In a recent Binance Research report examining the current state of real-world assets (RWAs) in crypto, findings highlight that the tokenization of RWAs is a rapidly growing sector with immense potential, currently representing the eighth-largest DeFi sector.
The blending of traditional finance (TradFi) with digital assets has been gaining prominence as large institutions enter the crypto space. Tokenization of RWAs, wherein off-chain financial assets are brought onto the blockchain, is an increasingly important component of this integration.
RWAs refer to tangible and intangible assets in the physical world (e.g., real estate, bonds, commodities), and their tokenization allows for increased efficiency, transparency, and reduced potential for human error in asset management. Tokenized RWAs are stored and tracked on-chain, enabling a wide range of possibilities and use cases.
As of September 1, the combined total value locked (TVL) of RWAs in DeFi is $1.3 billion, making it the eighth-largest sector tracked by DeFi Llama. Additionally, there have been significant increases in the number of RWA token holders, now surpassing 43,400.
Tokenizing illiquid assets is a lucrative market, with well-regarded organizations, such as the Boston Consulting Group, estimating that by 2030, the tokenization of global illiquid assets could present a $16 trillion business opportunity. As the RWA market continues to grow, regulatory developments will drive mainstream adoption while traditional exchanges facilitate secondary trading of RWAs.
The tokenization of real-world assets showcases substantial potential for blockchain technology, offering enhanced transparency and efficiency. As institutions adopt RWAs and explore their own private blockchains to tokenize assets, this development provides more stable and diverse collateral options within the DeFi space.