Real-world asset (RWA) protocols have emerged as one of decentralized finance's (DeFi) clear winners in 2025, overtaking decentralized exchanges (DEXs) to become the fifth-largest category by total value locked (TVL), according to data from DefiLlama. RWAs now account for approximately $17 billion in TVL, a significant increase from roughly $12 billion in Q4 2024. This growth highlights the rapid transition of tokenized Treasurys, private credit, and other real-world claims from niche experiments to core DeFi infrastructure.
DefiLlama noted that "At the start of this year, they weren’t even in the top 10 categories." Vincent Liu, Chief Investment Officer at Kronos Research, explained to Cointelegraph that this growth is being driven by "balance-sheet incentives rather than experimentation," with higher-for-longer interest rates making tokenized Treasurys and private credit attractive as on-chain, yield-bearing assets. Improving regulatory clarity is also lowering friction for institutional allocators.
Earlier in 2025, RWAs excluding stablecoins had grown to roughly $24 billion, with private credit and tokenized Treasurys identified as the main growth engines. Ethereum remains the dominant public settlement layer for on-chain debt and fund structures. However, data from RWA.xyz shows a second tier of networks capturing market share, including BNB Chain, Avalanche, Solana, Polygon, and Arbitrum, each holding low-to-mid single-digit percentage shares of public-chain RWA value.
In parallel, permissioned infrastructure like the Canton Network has become a major institutional hub, hosting over 90% of the total market share. It provides a privacy-preserving, regulated environment for large RWA programs that can integrate with DeFi data and liquidity rails.
Tokenized US Treasurys remain the gateway product, with platforms like the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), Circle’s USYC, Franklin Templeton’s BENJI, and Ondo’s OUSG pushing the combined tokenized Treasury segment above the multi-billion-dollar mark by December. Liu stated that "the constraint is no longer tokenization itself, but liquidity, and integration into TradFi." He added that attention in 2026 should shift from headline TVL to control, usage, ownership of issuance, deployment of RWAs as collateral, and which venues capture secondary market flow.
Rallies in gold and silver are adding momentum to the RWA trade, pulling more capital into tokenized commodities. Recent data puts the tokenized commodities market cap near $4 billion, led by gold products such as Tether Gold and Paxos Gold. Liu said these moves are "elevating [tokenized commodities] from niche RWAs to macro-relevant assets with real demand for on-chain access and settlement in a 24/7 market."
Looking ahead to 2026, Jesse Knutson, Head of Operations at Bitfinex, forecasts that emerging market economies will be a key driver for RWA tokenization. He explained that these markets face persistent friction in capital formation and can "leapfrog" legacy infrastructure by adopting digital rails, including stablecoin settlement, more quickly. Knutson projects the tokenized RWA total market capitalization will swell to several trillion dollars over the next decade, though growth depends on major issuers moving from pilot programs to commercial products.
Despite the positive outlook, challenges remain, including the legal enforceability of on-chain contracts, ensuring sufficient liquidity for settlement, creating investor protection frameworks, and establishing uniform interoperability standards between different blockchain networks and platforms.
