RWA Market Capitalization

The merging of cryptocurrency with traditional asset classes such as fiat currencies, equities, government bonds, and real estate is witnessing remarkable growth. Our perspective has never been clearer: blockchains are evolving into the foundational infrastructure for all asset classes, with future applications that may exceed our current imagination. The tokenization of assets only became feasible with the advent of the Bitcoin blockchain, followed by Ethereum, which introduced a global computing platform for smart contracts. This, in turn, sparked a rapid expansion of various blockchain and distributed ledger technologies.
The total value of tokenized assets across public blockchains currently stands at $118.57 billion. Ethereum leads the pack, representing over 58% of this total, equivalent to $69.16 billion. It boasts the most dynamic ecosystem, with more than 6 million daily active users and nearly 6,000 monthly active developers. Ethereum prioritizes security and decentralization, supported by over 800,000 validators, while other blockchains focus on speed and scalability. Tron follows with over $45 billion in tokenized assets, and Solana ranks third with the fastest settlement time of 0.4 seconds.
In terms of adoption, there are approximately 560 million crypto users worldwide, representing about 7% of the global population. This level of crypto adoption is comparable to the internet adoption in 2000 when internet users accounted for 5.91% of the world’s population, totaling 361 million. Countries with high internet and banking penetration rates tend to have the highest percentage of crypto ownership. Currently, holders of tokenized assets constitute just over 10% of the estimated 431 million crypto users, amounting to around 47 million people.
Looking ahead to 2030, tokenization is expected to grow into a multi-trillion-dollar market opportunity. We project that the market value of tokenized assets could range between $3.5 trillion in a bearish scenario and $10 trillion in a bullish scenario by 2030. This estimate is based on the anticipated penetration of the total addressable market across various asset classes, including non-financial corporate debt, real estate funds, private equity, securities collateral, trade finance, and public debt securities.
Crypto’s Positive Feedback Loop
Decentralized blockchains are financially supported by their native tokens, which play a crucial role in coordinating stakeholders to secure the network and validate transactions. Unlike traditional internet protocols such as TCP/IP or SMTP, blockchain protocols like Ethereum and Bitcoin allow for direct investment in the network.
Miners and validators are rewarded with native tokens for confirming transactions and securing the network.
Users are required to pay transaction fees in the native token whenever they interact with the network. These tokens function similarly to digital commodities, akin to oil in the physical world.
As the network grows, with more use cases and applications being developed, the demand and value of the native token increase. This is comparable to how the U.S. dollar benefits from the economic strength of the United States and global trade activities.
Tokenization By The Numbers
Stablecoins, the first tokenized assets to achieve product-market fit, currently dominate the tokenization market, accounting for 96% ($87.57 billion) of the market share across Ethereum-compatible networks. Following stablecoins are commodities like tokenized gold and government securities, such as tokenized U.S. Treasuries.
It’s important to recognize that fiat-collateralized stablecoins are digital representations of fiat currencies, such as the U.S. dollar. Issuers of these stablecoins, like Circle and Tether, hold off-chain reserves of the underlying asset, predominantly in short-term U.S. Treasury bills and cash. The specific asset-to-liability ratio is managed by the issuer's asset-liability management strategies.
This data focuses on tokenization across selected blockchains, including Ethereum, Avalanche, Stellar, Arbitrum, Base, Polygon, Gnosis, and Optimism, as available on Dune Analytics as of August 26, 2024.
Trading Venues: Stablecoins
Tokenized assets are currently spread across numerous trading venues and channels, lacking a unified trading platform primarily due to regulatory uncertainties and insufficient shared infrastructure. Stablecoins, which dominate the tokenization market, are widely accessible and frequently traded on both centralized and decentralized exchanges.
As shown in the picture, stablecoin trading pairs now account for 70% of the total trading volume on decentralized exchanges. This marks a significant shift from early 2020, when Altcoin pairs (such as BTC/ETH) made up the majority, representing 60% of the volume. By 2024, the volume share for Altcoin pairs had decreased to 30%, underscoring the growing prominence of stablecoins in the market.
The Evolution of Financial Products: We’re in the Tokenization Era
In our opinion, tokenization is a significant breakthrough in financial innovation, on par with the introduction of mutual funds in the 1970s and ETFs in the 1990s. However, with the establishment of appropriate regulatory frameworks, its impact could be far more widespread, as it enables any asset to be digitally represented on the blockchain.
