Source: Pantera Capital Research Report “Q1 2026 State of Tokenization”; Translation: Golden Finance Claw

Core Overview: Tracking 593 assets, the total tokenization market size reaches $320.6 billion. Today, all major banks have formulated tokenization strategies, but how many are truly building the infrastructure? How many are just superficial “newspaper on the web” efforts? We have created a Tokenization Status Portal and a Tokenization Maturity Index (TPI) to answer these questions.

The main contents of the report include: 1. Executive Summary: Current State of Tokenization — the Newspaper-on-the-Web Stage; 2. Introduction to the Tokenization Data Portal: Six Key Findings on the Gap Between Hype and Maturity; 3. Background and Motivation: Research Methodology; 4. Market Data; 5. Practical Guidelines for Tokenization; 6. Conclusions and Outlook.

I. Executive Summary

Current State of Tokenization: Newspaper-on-the-Web Stage

• Tracking Market Value: $320.6 billion (about $200.6 billion in 2024)

• Average TPI Score: 2.04 out of 5 (covering 542 operational assets)

• Hierarchical Distribution: 77.6% still in the packaging layer, 11.1% in the hybrid layer, only 2.7% native layer

Tokenization is the core narrative in institutional crypto by 2026. All major banks, custodians, and asset managers have laid out tokenization strategies, but market size alone cannot determine whether token assets are unlocking blockchain’s full potential or merely digitally packaging traditional finance.

This report covers 11 asset classes and 593 tokenized assets, totaling about $321.1 billion; based on Pantera’s Tokenization Maturity Index (TPI), 542 assets in operation are scored across three dimensions: issuance & redemption, transfer & settlement, complexity & composability. Each item is scored 1-5, and the average yields the comprehensive score.

Currently, the market’s overall TPI is only 2.04/5: 77.6% are packaging layer assets, 11.1% hybrid, and only 2.7% native. This framework does not deny current packaging products—they align with current user, issuer, and regulatory acceptance: familiar structures, strict controls, and incremental efficiency improvements in distribution, clearing, and access. The significance of TPI is not to judge the starting point but to identify the critical point where on-chain systems truly replace off-chain processes and token assets unlock functions that traditional infrastructure cannot provide.

Early internet media simply copied newspaper content onto websites, transmitting faster and covering broader audiences, but the form remained identical—just a different channel for old products. This cannot predict the future form of native internet media: podcasts, algorithmic recommendations, interactive visualizations, creator platforms, and other forms nonexistent in the print era.

Tokenization is currently in the newspaper-on-the-web stage: the $321 billion market proves assets can be distributed on-chain, but no native financial instruments defining the future of tokenization have yet emerged—programmable compliance, autonomous collateral management, real-time yield optimization, embedded governance, and splitting of asset risks and returns. These products cannot be simply packaged from off-chain assets; they must be created natively on-chain.

The internet’s evolution out of the newspaper stage was driven not by ideas but by product innovation: faster feedback loops, new user behaviors, novel monetization models, and forms only new media can carry. Tokenization will follow the same path: the next phase is not to put more assets on-chain but to create financial products that are more valuable because they are on-chain—real-time clearing, collateral optimization, programmable yield routing, code-based compliance, and new financial building blocks for ownership, cash flows, and risk splitting.

II. Introduction to the Tokenization Data Portal

To track the progress of tokenization beyond the initial stage, we launched the Tokenization Status Data Portal—an industry quarterly update dashboard. It integrates structured data from RWA.xyz, DeFiLlama, and others, combined with Pantera’s TPI methodology and asset-level scoring, illustrating the evolution across issuers, platforms, asset classes, and jurisdictions.

Core Features

Market Map: Displays token asset distribution across sectors, platforms, and public chains by value and total locked value (TVL).

Ecosystem Overview: An interactive map for browsing assets, platforms, and market categories.

Tokenization Maturity Index (TPI): Scores assets across three dimensions, showing the distribution of maturity in assets, value, and TVL.

Six Key Findings on the Gap Between Hype and Maturity

1. 91.1% of issuances are highly restricted: The average score in issuance & redemption is only 1.82 (the lowest among the three dimensions); among 542 assets, 494 score 1-2, with control over minting and redemption mainly managed by administrators and custodians.

