RWA Market Heats Up as Billions of Assets Are Added to the Mix

The race to tokenize all the things, from real estate to fine wine, is heating up. Once dismissed by its detractors as a fringe onchain use case that would fail to find product-market fit, the RWA industry has not only found all these essentials, but it’s rapidly breaking benchmarks on a regular basis. As billions of dollars in new assets pour in, all the things really are being tokenized. The only question that’s still to be definitively settled is who’s trading them – institutions or retail?Scarcely a week seems to go by without a new deal being inked between TradFi and DeFi players seeking to bring the assets of the old world onto the blockchain rails of the new. This week, it was the turn of Mavryk Dynamics to put pen to paper, securing an agreement to bring a whopping $3B of properties onchain. Its fellow signatories to the deal were Multibank and MAG, the investment firms who maintain major RE investments across the globe and are now willing to make a chunk of them tokenized and tradable.What’s interesting about the deal isn’t just the size of it but also the fact that it will be yield-generating. In other words, holders of the tokenized assets will be able to earn returns from the performance of the underlying properties, which include the prestigious Ritz-Carlton luxury hotel chain and a high-end Dubai property developer. Is this the sustainable yield we were promised in DeFi? It sure looks that way – particularly given that Mavryk seems intent on luring retail users to its Layer 1 chain in their droves.This ain’t no permissioned affair for a handful of institutional players to trade between themselves: it’s a full-blown RWA ecosystem in which everyone’s invited. Naturally, retail users will need to be verified to trade such assets just like the suits themselves, but that seems a small price to pay for the upside that comes from being able to gain exposure to real-world assets while enjoying all the benefits that come from operating within a DeFi framework. Who fancies borrowing against their tokenized property portfolio and then using the stablecoins to chase yield in other decentralized finance protocols?Their very name makes them sound like they were born to be tokenized and now they are in serious numbers. Treasury bills, or T-bills as they’re better known, are fast becoming one of the primary sources of RWA growth. At April’s TokenizeThis summit in New York, there was significant talk of tokenized T-bills, with STOKR CEO Arnab Naskar predicting that they’ll soon be a $1T market alone within the RWA economy.RWA data site RWA.xyz currently values tokenized US treasury debt at $6.6B, with almost half of this coming through BlackRock. BlackRock’s tokenized US fund and money market fund is seeing significant institutional interest, though CEO Larry Fink isn’t getting too carried away given that the roughly $2.5B in assets it’s brought onchain is still just a drop in the water compared to the $12 trillion portfolio it oversees.It’s easy to speak in the billions when discussing the RWA market, but quite how many billions remains a matter of contention. Other onchain sectors, such as liquid staking, are much easier to measure because their TVL is beyond dispute – currently $37B, according to DefiLlama, for the record. It’s more complex when it comes to RWAs, however, because there’s currently no real consensus on what constitutes a real-world asset.Do stablecoins collateralized by bonds count, for instance? What about things like Tether Gold? The answer to that question really depends on who you ask. For what it’s worth, DeFiLlama gives the sector a TVL of $11B, which accounts for around 10% of DeFi’s entire total value locked. Other sources place this figure considerably higher – by as much as 2x. But all sources appear to agree on this much: in the future, RWAs will command trillions, not billions of dollars in value, with reports predicting $19T will be tokenized by 2033.It will be interesting to look back and see just how accurate, or wildly optimistic/pessimistic that prediction was. (And for the record, it was ventured by Boston Consulting Group and Ripple, who know their stuff.) Back in the present day, with the infrastructure for RWA tokenization, from onboarding to compliance and issuance now in place, it’s simply a case of sitting back and watching as the TVL ticks higher and more real-world industries open up to the possibilities of onchain finance.$11B – or at best $22B – in TVL is a good start, but where the industry is headed next, those are gonna seem like rookie numbers.