Real-world asset protocols surpassed decentralized exchanges to become the fifth-largest category in DeFi by total value locked, with $17-30 billion now held in tokenized Treasuries, private credit and commodities. Data shows this marks a shift from speculation toward yield-focused products amid persistent high interest rates.
What Happened: RWA Protocols Overtake DEXs
Real-world asset protocols climbed past DEX platforms in TVL rankings during 2025, according to DefiLlama data. RWA TVL rose from around $12 billion in late 2024 to approximately $17 billion in 2025, while broader tokenized RWA market trackers show the sector near $30 billion by Q3 2025.
Private credit accounts for roughly $17 billion of that total, with Treasuries representing $7.3 billion.
CoinDesk notes that RWA tokenization grew almost fivefold over three years.
Standard Chartered projects tokenized assets could reach $30 trillion by 2034.
Tokenized Treasuries lead adoption, with BlackRock's BUIDL fund, Franklin Templeton's tokenized money market funds and Circle-style yield products bringing U.S. government debt returns on-chain. Several of these funds passed $1 billion in deposits each. Private credit platforms and tokenized commodities like gold-backed tokens add traditional finance exposure.
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Why It Matters: Yield Shift
Institutional allocators and DeFi-native treasuries now treat RWAs as base-layer yield and collateral. AInvest data shows RWA TVL more than tripled year-over-year, with DAO treasuries shifting stablecoin holdings into tokenized Treasuries and private credit.
More RWA collateral typically enables expanded lending markets, more stable yield products and additional earning options for stablecoin holders.
Rallies in gold and silver attracted fresh capital into gold-backed tokens like Tether Gold and Paxos Gold, pushing tokenized commodities' market cap toward $4 billion.
RWA protocols carry smart contract, regulatory and issuer risk despite familiar underlying assets. Investors hold tokens dependent on specific companies to own and manage bonds, not direct brokerage holdings.
Many RWA platforms operate with permissioned rules or KYC requirements, allowing address freezes or term changes based on compliance demands.
100mCrypto reports most RWA value concentrates in a small number of issuers and private networks, creating concentration risk. The shift shows DeFi moving closer to traditional market structures, with more conventional assets expected to integrate with on-chain yield tools.
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