a16z: 7 Charts to Help You Understand the Tokenization Boom

Author: Robert Hackett, a16z crypto special editor; Source: a16z crypto; Translation: Shaw, Golden Finance

Tokenized asset markets—also often called real-world asset (RWA) markets— exceeded $30 billion last month, remaining around $34 billion thereafter, excluding stablecoins. This size is comparable to a regional bank or top university endowment fund, with actual market influence, but still relatively small compared to the global financial system.

By mid-2024, the tokenized asset market size was less than $3 billion. Since then, industry growth has sharply accelerated: The US GENIUS Act was implemented, stablecoin regulatory rules became clearer; institutional-grade on-chain infrastructure matured; many financial institutions completed blockchain pilots and officially launched commercial systems. Although stablecoins are not included in this statistic, they greatly simplified on-chain payments and settlement processes, supporting industry growth.

Driven by multiple factors, the tokenized asset market has surged tenfold in less than two years.

Tokenization Experiences Explosive Growth

US Treasury assets are the core driver of recent market size increases.

Their appeal is clear and intuitive: investors can hold these familiar income-generating assets efficiently and flexibly in native digital form; institutions can improve settlement and collateral asset circulation, better connecting to digital financial markets.

For crypto investors, Treasury tokenization products can activate idle stablecoins and earn yields from traditional money markets. Asset management firms like BlackRock and Franklin Templeton responded quickly to market demand, creating a market worth billions of dollars around this category.

The growth rates of various tokenized assets vary widely, reflecting both the difficulty of bringing different assets on-chain and the varying market acceptance of early products.

Asset-backed credit, including tokenized home equity lines of credit and lending vault tokens, reached a market cap of over $1 billion in just 185 days since the first on-chain transaction, far outpacing all other tokenized asset categories.

Specialized financial assets rank second in growth, including tokenized reinsurance contracts, Bitcoin mining bonds, etc., surpassing $1 billion in less than two years.

Venture capital assets grew the slowest, taking over seven years to reach $1 billion; active strategy assets took a similar amount of time. These assets are more complex in structure, have longer investment cycles, and face higher operational and regulatory challenges.

Government bonds and commodity tokenization have grown relatively quickly, surpassing $1 billion within two to three years, now becoming mainstream categories. Early 2024, these two nearly accounted for the entire tokenized asset market.

Since 2024, markets for asset-backed credit, specialized financials, stocks, and active strategies have steadily increased their share, but industry concentration remains high. Currently, tokenized US Treasuries and commodities together account for about two-thirds of the market.

Deep Dive into the Tokenized Asset Market

The commodity sector also exhibits high concentration: gold nearly dominates the entire share, with a tokenized size of about $5 billion, while the total commodity token market is around $5.1 billion. Silver and other categories are minimal, totaling only $57.6 million, just 0.01%.

Gold is naturally well-suited for tokenization: it has a global standard, is easy to store, resistant to loss, and is traditionally traded as a rights certificate. Crypto investors have long favored gold assets; even before gold tokens appeared, Bitcoin was already called “digital gold.” Products like Tether’s XAUT and Paxos’ PAXG have migrated the established gold holding model onto blockchain, turning vault gold ownership certificates into tokens stored in digital wallets.

Oil, agricultural tokens, and emerging categories like energy and computing power have very low market shares and are still in early stages. Currently, gold dominates the commodity token market.

The blockchain ecosystems supporting various tokenized assets are diverse. Ethereum, leveraging its DeFi and institutional application advantages, remains dominant, with related assets totaling $15.7 billion, slightly over half of the market.

Other tokenized assets are distributed across multiple blockchains: BSC network with $4 billion, Solana with $2.2 billion, Stellar with $1.7 billion, Liquid Network (Bitcoin sidechain) with $1.5 billion. XRP Ledger, ZKsync Era, and Arbitrum each have close to $1 billion.

Due to transaction costs, liquidity, compliance requirements, and business partnerships, tokenized assets are not concentrated on a single chain but are gradually spreading across major blockchain ecosystems.