2. 37.8% of assets circulate faster than they are issued: Transfer & settlement dimension performs best (2.29); 37.8% of assets score 3, indicating on-chain transfer is feasible, but on-chain is rarely the sole authoritative ledger (only 6.5% score 4-5).

3. 12% DeFi composability: Only 12% of assets have complexity & composability scores ≥3 (effective DeFi access threshold); stablecoins dominate in scale (locked value of $162M), with private credit (21.4%) and active strategies (19.6%) having the highest on-chain penetration among non-stable assets.

4. $131M in truly scaled stablecoins: The comprehensive TPI for stablecoins is about 2.67, significantly above the market average, making them the only asset class with large-scale economic value and effective on-chain utility.

5. 168 assets added in 2025, but infrastructure not deepened: 168 new assets in 2025 (vs. 78 in 2024), with total value rising from $200.6 billion in 2024 to $320.6 billion in 2026; asset count grows rapidly, but infrastructure depth remains insufficient.

6. Scale and maturity are beginning to correlate positively: At the asset class level, market size and average TPI show a visible positive relationship, but the correlation is still shallow; capital prefers more mature on-chain structures, but most assets remain in the mid-to-low maturity range.

III. Background and Motivation

All banks have tokenization strategies, but few have real infrastructure

BlackRock’s BUIDL Fund managed over $2 billion by April 2025; Franklin Templeton’s FOBXX launched on-chain in 2021; JPMorgan’s Kinexys processes billions daily. Headlines show rapid industry change, but these are superficial indicators.

Tokens on permissioned chains, requiring manual off-chain redemptions, not permitted to circulate without issuer approval, and not integrated with DeFi, are essentially no different from “traditional securities with blockchain receipts”—adding data layers but not changing asset operation logic.

This report proposes a framework distinguishing early-stage tokenization from functional on-chain market infrastructure: building a database of 593 token assets, scored by a unified standard, to answer core questions—how much has the tokenization market progressed? What proportion remains in the “newspaper on the web” stage?

The report targets digital asset leaders in banks and wealth management, helping them benchmark the market and build competitive barriers; it also offers insights for native crypto developers on asset categories and lifecycle opportunities.

IV. Methodology

Asset Lifecycle

We model the lifecycle of tokenized assets as a linear process. It begins with “Originate & Structure”—off-chain legal frameworks (entity setup, SPV/trust structures, registration, etc.). Currently, this stage is not included in scoring—not because it’s unimportant, but because it remains highly jurisdiction-dependent and standards are immature, making consistent global quantification difficult.

In the long run, this will change. As regulation clarifies and market structures standardize, legal design will become a key differentiator among tokenized products. How ownership is defined, transfer restrictions enforced, assets handled in bankruptcy, and redemption rights embedded in legal structures will become as critical as on-chain technical mechanisms.

Figure 1: Lifecycle of Tokenized Assets and TPI Dimensions

The three scored stages unfold sequentially from left to right: Mint & Burn (creation & destruction); Trade & Transfer (circulation and authoritative ledger); Deploy & Earn (automation infrastructure and DeFi integration).

Currently, we treat legal structure as background info, while TPI (Tokenization Progress Index) focuses on operational dimensions that can be compared across assets.

TPI’s Three Dimensions

Based on these stages, we evaluate assets’ autonomy and on-chain nativity across three aspects:

• Issuance & Redemption: Can assets be minted and redeemed via more autonomous, symmetric on-chain mechanisms?

• Transferability & Settlement: Is blockchain the authoritative layer for ownership management and settlement, or just a mirror of off-chain ledgers?

• Complexity & Composability: Can assets be further utilized via smart contract infrastructure and generate yields (composability)?

TPI scores each asset on these three orthogonal dimensions, each from 1 to 5. The overall score is the average of these three.

Scoring Framework: Definitions of Levels

This scoring system aims not to reward complexity for its own sake but to identify parts of the process that are truly replacing off-chain workflows with on-chain systems.

Each rubric measures a different aspect of progress:

• More symmetric and automated issuance & exit mechanisms;

• Blockchain becoming the authoritative layer for transfer & settlement;

• Assets deployable into programmable infrastructure and actively utilized.

