Real-world asset (RWA) tokenization protocols have experienced significant growth over the past year, with the total value locked (TVL) in the sector reaching nearly $8 billion by the end of April. This growth can be attributed to the market’s increasing preference for high-yield, debt-based investments. RWA protocols have seen a resurgence in popularity fueled by market demand for these types of investments. The TVL in RWA protocols has surged by almost 60% since February, indicating a rapid pace of growth within the sector. It is important to note that this figure excludes fiat-backed stablecoins like Tether and USD Coin, encompassing various areas including carry trade protocols, yield-bearing stablecoins, commodities, securities, and real estate tokenization protocols.
In addition to the TVL growth, RWA protocols have also seen an increase in active users. Data from Dune Analytics shows a surge in popularity among smaller retail users, highlighting the growing adoption of RWA protocols. Some protocols, such as Toucan, KlimaDAO, and Propy, have played a significant role in driving growth in terms of active users. Tokenized treasuries have also seen notable expansion as yields remain high in an environment of elevated inflation and interest rates in the United States. The RWA.xyz platform reported a record $1.29 billion locked in tokenized U.S. treasuries and bonds, representing an 80% surge since the beginning of 2024. Protocols like Securitize and Ondo have contributed to this growth.
The performance of protocols like BlackRock’s Ethereum-based Institutional Digital Liquidity Fund (BUIDL) and the Franklin OnChain U.S. Government Money Fund (FOBXX) has played a crucial role in bolstering the RWA market. BUIDL has become the world’s largest tokenized treasury fund, driving further interest and investment in the sector. Both public and private blockchains are seeing the inclusion of various assets, with examples such as Franklin Templeton’s U.S. Government Money Fund expanding from Stellar to Polygon, Backed Finance launching a tokenized short-term U.S. treasury bond exchange-traded fund (ETF), and UBS Asset Management deploying a tokenized money market fund (MMF) on the Ethereum blockchain. DigiFT, a Singapore-based fintech company, has also entered the digital asset realm with the launch of its US Treasury bill depository receipt (DR) tokens, offering investors fractional ownership in US Treasury bills without the need for substantial upfront capital.
The RWA sector’s growth is evident in the impressive surge in TVL within the protocols. DeFiLlama, a decentralized finance analytics platform, shows a substantial 700% growth in protocol TVL since the beginning of 2023, although the $8 billion figure may differ slightly. Toucan, KlimaDAO, and Propy are just some of the protocols driving this growth, particularly among active users. Tokenized treasuries have also seen significant expansion as yields remain high amidst current economic conditions. The inclusion of various assets in both public and private blockchains further illustrates the increasing adoption of RWA protocol technology. The performance of leading protocols like BUIDL and FOBXX has been instrumental in attracting investor interest and contributing to the overall growth of the RWA market.
