The market for tokenized real world assets is jetting into bigger valuations as more institutions take treasuries, funds, private credit, and commodities onchain. The DWF Labs shared a report with The Coin Headlines on Tuesday with a rather noteworthy insight. The report claimed that 90 percent of $31 billion in tokenized assets are laying idle on blockchains, functionally dead.
What the digital asset market maker said in its report was that institutional investors have already migrated over $31 billion worth of traditional assets onto public blockchains. Out of this massive figure, less than 10 percent is actively circulating in the DeFi ecosystem.
To substantiate its claims, the report claimed that while the tokenization boom is real, U.S. Treasury funds like BlackRock’s BUIDL clock just under 30 transfers a month, despite holding billions in assets.
The lack of infrastructure to support make these assets tradeable at scale, DWF Labs said, is a major bottleneck restricting secondary market liquidity and preventing tokenized assets from achieving their true utility within DeFi.
“Liquidity is the binding constraint on scaling tokenization onchain. Solve that, and tokenization becomes a wider market story instead of an institutional one.” said Andrei Grachev, Managing Partner, DWF Labs.
Glacial pricing, broken redemption, and regulatory compliance gates have been named as the three primary structural roadblocks keeping this institutional capital away from circulation.
The report highlighted that heftier assets like private credit and real estate presently hinge on slow daily pricing updates making it difficult for market makers to quote tight, real-time prices. Additionally, the report called the present situation of onchain liquidity too thin to cater to large institutional orders leaving over-the-counter markets are highly fragmented.
While protocols like Maple Finance, Pyth, and Redstone have been acknowledged in the report for wrapping tokenized credit to accumulate billions in TVL, eploying 24/7 pricing infrastructure, and support tokenized equities and commodities and addressing the limitations.
Source: DWF Labs
“In the future, most value won’t accrue to whoever issues the most assets, it’ll accrue to whoever makes them liquid and tradeable. From the desk, the gap is obvious: when a tokenized Treasury can be priced in real time and redeemed instantly, a market maker can quote it tighter with size. The infrastructure layer that closes that spread is where the next phase of value capture sits, and most of it is being built right now,” Grachev added.
Source: DWF Labs
The report also stressed that revising strict KYC rules and investor whitelists could smash this hard ceiling, finally unlocking these idle tokens into permissionless DeFi protocols.
Founded in 2022, DWF Labs serves as the client-facing venture capital and market-making unit of of Digital Wave Finance headquartered in Abu Dhabi, UAE.