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Three TPI Levels: Wrapper, Hybrid, and Native

To make TPI more intuitive at the market level, we categorize assets into three tiers based on their average TPI scores across the three dimensions. This taxonomy aims to translate detailed scores into a clearer view of where assets stand in their evolution from simple digital wrappers to fully native on-chain financial products.

The tiers are based on the combined average TPI score.

These thresholds do not imply that maturity will improve in a perfectly linear or uniform manner. Instead, they serve as a practical way to gauge how much of the asset lifecycle has truly migrated on-chain.

• Wrapper: Assets are mainly “digital receipts” of underlying assets. The assets are still managed off-chain—custody, redemption, and management occur outside blockchain. Blockchain may improve distribution efficiency or transparency but is not the authoritative operating layer.

• Hybrid: Some parts of the asset lifecycle have migrated on-chain—issuance, transfer, settlement, limited composability—but key functions still depend on off-chain intermediaries, legal processes, and manual controls.

• Native: Assets are designed to operate primarily on-chain. Issuance, transfer, settlement, and at least some ongoing management are governed by smart contracts, minimizing reliance on off-chain infrastructure.

This layered framework is an interpretive overlay on top of TPI scores, not a replacement. Two assets in the same tier may differ significantly in their reasons: one may excel in transferability but have weak redemption mechanisms; another may have high composability but operational limitations elsewhere. The tier labels summarize their market position, while detailed scores explain why.

V. Market Data

593 assets across 11 categories, tracking a market size of $320.6 billion

The analysis covers 542 scored assets out of 593 total; 51 assets are still in pilot or announcement stages, not yet officially launched, and thus not scored.

Asset data sources include RWA.xyz, DeFiLlama, protocol documentation, news, and research reports. TVL and AUM data are based on Q1 2026 figures from RWA.xyz and DeFiLlama. On-chain deployment data is verified via Etherscan, Solscan, Polygonscan, and Basescan contract audits.

By aggregating these sources, the report bridges different market value metrics—market cap, AUM, on-chain valuation—into a unified “market-value layer,” combined with project release dates, issuers, platforms, jurisdictions, and news metadata, forming a comprehensive asset database.

The report also uses DeFiLlama’s “Active DeFi TVL” metric to measure “productive TVL,” serving as a key basis for analyzing DeFi composability, inspired by Nexus Data Labs’ research.

Due to inconsistent classification across sources, standardizing asset categories was one of the most challenging parts of data construction. Ultimately, the market is divided into 11 categories:

The market remains in the “Wrapping” stage but is transitioning toward Hybrid

Approximately 77.6% of tracked assets are still Wrapper; only 11.1% reach Hybrid, and just 2.7% are Native. This indicates that tokenization has achieved scale in “representation,” but true on-chain native functionality remains limited. The current market focus is still largely off-chain, with some assets beginning to move deeper on-chain.

Stablecoins are the clearest exception and the most mature category: 14% of stablecoin assets are Native; they also have the largest Hybrid group and highest Native proportion. Next are Active Strategies and Private Credit.

U.S. Treasuries, commodities, and private equity are also beginning to develop Hybrid structures, but overall still rely heavily on Wrapper architectures.

RWA Infrastructure is a special category. While not a traditional asset class, it is scored via TPI. It includes many pilot and announced projects still under development, indicating that much of the RWA ecosystem’s infrastructure and legal frameworks are still being built.

2025 Tokenized Asset Issuance Hits Record High

In 2025, 168 new tokenized assets were issued, a 115% increase over 78 in 2024. The rapid growth from 2023–2025 reflects institutional FOMO. Nearly all large financial institutions are eager to launch their own tokenized products. However, the overall TPI has not significantly improved, meaning the market is “widening” but not “deepening.” Most new projects replicate Tier 1 Wrapper models rather than pushing the boundaries of on-chain financial infrastructure.

Data from Figure 3 clearly shows issuance is concentrated in a few categories, not evenly distributed. In the recent two full years—2024 and 2025—private credit leads with 48 issuances, followed by stablecoins (46), real estate (36), and U.S. Treasuries (32).

