a16z: 7 Charts to Understand How Tokenization Changes the Nature of Assets

_This article is from: _a16z crypto

Compiled by｜Odaily Planet Daily (@OdailyChina); Translator｜Moni

Tokenized assets, also known as "Real-World Assets (RWA)," are transforming the form of assets, their liquidity methods, and the construction of the financial system.

Just last month, the market size of tokenized assets surpassed $30 billion, currently stable around $34 billion (excluding stablecoins). This scale is roughly comparable to a regional bank or a top university endowment fund, although still very small compared to the global financial system, it is enough to have a tangible impact.

It is important to note that two years ago, the market size of tokenized assets was less than $3 billion, but then the market underwent a dramatic change: the US GENIUS Act brought clearer regulatory frameworks for stablecoins, institutional-grade on-chain infrastructure gradually matured, and many financial institutions began deploying blockchain technology around the same time—driven by these factors, the tokenized asset market grew tenfold in less than two years. (Note: Although stablecoins are not included in the above statistics, they have significantly contributed to overall market growth by greatly simplifying on-chain payments and settlements.)

This article will analyze the reasons behind the rise of tokenized assets and their future directions using 7 diagrams.

Tokenized Assets Take Off: US Treasuries Become the Largest Growth Driver

U.S. Treasuries are the main driving force behind recent growth in the tokenized asset market.

The advantages of tokenized U.S. Treasuries are clear and straightforward: investors can hold stable, interest-bearing assets in digital form, enabling more efficient and flexible trading; financial institutions can improve settlement and collateral transfer efficiency, smoothly connecting with digital financial markets.

Crypto investors can also leverage tokenized Treasuries to activate idle stablecoins and earn returns from traditional currency markets. Asset management giants like BlackRock and Franklin Templeton are strategically entering this space, creating a market worth hundreds of billions.

It is worth noting that the growth rates of various tokenized assets differ greatly, due to both the technical and compliance difficulties of bringing different assets on-chain, and the market acceptance after product deployment.

• Asset-backed credit assets are growing rapidly, mainly including home equity credit tokens, lending vault tokens, reinsurance contracts, Bitcoin mining receipts, and other specialized financial assets, reaching a market cap of $40k within two years.
• Venture capital assets took over seven years to surpass $110k in market value. Active strategy assets have a similar cycle; these assets are complex in structure, have long investment cycles, and higher operational and regulatory thresholds.
• On-chain issuance of government bonds and commodities is progressing steadily, surpassing $1 billion in market value within 2-3 years, now becoming mainstream categories.

At the beginning of 2024, government bonds and commodities almost monopolize the entire tokenized asset market. After 2024, the share of credit, specialized financial products, and stocks will steadily increase, but market concentration remains high. Currently, U.S. tokenized Treasuries and commodities together account for about two-thirds of the market share.

Tokenized Asset Market Segmentation

The tokenization of commodities is highly concentrated within the sector, with gold tokens dominating the majority of the market. The total size is about $5.1 billion, with gold tokens alone reaching $5 billion. Silver and other categories of tokens only amount to $57.6 million, less than 0.01%.

Gold naturally fits the tokenized asset model, and at present, the commodity token market is mainly led by gold. This is because gold has a global standard, easy storage, and low wear-and-tear, and has long relied on equity certificates for trading.

Moreover, crypto market investors have historically favored gold assets, with Bitcoin being called "digital gold" early on. Products like Tether Gold (XAUT) and Paxos Gold (PAXG) map the ownership of vault gold onto the blockchain, converting physical gold rights into digital tokens that can be held in on-chain wallets.

The market share of tokenized assets in crude oil, agricultural products, energy, and computing power is very low, as these industries are still in their infancy.

From the perspective of underlying blockchain deployment, the ecosystem of tokenized assets is more diverse. Ethereum, leveraging its early advantage in decentralized finance and institutional deployment, remains the leader, supporting an asset scale of $15.7 billion, accounting for over half of the market.

Other tokenized assets are spread across multiple blockchains: BNB Chain tokens amount to about $4 billion, Solana approximately $2.2 billion, Stellar around $1.7 billion, Bitcoin sidechain Liquid Network about $1.5 billion, and XRP Ledger, ZKsync Era, and Arbitrum each have close to $1 billion in tokenized assets.

