ME News Report, May 27 (UTC+8), a16z crypto published an article pointing out that not all tokenized assets are being fully utilized on the chain. Bonds are currently the largest category of tokenized assets, with a market cap of $15.2 billion, but only about 5% of the supply is used in DeFi; precious metals are similar, although they are on-chain, most are idle.

In contrast, smaller categories perform differently: reinsurance tokens have 84% of their supply deployed in DeFi, and private credit at 33%. a16z believes this makes sense because the categories with the highest DeFi usage from the start were built specifically for DeFi, such as Nexus Mutual and Maple Finance.
a16z points out that many practices currently called tokenization are actually closer to digitization, meaning recording is moved onto the blockchain but without unlocking many new features, and one of the core value propositions of on-chain financial systems is composability.