In terms of market cap, despite diversification in issuance categories, the overall market continues to expand rapidly: total tracked assets grew from about $200.6 billion in 2024 to $313.7 billion in 2025, reaching approximately $320.6 billion in early 2026.

This means that since 2024, the market has added about $120.5 billion, nearly 60% growth, further confirming that asset tokenization is expanding both in variety and in scale with compound growth.

Stablecoins dominate with $293 billion, accounting for 91.6% of total market cap

Stablecoins overwhelmingly lead in tokenized asset market value: out of the $320.6 billion total, stablecoins account for over $293 billion (~92%). Driven by institutional demand for yield assets on-chain, U.S. Treasury tokens have grown to about $12 billion.

Commodity tokens have also surged to about $7.1 billion, partly due to the 2025 gold spot rally: existing tokenized gold products’ value increased with underlying asset appreciation, not solely from new assets being issued.

Long-tail assets like private equity, real estate, and corporate bonds remain small in AUM. The market’s value is highly concentrated in the earliest mature asset classes, not in categories with the most announcements.

Institutional Push: U.S. Treasury Tokenization Reaches $120 Billion

U.S. Treasuries (hereafter “U.S. Debt”) are the most prominent success story in institutional asset tokenization: from nearly zero in 2021 to about $120 billion in 2026. This exponential growth is driven by declining DeFi yields, making tokenized U.S. debt a more attractive on-chain safe haven. Despite rapid growth, TPI analysis shows most U.S. debt tokens are still early-stage, mostly first-layer wrappers, with custodial redemption models and off-chain ledgers.

Growth is increasingly dominated by top-tier institutions rather than scattered smaller players. Leading tokenized U.S. debt products include:

• BlackRock: BUIDL, ~$2.1 billion, issued via Securitize

• Franklin Templeton: FOBXX / BENJI, ~$1 billion, issued by Benji Investments

• J.P. Morgan’s Centrifuge-based offerings: ~$1 billion

• WisdomTree: WTGXX, ~$752 million, via proprietary digital fund channels

• Fidelity: FDIT, ~$185B, issued internally

This indicates that tokenized U.S. Treasuries are the clearest on-ramp for institutional tokenization: even without fully mature native on-chain features, large firms are willing to bring short-term dollar products on-chain.

Institutional footprints are also extending beyond U.S. debt. In private credit, Apollo Asset has launched structured credit via Apollo Multi-Asset Securitization Fund (~$13.1 million); Centrifuge’s ecosystem includes structured credit tokens from J. H. Hendrix and Anemoy. In stablecoins, large banks like Société Générale’s FORGE issued EURCV, an early example of tokenized cash products. The overall trend is clear: big institutions are not starting from pure native DeFi structures but are first bringing their traditional financial products onto chain via compliant issuers like Securitize, Centrifuge, and Libra.

Growth Divergence: Some categories nearing saturation, others just emerging

Growth curves across categories show that market adoption is cyclical, not linear. Real-world assets (RWA) have existed in various forms for years, but the 2022 downturn made clear they cannot escape the broader crypto bear market. The current recovery is rapid: most major asset classes have regained upward momentum since bottoming, indicating tokenization is moving from scattered experiments to a more stable, sustainable market.

Stablecoins and active strategies were among the earliest and fastest-growing sectors in this cycle, but after a strong surge last year, their growth has slowed. In contrast, private equity and commodities have shown the strongest growth over the past two years and remain robust.

U.S. Treasuries and tokenized equities only gained momentum after 2022, but their growth has now plateaued, suggesting these categories are approaching saturation.

Real estate and non-U.S. government bonds are still in early adoption phases, with short histories and no clear long-term trend yet, but prospects are positive, and their asset bases are still building.

Corporate bonds appeared only in 2025 as a single data point, still early but with high growth potential. Their current size is small, but the trend is upward, making them a promising emerging sector.

Market size and TPI scores are beginning to correlate

A scatter plot of average TPI scores versus total locked value (log scale) shows a clear positive correlation: larger categories tend to have higher average TPI scores. Stablecoins lead in both metrics; U.S. Treasuries are also large and more mature than most non-stable categories.

On the other hand, real estate and private equity rank low in both size and maturity, confirming their reliance on off-chain legal structures, custody, and post-trade services. The correlation is trend-based, not strictly linear.

