Real-world asset (RWA) protocols have emerged as one of decentralized finance’s strongest performers in 2025, overtaking decentralized exchanges to become the fifth-largest DeFi category by total value locked (TVL).
The shift highlights how tokenized Treasurys, private credit, and commodities are evolving from experimental use cases into foundational onchain financial infrastructure.
Data from DefiLlama shows RWA protocols now hold roughly $17 billion in TVL, up from around $12 billion in the final quarter of 2024. At the start of the year, RWAs were not even among DeFi’s top ten categories, highlighting the speed at which institutional-grade assets are gaining traction onchain.
According to Vincent Liu, chief investment officer at Kronos Research, the momentum behind RWAs is less about experimentation and more about balance-sheet logic. Elevated interest rates have made tokenized US Treasurys and private credit appealing as onchain, yield-generating instruments, while improving regulatory clarity has reduced barriers for institutional participation.
RWAs move into DeFi’s core
Beyond stablecoins, the broader RWA market has expanded rapidly. Earlier this year, RWAs excluding stablecoins reached approximately $24 billion in value, driven primarily by private credit and tokenized government debt.
Ethereum has maintained its position as the dominant public settlement layer for these structures, hosting the majority of onchain debt instruments and tokenized fund vehicles.
While Ethereum continues to lead, RWA activity remains concentrated among a relatively small group of large issuers. Data from RWA.xyz shows a secondary tier of public blockchains, including BNB Chain, Avalanche, Solana, Polygon, and Arbitrum, each capturing low- to mid-single-digit shares of total public-chain RWA value.
Alongside public networks, permissioned infrastructure is playing a growing role. Some platforms have become key hubs for institutional RWA issuance, accounting for the majority of the market in environments designed to meet regulatory and privacy requirements. These systems are increasingly interoperable with DeFi liquidity and data layers, allowing institutional assets to connect with onchain markets without fully exposing sensitive transaction details.
What’s driving capital inflows
Tokenized US Treasurys continue to act as the primary entry point into RWAs.
Products such as BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), Franklin Templeton’s BENJI, Circle’s USYC, and Ondo’s OUSG have helped push the tokenized Treasury segment into the multi-billion-dollar range by the end of 2025.
Liu argues that the main bottleneck is no longer the technical ability to tokenize assets, but rather liquidity and integration with traditional financial systems. Looking ahead, he expects attention to shift away from headline TVL figures and toward questions of control and usage, who issues RWAs, how they are used as collateral, and which venues capture secondary market trading.
Commodities add a new dimension
Rallies in gold and silver are also injecting fresh momentum into the RWA sector.
Tokenized commodities now account for close to $4 billion in market capitalization, led by gold-backed products such as Tether Gold and Paxos Gold. These instruments have expanded alongside rising spot prices, reinforcing demand for onchain exposure to precious metals.
Liu notes that clearer standards around pricing and custody are helping elevate tokenized commodities from niche products to assets with broader macro relevance. As metals prices approach new highs, he expects a feedback loop to emerge: price appreciation drives issuance, issuance attracts liquidity, and liquidity accelerates adoption beyond yield-focused narratives.
Looking toward 2026, interoperability is likely to be a critical factor. The next phase of growth, Liu suggests, will come when tokenized commodities and other RWAs can move seamlessly across blockchains and trading venues, functioning as neutral, widely accepted collateral rather than isolated, single-platform products, according to Cointelegraph.
