Editor's Pick 01-05-2024 11:03 6 Views

RWA Tokenization Protocols Experience Explosive Growth, Surpassing $8 Billion in TVL

Real-world asset (RWA) tokenization protocols have witnessed a remarkable surge over the past year, with the total value locked (TVL) in the sector reaching a new milestone. 

According to blockchain analytics and research firm Messari, the TVL for RWA protocols soared to nearly $8 billion by the end of April.

The significant growth in the RWA sector can be attributed to the market’s increasing preference for high-yield, debt-based investments. 

The analytics firm noted that RWA protocols have experienced a remarkable resurgence, driven by this market demand.

TVL in RWA Protocols Surge by 60% Since February


It’s important to note that the $8 billion TVL figure excludes fiat-backed stablecoins like Tether and USD Coin. 

Instead, it encompasses various areas such as carry trade protocols, underwriting, yield-bearing stablecoins, commodities, securities, and real estate tokenization protocols.

The TVL in RWA protocols has surged by almost 60% since February, indicating the rapid pace of growth within the sector. 

DeFiLlama, a decentralized finance analytics platform, shows a slightly lower TVL figure of $6 billion, but still showcases a staggering 700% growth in protocol TVL since the start of 2023.

In addition to the TVL growth, RWA protocols have also witnessed an increase in active users. 

Dune Analytics data revealed a surge in popularity among smaller retail users, highlighting the growing adoption of RWA protocols.

Toucan and KlimaDAO Drive Growth in RWA


Some protocols have played a significant role in driving this growth, particularly in terms of active users. 

Digital carbon market platforms like Toucan and KlimaDAO, as well as the real estate tokenization protocol Propy, have experienced substantial user growth.

Tokenized treasuries have also seen remarkable 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 such as Securitize and Ondo have contributed heavily to this growth.

The recent performance of 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, with BUIDL becoming the world’s largest tokenized treasury fund.

It is worth noting that both public and private blockchains are witnessing the inclusion of various assets.

Some of the more notable examples include 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.

Back in March, DigiFT, a Singapore-based fintech company, also announced that it has made a foray into the digital asset realm with the launch of its US Treasury bill depository receipt (DR) tokens. 

The DR tokens offer investors fractional ownership in the underlying US Treasury bills, enabling investors to gain exposure to the traditionally secure US debt market without the need for substantial upfront capital.

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