Commodities and private credit have accumulated significant market size but have not yet achieved high TPI scores. This indicates capital prefers more mature on-chain structures, but overall ecosystem maturity still lags behind scale.

91% of tokenized assets still use quasi-restrictive issuance & redemption

Score distribution shows most assets cluster in the low-score range across the three TPI dimensions, with issuance & redemption being the biggest bottleneck. Among 542 assets scored, 494 (91.1%) score 1 or 2 in issuance, indicating control by backend permissions—admin-controlled minting and custodian-mediated redemption remain dominant. Only 13 assets (2.4%) score 4 or 5, meaning fully automated, symmetric minting/burning models are still rare.

Transfer & settlement scores are more dispersed: 205 assets (37.8%) score 3, reflecting a growing group of assets with dual ledgers—transfer is possible on-chain, but blockchain is not yet the sole authoritative record.

Complexity & composability scores are more concentrated: 394 assets (72.7%) score 2, with only 21 (3.9%) reaching 4 or 5. This indicates most tokenized products are still simple wrappers, not deep programmable financial units. Appendix Figure 8.1 provides full distribution details by category.

Private Credit DeFi Utilization Ranks Highest at 64.3%

Breaking down TPI scores by asset class, stablecoins lead across all three dimensions, with transfer & settlement scoring as high as 3.2—reflecting multi-chain deployment and a maturing on-chain ledger trend. Tokenized stocks and U.S. Treasuries follow with balanced scores. Real estate and private equity score below 1.5, lagging significantly, indicating these assets are still in closed, off-chain platforms.

Appendix includes distribution charts for each asset class.

Among all categories, only 10.6% of assets have complexity & composability scores ≥3—this is the threshold for deep integration into DeFi ecosystems. It confirms that most tokenized assets, once on-chain, remain primarily as circulation wrappers rather than functional financial primitives.

Stablecoins still dominate in absolute scale, with about $26.4 billion locked in DeFi, far surpassing other categories. But internal penetration rates tell a different story: private credit has become the most DeFi-integrated asset class, with 64.3% of its market cap actively locked in DeFi; active strategies follow at 19.0%. In contrast, stablecoins’ DeFi penetration is only 9.0%, ranking much lower.

Private Credit DeFi Utilization at 64.3%

A key distinction: these two metrics measure different dimensions. TPI is an asset-level average score, while DeFi utilization is based on fund size. For private credit, even with a moderate TPI, the DeFi penetration can be very high.

This is partly due to industry concentration: private credit DeFi activity is dominated by a few protocols and products. For example, Maple’s syrupUSDT and syrupUSDC account for about two-thirds of the active locked value in this category. This shows that private credit’s on-chain composability is real, but the overall asset class has not yet achieved broad on-chain integration.

Another key reason is asset nature: these high-performing private credit products are yield-oriented, accepting stablecoins as collateral, naturally fitting DeFi yield strategies. Users can leverage and compound within multi-layer DeFi vaults, increasing returns. From this perspective, high utilization indicates that large, mature institutions are bringing their short-term dollar products on-chain, and that more native on-chain architectures can enhance asset utility. These assets provide low-correlation yield streams, adding unique value to crypto portfolios.

Active strategies show similar features. Their DeFi composability ranks second, but capital is concentrated in a few products. For example, Superstate’s crypto arbitrage fund accounts for about 80% of DeFi active lock value in this category, with most other assets in a handful of protocols like Re Protocol’s reUSDe, Midas’s mBASIS, and Resolv liquidity tokens.

In contrast, large categories like U.S. Treasuries and commodities have only 3.2% and 2.5% of their market cap in DeFi, respectively; real estate and corporate bonds’ DeFi utilization is near zero.

In absolute terms, stablecoins remain the most critical DeFi backbone, with about $26.4 billion locked, but most stablecoin supply is used for payments, trading, corporate treasury, and settlement, not for value-adding DeFi applications. Their low DeFi utilization is not because they are unsuitable as collateral but because their primary function is as a circulating medium, not an investment asset. Meanwhile, private credit and yield strategies are widely accepted as investment tools, gradually becoming mainstream collateral assets on-chain.