The industry does not unify tokenized assets onto a single blockchain; instead, assets are distributed across various ecosystems based on transaction costs, liquidity, compliance requirements, and business partnerships. However, the most telling data point is not the market size of tokenized assets but how these assets are used.

Let’s continue the analysis—

Most tokenized assets currently lack “composability”

Market size is not the only key indicator; the actual application value of assets is more meaningful.

Bonds are the largest category of tokenized assets, with a market cap of $15.2 billion, but only 5% of the circulating volume is used in DeFi protocols, roughly $800 million. The utilization rate of precious metal tokenized assets is similarly low; most are only stored on-chain and have not yet become modular financial building blocks that can be freely combined and reused.

In contrast, niche tokenized asset classes perform very well: reinsurance tokens with a market cap of $362 million have an on-chain protocol usage rate of 84%; private credit tokens have a usage rate of 33%. These two asset types were designed from the start to be compatible with on-chain composability. In comparison, top-tier tokenized assets like government bonds and gold mainly serve to simplify on-chain asset holding and transfer, without fundamentally changing their original operational logic. This highlights a core industry divergence: the native on-chain degree of different tokenized assets varies widely.

Some assets can be freely transferred across chains and used in applications, while others only use blockchain as an accounting tool, with limited transfer and composability functions. Most current tokenized assets are essentially digital representations of assets, merely migrating records onto the chain without unlocking the potential for asset combination. And the ability to compose assets is the core value of on-chain finance and a key to upgrading the financial system.

Pantera Capital’s native token index shows that over 70% of tokenized assets are at the lowest level of on-chain native integration. Many tokens are just digital certificates of offline physical assets, with actual control still relying on offline ledgers and intermediaries.

The tokenized asset industry is still in its early stages: some are merely digital records of assets, while others are deeply aligned with blockchain’s native features.

The infrastructure for on-chain asset combination is well-developed, and the variety of assets is gradually expanding, but deep integration and application are just beginning.

Future Trends of Tokenized Assets

Industry forecasts for the long-term size of the tokenized asset market vary, but all agree that the market will continue to expand.

• McKinsey predicts the market will reach $2-4 trillion in the 2030s;
• Ark Invest estimates the market at $11 trillion;
• Boston Consulting Group combined with Ripple projects the market will reach $9.4 trillion by 2030 and $18.9 trillion by 2033;
• Standard Chartered predicts the market will break through $30 trillion in 2034.

Based on these estimates, compared to the current $34 billion market size, the long-term growth potential of tokenized assets could be hundreds of times larger. Of course, the difference in figures is not due to differing industry adoption speed forecasts but due to varying statistical standards. Different institutions include different asset categories, whether stablecoins and deposits are counted, and how they define tokenization. For example: McKinsey focuses on bonds, credit, funds, and stocks; Standard Chartered adds commodities and trade finance; Boston Consulting and Ripple also include deposits and stablecoins. Despite these differences, industry consensus is that the tokenized asset market will experience exponential growth.

Looking at the global financial landscape, the current size of tokenized assets remains tiny.

• The total global bond market exceeds $140 trillion, with tokenized bonds only at $15.2 billion, accounting for 0.01%;
• The global physical gold market is worth trillions of dollars, with tokenized gold at $5 billion, less than 0.02%;
• The global stock market exceeds $100 trillion, with tokenized stocks at $1.5 billion, only 0.001%.

Today, emerging sectors are gradually taking shape. U.S. Treasuries, gold, and private credit—assets with clear pricing, stable demand, and simple ownership—are leading the way onto the chain. Currently, tokenization has not yet fundamentally changed the underlying properties of assets but mainly optimized settlement and transfer methods, with deep integration into digital financial systems still in exploration.

Most tokenized assets remain at the digitalization stage, with assets difficult to be used in programmable, composable applications. The next phase of industry development will face a tough challenge: bringing more complex parts of the financial system onto the chain and integrating tokenized assets more deeply into composable, internet-native financial infrastructure.