However, the most valuable aspect is not market size but the actual use cases of these assets.

Most Tokenized Assets Have Not Achieved Composability

Bonds are the largest tokenized category, with a market cap of $15.2 billion, but only about 5% (roughly $800 million) is used in decentralized finance protocols.

Precious metal tokens also have low utilization, with most assets stored only in on-chain accounts, not used as composable financial components for expansion, restructuring, or cross-asset linking.

Niche categories perform quite differently. Reinsurance tokens, with a market cap of only $362 million, have 84% of their assets invested in DeFi protocols, while private credit tokens see 33% on-chain application.

This clear logic: the categories with the highest DeFi usage from the start are designed to be compatible with on-chain composability, with protocols like Nexus Mutual and Maple Finance. In contrast, core tokenized assets like Treasuries and gold primarily aim for convenient on-chain holding and transfer, without fundamentally changing their operational models.

This difference reflects a deep segmentation in the tokenized asset market:** the native on-chain degree of various assets varies significantly.**

Some assets can circulate freely and be used across different chains; many others are merely stored on blockchain as proof of ownership, with limited transfer and composability. For example, data platform RWA.xyz classifies assets into distributed assets and certificate-based assets.

Most current so-called tokenization is essentially digital proofing: assets are just recorded on-chain without unlocking their composable value. But composability is a core advantage of on-chain financial systems, greatly expanding financial service capabilities.

Other analyses of on-chain asset attributes also reach similar conclusions. Pantera Capital’s token-native index, which assesses how well assets fit into on-chain ecosystems, shows over 75% of assets are rated at the lowest level. In practice, these tokens mostly serve as digital certificates, with the underlying real assets still managed off-chain by custodians and intermediaries.

Some assets are merely digital replicas on-chain, with an external shell; others deeply leverage blockchain’s unique features to operate natively on-chain. The gap between these two illustrates that the industry is still in early development.

While the infrastructure and underlying assets for supporting portfolios are in place, deep integration and practical application are just beginning.

Future Directions for Tokenized Assets

Industry forecasts vary, but there is a consensus on continued growth:

McKinsey’s baseline predicts the market will reach $2 trillion to $4 trillion by 2030. Ark Invest estimates $11 trillion. BCG and Ripple forecast $9.4 trillion by 2030, rising to $18.9 trillion by 2033. Standard Chartered projects over $30 trillion by 2034.

All major forecasts suggest the industry could grow a hundredfold from the current ~$30 billion size. The main disagreement lies in the scope of measurement.

The difference between $2 trillion and $30 trillion is not due to differing adoption speeds but rather different definitions: which asset classes are included, whether stablecoins and deposits are counted, and how tokenization is defined. McKinsey mainly includes bonds, loans, funds, and stocks; Standard Chartered also includes commodities and trade finance; BCG and Ripple include deposits and stablecoins alongside traditional assets.

Despite methodological differences, all agree on the overall trend: the asset tokenization market will expand significantly.

Compared to the total global financial volume, the current tokenized asset market remains tiny. The global bond market exceeds $140 trillion, but tokenized bonds are only about $15 billion, just 0.01%. The global circulating gold value is in the trillions, with tokenized gold around $5 billion, less than 0.02%. Global stock market capitalization exceeds $100 trillion, with tokenized stocks about $1.5 billion, only 0.001%.

This emerging market is gradually taking shape. Assets with clear pricing, stable demand, and simple ownership structures—like Treasuries, gold, and private credit—are among the first to successfully transition on-chain and become popular categories.

Currently, tokenization has not fundamentally reshaped the assets themselves but has only changed their circulation and settlement methods. Deep integration with digital financial infrastructure is still in early stages. Most of the market remains at the digital proofing level, without true on-chain composability. Many assets, though operating on blockchain, cannot yet serve as programmable financial building blocks.

The industry will face greater challenges ahead: pushing more complex assets onto the chain and deeply integrating tokenized assets into an internet-native financial system with composability features.