Tokenization Market Concentration Is Much Higher Than It Looks

As shown earlier, the actual concentration in the tokenization market is much higher than it appears. Even excluding stablecoins, the top five platforms account for about 50% of all assets evaluated. Securitize, focused on institutional issuance, leads with a cross-category AUM of $2.7 billion, followed by Maple (lending and U.S. debt), Tether (commodities), and Ondo (multi-asset). TPI scores vary significantly: Ondo averages 2.3, Securitize 1.6, with others like Robinhood and MetaWealth at 1.0, indicating these platforms are still mainly in the simple wrapper stage.

Regionally, the British Virgin Islands (BVI) dominate with $191.5 billion, mostly from USDT (which moved to El Salvador in 2025); Bermuda follows with $76.1 billion (24%), and the U.S. with $23.6 billion (7%). Notably, assets registered in the U.S. have an average TPI of 2.0, while assets issued in BVI and Liechtenstein (mostly compliant with S regulations) tend to score lower. Regulatory environment strongly influences the final tokenization structure: products regulated by the U.S. SEC tend to be simpler wrappers, while DeFi-native protocols in crypto-friendly jurisdictions tend to achieve higher TPI scores.

TPI Scores by Public Chain: Permissioned Chains Are Surprisingly Less Mature

Data shows that the underlying network architecture significantly impacts tokenization maturity. Public chains with better composability and more developed secondary markets tend to have higher TPI scores: Optimism and Base lead with scores around 2.6 and 2.5; Ethereum and Solana hover around 2.3. Conversely, more constrained networks like XRP Ledger have average TPI around 2.0.

Canton Network exemplifies this: backed by Digital Asset, adopted by Goldman Sachs and BNY Mellon, it is a permissioned chain with an average TPI of about 1.75—below the market average of 2.04. This is not due to poor execution but reflects design and market needs: permissioned chains prioritize compliance and access control over on-chain autonomy. Canton’s example confirms that permissioned blockchains, constrained by their architecture, tend to produce lower-maturity tokenization products—even with top-tier institutional backing.

VI. Practical Guidelines for Tokenization

Four-Stage Path: Wrap → Connect → Combine → Native

Most tokenization strategies are initially cost-cutting or efficiency-driven: streamlining back-office operations, shortening settlement cycles, automating reconciliation, and directly improving P&L. While this is a feasible path to unlock value, it is somewhat narrow.

A broader path involves leveraging tokenization to build new distribution channels and revenue streams—creating products that reach global pools of capital and diverse investors, serving needs that traditional infrastructure struggles to meet.

The TPI framework maps onto four stages of development. But it does not reveal the strategic inflection points within these stages: the first is passive, cost-driven; from the second to the fourth, institutions actively decide what kind of business to build.

Stage 1: Wrap (TPI 1-2)

The initial “version 0.1” of tokenization, a necessary but not final product. It requires rebuilding compliance: securities registration, transfer agents, custody frameworks, KYC/AML, tax, disclosure rules, etc. 88% of assets remain at this stage: tokens are just digital receipts, with lifecycle management relying on off-chain infrastructure, and on-chain only optimizing distribution. The risk: long-term stagnation in the wrapper layer, missing market evolution.

Stage 2: Connect (TPI 2-3)

A strategic fork: cost reduction vs. growth.

• Cost path: replacing pure off-chain with dual ledgers, whitelist circulation for controlled secondary markets, improving back-office efficiency but with a ceiling.

• Growth path: building new platform layers—integrating oracles, foundational smart contract governance, loosening on-chain circulation, and connecting new pools of capital.

Stage 3: Combine (TPI 3-4)

Token assets become the critical building blocks of finance: usable as on-chain collateral, integrated into risk management vaults, or combined into yield products not available in traditional markets. Only 12% of assets reach this stage; private credit and active strategies lead. Composability opens on-chain capital channels (DeFi investors, DAO treasuries, crypto funds), but risk management (transparency, isolation, real-time monitoring) must be strengthened.

