Tokenized real-world assets have swelled to a combined $27.5 billion in value, yet only a sliver of that sum — roughly $1.7 billion — is actually being used in decentralized finance. The numbers, drawn from on-chain data, reveal a market that's growing fast but remains heavily concentrated in traditional investment structures rather than the DeFi protocols that originally fueled the tokenization hype.
Treasuries hold the line
The vast majority of reserves backing tokenized RWAs come from government treasuries. That makes sense: treasuries are liquid, low-risk, and familiar to institutional investors who've been the main drivers of tokenization. The typical tokenized fund holds short-term U.S. Treasury bills or equivalent sovereign debt, providing a stable base for the asset's value. For now, that stability appears to be the priority over yield chasing.
Credit products carry the yield
When it comes to generating returns, credit products are the workhorses. Tokenized private credit, corporate bonds, and structured debt instruments account for the bulk of yield strategies tied to these assets. The pattern mirrors the traditional fixed-income world — lenders get paid for taking on credit risk — but wrapped in blockchain rails that promise faster settlement and fractional ownership. The catch: most of this activity still happens in permissioned environments, not on open DeFi markets.
Why DeFi gets the scraps
Only about 6% of tokenized RWA value circulates inside DeFi protocols. The reasons aren't mysterious. DeFi's lending pools and decentralized exchanges require liquid, programmable assets, but many tokenized RWAs carry restrictions on transferability or rely on off-chain custody. The regulatory fog around tokenized securities also keeps major issuers cautious. Until the infrastructure allows these assets to move freely within smart contracts — and regulators give clearer signals — the vast majority of the $27.5 billion will sit in wallets, not pools.
The question that hangs over the space is whether the next wave of tokenization will close that gap or widen it. A few projects are already building wrappers that let treasuries and credit tokens interact with DeFi automatically, but adoption remains early. For now, the market has a treasury problem — in the good sense of abundant reserves — and a DeFi problem that no one has fully solved.
