We are in the midst of a blockchain revolution that is reshaping the world as we know it. Asset tokenization, one of the most transformative applications of blockchain technology, is poised to bring about $16.1 trillion in tokenized asset value by 2030.
In this blog, we explore the development of the real-world asset (RWA) tokenization industry since 2018 and highlight four essential charts that capture the trends and advancements of the RWA sector in 2024.
The Evolution of the RWA Industry
Since 2018, the Real-World Asset (RWA) tokenization landscape has grown from a nascent concept with limited infrastructure and investable products to a thriving industry in 2024, attracting major players like BlackRock and Franklin Templeton with their RWA-focused funds. DeFi leaders, including Coinbase with its Project Diamond, are also stepping into the RWA space, integrating with major platforms.
Back in 2018, the industry was known as the Security Token Offering (STO) sector, struggling with a lack of robust infrastructure, technology, and licensed players to enable compliant issuance and trading of RWA tokens. Fast forward six years, and we see a dramatic shift. Initially, many players built on private blockchains, operating like isolated systems disconnected from the broader digital asset ecosystem.
Today, the debate between public and private blockchains has evolved significantly. The focus has shifted towards public protocols as the preferred foundation for RWA token issuance. We've also witnessed the emergence of "permissioned public" blockchains, a hybrid model that combines the best of both worlds.
For a deeper dive into these dynamics, check out our piece "Startups versus Incumbents in the RWA Era," where we explore the advantages and disadvantages of public and private blockchains and their impact on the businesses built on them.
The Rise of Public Protocols for RWA Tokenization
Across the RWA industry, there is a noticeable increase in the adoption of public protocols for issuing RWA tokens. To interact with these tokens, investors must use digital currencies like stable coins or other cryptocurrencies, marking a significant shift toward the "real use case" of blockchain technology. This change is driving the creation of innovative products and services within the RWA space.
Back in 2018, our commitment to building on public chains was met with skepticism. However, the convergence of digital assets today validates that decision, as we witness the formation of new types of value and exchange. Major Wall Street leaders now advocate for the issuance of real-world assets on public chains. For example, BlackRock’s $260 million RWA fund is issued on Ethereum, and Franklin Templeton's CEO has likened tokenization to "securitization on steroids."
Public chains also bring a crucial advantage in terms of transparency. On-chain data storage ensures all stakeholders have visibility, enabling trust and collaboration. With integrations across several leading public chains, we believe public blockchains unlock the true potential of RWA tokenization.
4 Charts Illustrating the Growth of the RWA Tokenization Market
Here are four key charts that illustrate the explosive growth of the RWA tokenization market across various asset classes:
#1: Fiat-backed Stablecoins Dominate the RWA Market
Fiat-backed stablecoins, especially those pegged to the USD, lead the RWA market by market value. The top three USD stablecoins—Tether (USDT), USD Coin (USDC), and Dai (DAI)—constitute 95% of the market, with USDT alone at $96.1 billion.
#2: The Rise of Commodity-backed Tokens
The market cap of commodity-backed tokens surpassed $1 billion in 2024, with gold-backed tokens like Tether Gold (XAUT) and PAX Gold (PAXG) making up 83% of this segment. Innovative tokens, such as those representing uranium, are also gaining traction.
#3: Tokenized Treasuries Surge Amid DeFi Yield Decline
As DeFi yields plummeted in 2023, tokenized treasuries became the preferred choice for investors seeking exposure to rising U.S. Treasury bill rates. The market surged by 782% from $104 million in January 2023 to $917 million by year-end.
#4: On-Chain Loans and Real-World Asset Firms Lead the Way
In early 2024, the majority of active on-chain loans were facilitated by real-world asset firms. Despite a sharp decline in market value after the collapse of firms like Terra, 3AC, and FTX, the market has rebounded, with active loans increasing by 60% to $439 million by the end of 2023, led by private lending platforms like Centrifuge and Goldfinch.
The information above is sourced from CoinGecKo’s 2024 RWA report. You can view the full report here.
Looking Ahead: The Future is Tokenized
The financial landscape is experiencing a seismic shift. Traditional private markets, while secure, often face challenges such as high minimum investments and limited liquidity. Digital asset securities, powered by blockchain technology, offer a compelling alternative.
The growth of digital asset securities, or real-world asset tokenization (RWA), is transforming private markets. According to Statista, revenue in the digital assets market is expected to reach $112.1 billion by 2028.
The future is clear:
- $112.1 trillion: Projected revenue in the digital assets market by 2028 (Statista).
- $16.1 trillion: Expected market value of tokenizable assets by 2030 (Boston Consulting Group).
- $20 billion: Potential annual savings in global clearing and settlement costs with tokenization (BCG).
Curious to learn more about the future of real-world asset tokenization? Check out IX Swap's updates.
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