Stage 4: Native (TPI 4-5)

Assets are created natively on-chain, with issuance, redemption, custody, settlement, and governance all governed by on-chain primitives; permissionless minting/burning, sovereign ledgers, autonomous risk engines, and governance without manual intermediaries. Currently, only protocols like MakerDAO’s USDS and Aave’s GHO reach this stage; representing the long-term goal for institutional tokenization.

VII. Conclusions and Outlook

Tokenization should be measured by actual outcomes, not superficial packaging

The industry has demonstrated that assets can be mapped onto the chain, but it has not yet proven that on-chain mapping fundamentally changes asset operation. There remains a large gap between official project launches and true tokenization maturity.

The next phase of market maturity depends not on the size of tokenized assets but on real application value and market demand:

• How fast can settlement be achieved—milliseconds?

• How low can transfer costs be relative to transfer amounts?

• How many on-chain wallets hold the asset?

• What is the daily transfer and trading volume?

• How much of the asset’s value is actively used in DeFi?

Institutions focusing on deep infrastructure—building autonomous issuance, on-chain ledgers, protocol composability—will create their own moat and lead the next wave of industry with real application and demand.

Tokenization is just the first step into a deeper track—what we truly explore are lending markets, asset management, product distribution, and capital formation, which are core to Apollo Group’s overall business.

In fact, I believe the real driver of asset tokenization is the presence of feasible commercial use cases. If you can deliver value that traditional assets cannot—whether in revenue generation or product distribution—that’s far more compelling than operational efficiency alone. Interestingly, operational gains are just an added bonus.

Christine Moy, Head of Digital Assets, Apollo Global Management

One key insight of this report is that the standard for measuring tokenization should not be whether an asset is simply on the blockchain, but whether it truly realizes the value promised by blockchain infrastructure. The original vision was clear: enable 24/7 transfer and settlement, cross-border operation, lower operational friction and intermediaries, and expand retail and institutional participation.

While progress has been made in asset representation and distribution, data shows many so-called tokenized products still do not meet these goals. Many are just superficial on-chain forms, still heavily reliant on off-chain processes. The real question now is not “has the asset been tokenized,” but “which parts of its lifecycle have become continuous, programmable, and native on-chain?”

The Most Valuable Use Cases Require Rebuilding, Not Copying

Many current tokenized products are still too close to traditional financial structures, limiting their true value. In some cases, tokenization should eliminate certain processes altogether. Escrow is a prime example: if funds can be held and released automatically via trusted smart contracts, the point of tokenization is not just to create a “digital escrow account,” but to reduce reliance on multi-layered custodial intermediaries. More broadly, the market needs to shift from “wrapping traditional processes onto the chain” to building new structures that leverage blockchain’s true advantages: programmability, atomic settlement, continuous markets, and shared state.

We must resist the impulse to simply replicate traditional financial infrastructure on-chain. We should recognize that on-chain finance and blockchain technology are fundamentally about disintermediation.

Traditional rules designed for centralized, intermediary-driven systems need to evolve as markets shift toward peer-to-peer, user-controlled custody, and decentralized networks.

Maxwell Stein, Director of Digital Assets, BlackRock Cross-Asset Markets

The Wrapper Market Is Not a Flaw, But a Regulatory Balance

This phenomenon is largely “designed.” Many products still in the wrapper stage reflect what clients, issuers, and regulators actually want: familiar financial structures, stricter controls, and incremental efficiency gains in distribution and settlement. Over 91% of assets still have permissioned issuance and redemption, not because the market is “behind,” but because current compliance frameworks assume financial processes require intermediaries. When securities issuance, custody, and redemption rules are built around licensed gatekeepers, administrators tend to prefer admin-controlled minting and custodian-mediated redemption—these are the safest options within regulatory boundaries.

Regional data supports this: U.S.-registered assets have an average TPI of only 2.0, and SEC-regulated products tend to be simpler wrappers. In contrast, assets issued in crypto-friendly jurisdictions like BVI or Liechtenstein (often compliant with S regulations) tend to score lower. Regulation actively shapes the final tokenization structure: products under U.S. SEC oversight tend to be simpler, while DeFi-native protocols in crypto-friendly jurisdictions tend to achieve higher TPI scores.

