Tokenizing real-world assets

Tokenized Real-World Assets to Reach Trillions

Tokenized of real-world assets (RWAs) are rapidly gaining traction, transforming the financial landscape. By leveraging blockchain technology, tokenization is transforming how we perceive ownership and investment in physical assets like real estate, art, and commodities. This article explores why tokenized RWAs are soaring and what it means for the future.

Understanding Tokenized Real-World Assets

What Are Tokenized RWAs?

Tokenized RWAs involve converting physical assets into digital tokens on a blockchain. Each token represents a share of the underlying asset, allowing for fractional ownership. This process democratizes access to high-value investments, traditionally available only to wealthy individuals or institutional investors.

The Rise of Tokenized RWAs

Several factors contribute to the soaring popularity of tokenized RWAs:

1. Increased Accessibility

Tokenization lowers the entry barriers for investing in high-value assets. By breaking assets into smaller, tradable units, more people can invest according to their financial capacity. For instance, instead of purchasing an entire property, investors can buy fractions of it, enabling broader participation in the real estate market.

2. Enhanced Liquidity

Traditional assets like real estate or fine art are typically illiquid, meaning they cannot be easily sold or exchanged for cash. Tokenization enhances liquidity by allowing fractional ownership, enabling quicker and easier transactions. Investors can trade their tokens on secondary markets, providing flexibility and access to funds when needed.

3. Transparency and Security

Blockchain technology ensures transparency and security in transactions. Each tokenized asset is recorded on a blockchain, providing an immutable ledger of ownership and transactions. This reduces the risk of fraud and enhances trust among investors. As Brad Garlinghouse, CEO of Ripple, states, “Blockchain can streamline processes, reduce costs, and provide greater security and transparency.”

Market Growth and Performance

The RWA market has grown significantly, with a total value locked (TVL) reaching $8 billion this year, excluding non-yield-earning stablecoins. Real-world assets currently tokenized on blockchains include private equity, real estate, government securities, commodities, and other financial obligations​ (Ticketmaster Business)​.

The popularity of tokenized RWAs in decentralized finance (DeFi) surged as bond yields in traditional finance surpassed low-risk DeFi yields during the bear market of 2022 to 2023. The United States Federal Reserve’s aggressive interest rate hikes made U.S. Treasury yields competitive with DeFi stablecoin yields despite their much lower risk. As of June 13, the one-year Treasury bill offers a three-month average yield of 5% to 5.24%, while Aave has variable annual percentage returns on stablecoins ranging from 3.73% to 7.46%​ (Ticketmaster Business)​​ (​.

Future Implications of Tokenized Real-world Assets

The rise of tokenized RWAs holds significant implications for the future:

1. Democratization of Investment

Tokenization democratizes access to investments, allowing individuals from diverse economic backgrounds to participate. This inclusivity can drive economic growth and reduce wealth disparities. According to a report by Deloitte, “Tokenization could unlock trillions of dollars in currently illiquid assets.”

2. Global Market Expansion

Tokenized assets can be traded globally, transcending geographical boundaries. This opens up new investment opportunities and allows for a more diversified portfolio. As Perianne Boring, Founder and President of the Chamber of Digital Commerce, notes, “Tokenization has the potential to create a more inclusive and efficient global financial system.”

3. Innovative Financial Products

The tokenization of RWAs can lead to the creation of innovative financial products and services. For instance, decentralized finance (DeFi) platforms can leverage tokenized assets to offer lending, borrowing, and staking services. This can further enhance liquidity and provide new income streams for investors.

Examples of Tokenized RWAs in Action

Several projects and platforms are already showcasing the potential of tokenized RWAs:

1. Real Estate

Platforms like RealT and Lofty AI allow investors to purchase fractional ownership of properties through tokens. This provides investors with rental income and potential appreciation in property value.

2. Art

Maecenas and Masterworks offer tokenized shares of fine art pieces, enabling investors to own a portion of valuable artworks. This not only democratizes art investment but also provides artists with new funding avenues.

3. Commodities

Platforms like Perth Mint Gold Token and Digix offer tokenized gold, allowing investors to buy, sell, and trade gold-backed tokens. This brings liquidity to the precious metals market and offers a secure store of value.

4. Luxury Goods

Luxury goods, such as high-end watches, designer handbags, and rare collectibles, rare wines and spirits are also entering the tokenization space. Platforms like 4K enable investors to purchase fractions of luxury items, providing access to high-value assets that were previously out of reach for most. This not only democratizes luxury investments but also adds liquidity to a traditionally illiquid market by allowing these assets to be traded in secondary markets.

Market Performance and Institutional Involvement

The tokenized RWA market hit an $8 billion market cap, with several protocols capitalizing on higher borrowing costs and subdued DeFi activity by offering tokenized U.S. Treasuries and private loans. In early June, the average annual percentage yield for such tokenized private loans was 9.57%. The TVL of RWA projects reached their current $8 billion capitalization as the crypto market recovered with new institutional activity in 2024​ (Ticketmaster Business)​.

Asset management giant BlackRock has entered the space and quickly became the largest provider of tokenized U.S. Treasuries with its BUIDL fund. Upon launch, it instantly gained a market cap of $180 million and has now reached $462.27 million. At 30% market share, it is the largest issuer of tokenized Treasuries, surpassing Franklin Templeton’s Benji Investments fund, which had been leading for a long time​ (Ticketmaster Business)​.

Tokenized Real-World Assets Performance and Returns

The growth of the RWA market is evident not only in TVL but also in the token performance of related projects. In May, RWA tokens gained 55.20% and rose 224.57% year-to-date. Tokens contributing most to this impressive number include TrueFi, Ondo, Dusk, Clearpool, and TokenFi​ (Ticketmaster Business)​​ (​.

To evaluate the risk-adjusted year-to-date performance of RWA tokens, Cointelegraph Research calculated their daily Sharpe ratios, a measure of excess return per unit of risk. Using the daily returns from Jan. 1 to May 31, the Sharpe ratios for RWA tokens were as follows:

  • Ondo: 4.78
  • TokenFi: 2.66
  • TrueFi: 1.88
  • Dusk: 1.4
  • Clearpool: 0.4

For comparison, the Sharpe ratios for Bitcoin and Ether were 1.37 and 1.36, respectively​ (Ticketmaster Business)​.

Challenges and Considerations

While the future of tokenized RWAs looks promising, several challenges need addressing:

1. Regulatory Uncertainty

The regulatory landscape for tokenized assets is still growing. Clear guidelines and frameworks are needed to ensure investor protection and market stability. As noted by the World Economic Forum, “Regulators must balance innovation with risk management to foster a healthy ecosystem for tokenized assets.”

2. Technological Integration

Seamless integration between traditional financial systems and blockchain technology is crucial. This requires collaboration between tech developers, financial institutions, and regulators to build a robust infrastructure.

3. Market Education

Educating investors and stakeholders about the benefits and risks of tokenized RWAs is essential. Increased awareness and understanding can drive adoption and foster a more informed investment community.


The soaring popularity of tokenized real-world assets marks a significant shift in the financial landscape. By enhancing accessibility, liquidity, and transparency, tokenization democratizes investment and paves the way for a more inclusive financial system. As the technology and regulatory frameworks evolve, tokenized RWAs are poised to transform traditional markets and unlock new opportunities for investors worldwide.

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