The tokenization market has swelled to $321 billion in tracked value, yet the vast majority of assets still operate as little more than digital wrappers for traditional finance. A new report from Pantera Capital puts the industry's on-chain maturity at an average of just 2.04 out of 5, a figure that underscores how far the sector is from realizing its promise of continuous settlement and full composability.
Digital wrappers dominate
Pantera's Tokenization Progress Index (TPI) scored 542 tokenized assets across issuance, transferability, and composability. More than three-quarters — 77.6% — function as digital wrappers around legacy infrastructure. Only 11.1% qualified as hybrid, and a mere 2.7% achieved native status. New tokenized asset launches climbed 115% in 2025, but most simply replicate old structures.
Issuance scored the worst of the three metrics, averaging 1.82 out of 5. An overwhelming 91.1% of assets rely on gated minting and custodian-mediated exits. Just 13 products have autonomous mint-and-burn functions.
Composability still rare
Only 12% of scored assets reached the threshold for meaningful DeFi composability. Public chains like Optimism and Base outscored permissioned networks such as Canton, which averaged 1.75. The composite TPI average of 2.04 reflects an industry that has grown in value — tracked value rose roughly 60% to $320.6 billion from $200.6 billion in 2024 — but not in sophistication.
Stablecoins carry the weight
Stablecoins account for $293 billion, or 91.6% of total tracked value, and posted a higher average TPI of 2.67. That's still below the halfway mark on the five-point scale. Outside stablecoins, private credit stands out as the category with the most DeFi penetration — 21.4% of its value is already active on-chain.
Tokenized U.S. Treasuries have crossed $15 billion, driven by products from BlackRock, Franklin Templeton, and Fidelity Investments. But they still depend on off-chain ledger structures. Excluding stablecoins, the top five platforms — including Securitize, Maple Finance, and Ondo Finance — hold roughly half of all scored assets.
What comes next
Pantera argues the next phase of tokenization will be judged not by total value but by utility metrics: settlement speed, transfer costs, trading activity, and capital actively deployed in DeFi. With issuance and composability scores still low, the industry's maturation hinges on moving beyond digital wrappers to assets that genuinely function on-chain.