Permissioned Chains Have Surprisingly Lower TPI

Data shows that the underlying network architecture greatly influences tokenization maturity. Public chains with better composability and more developed secondary markets tend to have higher TPI scores: optimism-based chains (Optimism, Base) score around 2.6–2.5; Ethereum and Solana around 2.3. More constrained networks like XRP Ledger average about 2.0.

Canton Network exemplifies this: backed by Digital Asset, used by Goldman Sachs and BNY Mellon, it is a permissioned chain with an average TPI of about 1.75—below the market average of 2.04. This is not due to poor execution but reflects design and market needs: permissioned chains prioritize compliance and access control over on-chain autonomy. Canton confirms that permissioned blockchains, constrained by architecture, tend to produce lower-maturity tokenization products—even with top-tier institutional backing.

VII. Practical Guidelines for Tokenization

Four-Stage Path: Wrap → Connect → Combine → Native

Most tokenization strategies start with cost reduction and efficiency: streamlining back-office operations, shortening settlement cycles, automating reconciliation, and directly improving P&L. While feasible, this path is somewhat narrow.

A broader approach involves using tokenization to build new distribution channels and revenue streams—creating products that reach global pools of capital and diverse investors, serving needs traditional infrastructure cannot efficiently address.

The TPI framework maps onto four development stages. But it does not reveal the strategic inflection points: the first is passive, cost-driven; from the second onward, institutions actively choose what kind of business to develop.

Stage 1: Wrap (TPI 1-2)

Version 0.1 of tokenization, a necessary but not final product. It requires rebuilding compliance: securities registration, transfer agents, custody frameworks, KYC/AML, tax, disclosure rules, etc. 88% of assets remain here: tokens are just digital receipts, lifecycle management depends on off-chain infrastructure, and on-chain only optimizes distribution. The risk: long-term stagnation in the wrapper layer, missing market evolution.

Stage 2: Connect (TPI 2-3)

A strategic fork: cost reduction vs. growth.

• Cost path: replacing pure off-chain with dual ledgers, whitelist circulation for controlled secondary markets, improving back-office efficiency but with a ceiling.

• Growth path: building new platform layers—integrating oracles, foundational smart contract governance, loosening on-chain circulation, and connecting new pools of capital.

Stage 3: Combine (TPI 3-4)

Token assets become the critical building blocks of finance: usable as on-chain collateral, integrated into risk management vaults, or combined into yield products not available in traditional markets. Only 12% reach this stage; private credit and active strategies lead. Composability opens on-chain capital channels (DeFi investors, DAO treasuries, crypto funds), but risk management (transparency, isolation, real-time monitoring) must be improved.

Stage 4: Native (TPI 4-5)

Assets are created natively on-chain, with issuance, redemption, custody, settlement, and governance governed by on-chain primitives; permissionless minting/burning, sovereign ledgers, autonomous risk engines, and governance without manual intermediaries. Currently, only protocols like MakerDAO’s USDS and Aave’s GHO reach this stage; representing the long-term goal for institutional tokenization.

VIII. Conclusions and Outlook

Tokenization should be judged by actual results, not superficial packaging

The industry has shown that assets can be mapped onto the chain, but it has not yet proven that on-chain mapping fundamentally changes asset operation. There is a large gap between official launches and true tokenization maturity.

The next phase of market maturity depends not on the size of tokenized assets but on real application value and market demand:

• How fast can settlement be achieved—milliseconds?

• How low can transfer costs go relative to transfer size?

• How many on-chain wallets hold the asset?

• What is the daily transfer and trading volume?

• How much of the asset’s value is actively used in DeFi?

Institutions focusing on deep infrastructure—building autonomous issuance, on-chain ledgers, protocol composability—will create their own moat and lead the next wave of industry with real application and demand.

Tokenization is just the first step into a deeper track—what we truly explore are lending markets, asset management, product distribution, and capital formation, which are core to Apollo Group’s overall business.

In fact, I believe the real driver of asset tokenization is the presence of feasible commercial use cases. If you can deliver value that traditional assets cannot—whether in revenue generation or product distribution—that’s far more compelling than operational efficiency alone. Interestingly, operational gains are just an added bonus.

Christine Moy, Head of Digital Assets, Apollo Global Management

One of the core insights of this report is that the standard for measuring tokenization should not be whether an asset