Tokenized RWA market hit $53B but only 11% is actively deployed in DeFi; bonds and money market funds dominate but lack utility due to whitelisting and low yields.
DeFi & Yields ·
The tokenized real-world asset market expanded 276% year-over-year to reach $53 billion, yet only $6.07 billion—approximately 11%—is actively deployed across blockchain applications. Growth metrics remain robust, with the sector up 29.7% over the past month and 40.9% over three months, but the majority of capital remains dormant after moving onchain. Bonds and money market funds constitute 57% of the total tokenized RWA market, though just 2.8% of that segment is deployed as productive capital in DeFi protocols.
Structural barriers limit asset mobility and utility. Major financial institutions including BlackRock, Franklin Templeton, and WisdomTree issue whitelisted tokens that restrict transfers to pre-approved addresses. BlackRock's BUIDL token, for instance, requires holders to clear an allowlist managed by Securitize, and onchain transfers lack legal effect until an offchain transfer agent reconciles the transaction. This constraint prevents tokens from functioning as collateral.
Incentive misalignment also dampens deployment. Traditional finance offers minimal yield for secured lending—approximately 0.05% annually for tokenized equity—reducing motivation to move assets. Private credit emerges as an exception, representing roughly 10% of the tokenized RWA market with 51% deployed in DeFi, suggesting that higher-yield opportunities may drive greater onchain utilization across other asset classes.