RWAs Boom as Layer-1 Blockchains Ignite $18.9T Tokenization Surge

Franklin Templeton explains as follows: If 50,000 transactions are processed in the traditional financial system, the fees alone amount to about $50,000.

However, when they utilized Stellar to tokenize RWA (Real-World Assets) and manage operations, the cost of processing 50,000… pic.twitter.com/IuWATLpEpJ

— Dao world (@Koreanteacher1) January 4, 2025

For an institution like Franklin Templeton that manages $1.7 trillion in assets, such efficiency gains could likely reshape operational economics.

Moving forward, Dixon shared that Stellar aspires to power $3 billion in RWA value on-chain within this year alone. She explained that Stellar has set specific goals around new partnerships to ensure this.

For example, Dixon pointed out that investment firm Societe Generale-Forge has launched its EUR-backed stablecoin (EURCV) on the Stellar network. In addition, asset management firm Ondo has plans to launch its yield-bearing stablecoin, the United States Dollar Yield (USDY), on Stellar in the coming months.

Dixon also mentioned that Etherfuse is bringing “stablebonds” to the Stellar network, which will offer asset-backed products designed to hold value and provide potential returns.

Avalanche Plans To Partner With TradFi Institutions

L1 blockchain Avalanche is also seeking to drive billions into the tokenized RWA market. Morgan Krupetsky, senior director of business development, institutions, and capital markets for Ava Labs, told Cryptonews that Avalanche’s primary mission has been to digitize and tokenize the world’s assets.

“Avalanche was purpose-built for this next generation of blockchain-enabled finance,” Krupetsky remarked. “The network has high throughput, sub-second finality, low transaction costs, and customizability, making it an ideal foundation for real-world asset (RWA) tokenization, trade, and transfer at internet scale.”

Asset management firm WisdomTree recently expanded its institutional investment platform, WisdomTree Connect, to include 13 tokenized funds across various blockchains, including Avalanche.

“We are committed to cultivating a high-quality tokenized asset ecosystem by deepening relationships with large, reputable asset managers and issuers,” Krupetsky remarked.

She added that Avalanche plans to expand the diversity and scale of tokenized RWAs on the network. This includes offering stablecoins and other cash equivalents to stocks, bonds, private credit, and other alternatives.

“In parallel, we are focused on distribution—both within Avalanche’s crypto-native and DeFi ecosystem, as well as through more traditional capital markets partners and challenger firms,” Krupetsky noted.

To put this in perspective, Krupetsky shared that finance company Intain developed a platform that leverages Avalanche architecture to launch an on-chain marketplace for tokenized asset-backed securities (ABS).

Known as “IntainMARKETS,” it facilitates asset issuance, investment, administration, and trading. The platform has already administered over $6 billion in tokenized loans.

Intain has launched the first institutional Subnet on #Avalanche

IntainMARKETS, an on-chain marketplace for asset-backed securities, hopes to facilitate efficient, cost effective, and transparent asset issuance, investment, and administration.

See why Intain #ChoseAvalanche ⬇️ https://t.co/nFT6O3M0Hd

— Ava Labs 🔺 (@AvaLabs) January 31, 2023

Injective Focuses on RWA Utility in DeFi

L1 network Injective is also focused on reshaping finance by making RWA tokenization compliant through a native token factory and permissions module.

Eric Chen, co-founder of Injective, told Cryptonews that Injective’s on-chain exchange module lets any issuer create secondary markets for their assets.

“Libre, an RWA issuer, recently launched tokenized versions of a BlackRock money market fund and a Laser Digital carry fund,” Chen said. “They’re setting up a BlackRock/Laser Digital market on Injective, where over 15 institutional market makers can quote prices, allowing users to enter and exit these funds seamlessly in a liquid manner.”

Chen noted that this unlocks liquidity and democratizes access to products previously only available to a select few.

He added that another key use case for Injective is collateralization. This means that Injective allows users to margin Bitcoin (BTC) or Ethereum (ETH) perpetuals with yield-bearing stablecoins.

“The goal for us isn’t just about RWA issuance, but rather activating real utility in DeFi, from secondary trading to margin and lending use cases,” Chen commented. “While we haven’t disclosed a target figure, Injective is built to capture a major share of the RWA market, which already exceeds $10 billion in total value locked.”

Challenges To Consider

While it’s clear that blockchain networks are driving the growth of RWAs, challenges remain.

Although tokenizing an asset is an increasingly commoditized process, Krupetsky explained that creating consistent demand, along with secondary market liquidity, has been a hurdle.

“Without active markets or integration into broader DeFi or TradFi workflows, tokenized RWAs risk staying static representations rather than functional assets,” she mentioned.

To combat this, Krupetsky believes that the industry should focus on “distribution-first tokenization,” where RWAs are integrated first into DeFi products. Industry experts should then think about how these offerings can fit into more traditional distribution channels.

While it’s impressive to see BlackRock and Franklin Templeton enter the sector, Krupetsky further stated that most financial institutions and market participants still operate on legacy systems.

“This means there still isn’t seamless integration bridges, onboarding, servicing, and reporting on tokenized assets,” she said. “To combat this, the industry should invest in middleware, token standards, and integration tools that enable compatibility with both DeFi and TradFi systems, while working closely with custodians, fund administrators, and compliance providers to bridge on- and off-chain infrastructure.”

Unclear regulatory frameworks across jurisdictions remain a further challenge, but industry experts are confident that 2025 will be a milestone year for tokenized RWAs.

Bhaji Illuminati, CEO at RWA platform Centrifuge, told Cryptonews that it’s becoming clear that institutional interest is turning into action. She added that regulatory clarity is slowly improving, while the infrastructure powering tokenization is maturing.

“Tokenized RWAs are moving from pilot programs to real allocation strategies, and we expect exponential growth in on-chain volumes as tokenization becomes a core part of asset issuance and trading,” Illuminati said.

Source: cryptonews