Tokenized real-world assets may ultimately represent trillions of dollars in traditional finance assets in a multichain future, as suggested by Animoca.
“The estimated $400 trillion addressable TradFi market highlights the potential growth opportunities for RWA tokenization,” stated researchers Andrew Ho and Ming Ruan in an August research paper from Web3 digital asset firm Animoca Brands.
The researchers discovered that the tokenized real-world asset (RWA) sector is merely a small part ($26 billion) of the total addressable market that exceeds $400 trillion.
These assets range from private credit and treasury debt to commodities, stocks, alternative funds, and global bonds.
Currently, there is “a strategic race to develop full-stack, integrated platforms” by major asset managers, with long-term value accruing to those who can “manage the asset lifecycle,” the researchers noted.
The size of the TradFi addressable asset market is 16,000 times larger than the existing on-chain market. Source: Animoca.
RWA value reaches an all-time high
The emerging RWA tokenization market is now at an all-time high of $26.5 billion, having increased by 70% since the start of the year, according to industry tracker RWA.xyz.
This indicates “clear momentum and increasing institutional confidence,” the researchers commented.
Total RWA value at ATH. Source: RWA.xyz
The current RWA landscape is primarily divided into two categories: private credit and US Treasurys, which together represent nearly 90% of the tokenized market value.
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The future of RWA is multichain, beyond Ethereum
Ethereum leads the market for RWA tokenization with a 55% market share, including stablecoins, amounting to $156 billion in on-chain value.
When incorporating Ethereum layer-2 networks like ZKsync Era, Polygon, and Arbitrum, that share rises to 76%, according to RWA.xyz.
“This leading position can be attributed to its security, liquidity, and the most extensive ecosystem of developers and DeFi applications,” the researchers indicated.
The expansion of RWA tokenization could further boost demand for related crypto assets like Ether (ETH), which reached an all-time high on Sunday, and oracle provider Chainlink (LINK), both of which have experienced gains outpacing the broader crypto market recently.
However, the researchers noted that RWA tokenization activity is “emerging across a multichain ecosystem that includes both public and private blockchains,” emphasizing that Ethereum’s current dominance is being tested by “high-performance and purpose-built networks, suggesting that interoperability will be crucial for success.”
Animoca Brands introduced its own tokenized RWA marketplace, NUVA, earlier this month.
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