In 1971, William Fouse and John McQuown from Wells Fargo pioneered the first index fund, a concept that John Bogle later expanded to establish The Vanguard Group, a leading mutual fund company known for its low-cost index funds. The 1980s and '90s witnessed a booming bull market, making fund managers like Peter Lynch well-known figures.
In the 1990s and 2000s, exchange-traded products (ETPs) emerged as a significant advancement over mutual funds. Listed on exchanges and tradeable throughout the day, ETPs offered diversification at lower costs, with greater tax efficiency, transparency, and minimal management fees.
From the 2010s to the present, the rise of tokens has marked a new era in financial products. Unlike ETPs, tokens are tradeable 24/7, every day of the year. They are programmable through smart contracts, enabling automatic, rules-based rebalancing and even lower costs for investors.
Tokenization: A Multi-Trillion-Dollar Market
We project that the market value of tokenized assets could range from $3.5 trillion in a bear-case scenario to $10 trillion in a bull-case scenario by 2030. In our base case, we anticipate that tokenization will capture approximately 10% of the net assets of regulated open-end funds globally, which totaled around $70 trillion at the end of Q2 2023. In the bull case, we assume a compound annual growth rate (CAGR) similar to what has historically been observed in the growth of crypto ownership. The bear case is estimated to be about half of the base case value
Why Would a Traditional Business or Investor Want to Tokenize ?
Liquidity
The streamlined architecture of tokenization enhances liquidity provision, making it easier for assets to be bought, sold, and traded. This simplified structure improves access for end-users by lowering barriers to entry, facilitating a more dynamic and fluid market.
Accessibility
Tokenization significantly expands the reach of assets, providing global accessibility and enabling a broader range of investors to participate in markets that were previously restricted. This democratisation of access ensures that assets can be bought and sold across borders, reaching a more diverse and inclusive audience.
Settlement Efficiency
Tokenized assets benefit from faster settlement times, significantly reducing the operational costs and eliminating the need for multiple intermediaries. Automated execution via smart contracts ensures that transactions are completed more quickly and efficiently, minimising delays and potential errors.
Transparency
The blockchain’s immutable ledger offers a tamper-proof record of ownership that is publicly accessible. This transparency ensures that all stakeholders have a clear and consistent understanding of how tokenized assets are managed, governed, and transferred, fostering trust and accountability in the process.
Composability
One of the key advantages of tokenized assets is their ability to interact with other services within the same blockchain ecosystem. For example, a tokenized security can be seamlessly used as collateral in a lending marketplace, or to provide liquidity on a decentralized exchange. This flexibility allows for innovative financial products and services that leverage the interconnected nature of blockchain networks.
Interoperability
Tokenization supports the seamless transfer of assets and data across different blockchains, allowing for fluid interactions between diverse systems. For instance, if two financial institutions use different networks, such as Ethereum and Polygon, they can still exchange assets and information smoothly, ensuring compatibility and cooperation across various platforms. This interoperability is essential for creating a cohesive and integrated global financial system.
Conclusion
While use cases like stablecoins vividly demonstrate the transformative potential of tokenization, it’s important to recognize that we are still in the nascent, experimental phase of this innovation. The digital asset space is rapidly evolving, but it is far from reaching its full maturity. As this ecosystem continues to develop, it is poised to increasingly converge with the traditional financial system, much like how the Internet, once an experimental technology, has become an indispensable part of daily life over the past few decades.
Currently, holders of tokenized assets already make up more than 10% of the estimated 560 million global crypto users(according to Triple-A), signalling the growing traction of this technology. However, as blockchain and digital assets mature, we can anticipate a seamless integration with existing financial infrastructures. This integration will likely involve building robust bridges between the digital and physical worlds, enabling a broader range of real-world assets to be tokenized and traded on the blockchain.
In the near future, we expect to see crypto technologies merging with traditional financial software, enhancing functionalities, and creating more efficient, transparent, and accessible financial systems. This convergence is not merely a technological shift; it represents a fundamental transformation of the global financial landscape. As these technologies mature and regulatory frameworks become clearer, tokenization has the potential to scale into a multi-trillion-dollar industry, touching nearly every sector and impacting billions of people worldwide.
This growth will likely be fueled by the continued adoption of blockchain technology by financial institutions, governments, and businesses, driven by the advantages of improved efficiency, reduced costs, and enhanced security that tokenization offers. As a result, tokenization could redefine asset ownership, liquidity, and financial interactions on a global scale, ultimately becoming as pervasive and essential as the Internet itself.