple ownership like U.S. Treasuries, gold, and private credit have been the first to go on-chain. Currently, tokenization has not yet disrupted the underlying nature of assets; it mainly optimizes settlement and transfer methods. The deep integration of assets with digital financial systems is still being explored.
Currently, tokenized assets remain more at the digitization level, where assets struggle to achieve programmable, composable applications. The industry's next phase faces hard challenges: bringing more complex parts of the financial system on-chain and integrating tokenized assets more deeply into composable, internet-native financial infrastructure.
