The year 2023 proved to be a watershed moment for tokenization, as it emerged as a dominant force reshaping our understanding of real-world assets. Tokenization of Real-World Assets (RWAs) involves converting physical assets, such as real estate, commodities, or other tangible assets, into digital tokens on a blockchain.
In this blog, we will unravel the key statistics, major protocols, and future outlook, providing a comprehensive view of the transformative trends that define the intersection of traditional assets and cutting-edge technology.
Key Statistics
- Category wise TVL of tokenized assets (Excluding fiat-backed stablecoins)
Commodities dominate the RWA market landscape with a TVL of ~ $971 million followed by government securities which have amassed a TVL of ~ $759 million. Real Estate and Asset backed finance have also attracted significant TVL during the year amounting to $189.16 million and $363.58 million as at the date of writing.
- Total Value Locked
The total value locked in leading RWA protocols surged significantly in 2023 and reached a new peak in October ‘23. MakerRWA registered a record TVL of $3.12 billion and also emerged as a leader in this category with a share of ~ 51.8%, closely followed by StUSDT with a share of ~42.4%.
- Tokenized Government Securities by Protocols
In terms of tokenizing government securities like T-bills, Franklin templeton leads the pack with a huge market share of ~ 40.9% followed by Ondo Finance which has a ~ 21.9% market share. Matrixdock and Hashnote are closely behind with 14.8% and 5.8% share respectively.
Key RWA Projects
Maker RWA: MakerDAO had been exploring the use of RWAs for several years, and in 2022, they began to actively invest in RWA-backed vaults. With a TVL of ~ $2.78 billion, Maker secures a substantial 70-80% of its revenue from stability fees tied to Real-World Assets (RWAs). Its diverse RWA portfolio includes various assets like investment-grade bonds, Treasury bill ETFs, and business loans, bolstering the stability and income generation within the MakerDAO ecosystem.
Ondo Finance: This platform has been gaining significant and consistent traction, supported by its TVL growth as shown below. As of writing, Ondo Finance’s TVL is ~ $198 million. Ondo Finance invests into the BlackRock iShares fund, enabling stablecoin holders to tap into earn yield on their assets. This works by exchanging users’ stablecoins for USD, which is then used to purchase assets, and new fund tokens that reflect these investments are minted and deposited into the user’s wallet.
MatrixDock: It is a digital assets platform offering institutional and accredited investors transparent access to tokenized RWAs, ensuring immutable ownership records, daily Proof-of-Reserve, and complete bankruptcy remoteness. The TVL in MatrixDock surged to ~ $113 million during 2023. The Matrixdock STBT token represents the U.S. Treasury bills (T-bills), providing investors with secure access to the U.S. government’s risk-free rates within their digital assets platform.
Future Outlook
Progress made in 2023 has paved the way for substantial on-chain advancements, primarily driven by major financial players entering the space. The involvement of TradFi giants like Hamilton Lane and JP Morgan in crafting tokenized funds is likely to attract more institutional capital in this sector.
This trend of tokenizing assets is likely to transcend traditional boundaries to include bonds, equities, and novel asset classes such as art, automobiles, commodities, and fine wines.
Notably, Asia stands as a beacon in this landscape, with governments in regions like Hong Kong and Thailand actively reshaping regulations to embrace the potential of tokenizing real-world assets. Their proactive stance not only supports innovation but also serves as a model for other governments seeking to foster growth and development through tokenization.
The emerging trajectory indicates an impending multi-trillion dollar market for asset tokenization by 2030, highlighting a significant shift towards digitalized financial products and governments playing pioneering roles in shaping this burgeoning landscape.
Crypto Outlook 2024
2023 was a roller-coaster ride for the crypto sphere, marked by dynamic shifts, innovative advancements, and transformative trends that reshaped the industry’s landscape. Our Crypto Outlook Report for 2024 reflects on the highs, lows, and pivotal moments that defined the past year, while also peering into the horizon to forecast the exciting potential and emerging patterns set to influence the year ahead, with insights from industry leaders at Stepn, Enjin, Hacken, SuperScrypt, and more.
Click here to read the full report!
