Capital rotates, not retreats: Tokenized assets defy market slump

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Highlights

Despite a 25% drop in DeFi’s total value locked, tokenized real-world assets вырос to $24.8 billion, signaling capital rotation rather than a full market exit.
Investors are increasingly shifting toward tokenized Treasuries and regulated yield-bearing products instead of relying on high-risk DeFi incentives.
The rise of tokenized funds could transform global asset management, provided regulatory clarity, interoperability, and custody infrastructure continue to improve.

The divergence suggests investors are not abandoning digital assets altogether but reallocating toward instruments that combine blockchain efficiency with traditional financial characteristics such as yield, legal clarity, and enforceable rights, Decrypt reports.

RWA growth outpaces DeFi decline

According to RWA.xyz, distributed asset value in the RWA sector rose 8.68% over the past month to $24.84 billion. By contrast, DeFi’s total value locked dropped 25% to $94.84 billion, based on DeFiLlama figures, with major protocols posting double-digit declines. Tokenized U.S. Treasuries, commodities, and private credit led the expansion, climbing 10%, 20%, and 15% respectively.

Industry participants argue the trend reflects capital rotation rather than exit. "DeFi yields were compressed, so lending and staking decreased alongside the market," Sergej Kunz, co-founder of 1inch, told Decrypt. "At the same time, tokenized treasuries offer 4% on-chain returns with minimal risk. People are not leaving the space, they're entering in a slightly less risky way."

Rico van der Veen, CEO of Programmable Credit Protocol, added:

“RWA protocols offer what DeFi never could: enforceable rights, regulatory clarity, and cash flows that don't depend on token emissions." However, he cautioned that token prices do not necessarily capture this growth. "BlackRock's BUIDL has $1.5 billion-plus under management. That value sits in the fund, not in any governance token," he said. "Most RWA tokens are still utility tokens with no claim on the revenues flowing through the protocol. Adoption and token price are decoupling, permanently."

BlackRock’s BUIDL fund, launched on Ethereum in 2024, has become one of the largest tokenized Treasury products, underscoring how traditional asset managers are increasingly embracing blockchain-based distribution.

Tokenized funds reshape asset management

Beyond individual RWAs, tokenization is transforming the broader asset management industry. By issuing fund shares as blockchain-based tokens, managers can automate subscriptions, redemptions, dividend distributions, and compliance checks using smart contracts. Ethereum’s ERC-20 standard remains widely used for compatibility with digital wallets and applications.

Tokenized money market funds, real estate vehicles, and private equity structures are gaining traction. Fractional ownership lowers entry barriers, while near-instant settlement enhances liquidity for traditionally illiquid assets. Analysts at firms including Boston Consulting Group have projected that tokenized assets could reach tens of trillions of dollars in value over the next decade if regulatory clarity continues to improve.

Still, challenges persist. Legal recognition of tokenized shares, robust KYC/AML compliance frameworks, and institutional-grade custody solutions remain prerequisites for broader adoption.

Infrastructure and interoperability drive the next phase

As tokenized funds scale, interoperability across blockchains is emerging as a critical factor. Cross-chain standards aim to prevent liquidity fragmentation and allow investors to access tokenized assets across multiple networks. Secure oracle systems are also essential to feed accurate net asset value (NAV) data into smart contracts to ensure fair pricing.

The convergence of RWAs and tokenized fund structures points to a broader modernization of capital markets infrastructure. Traditional intermediaries may gradually give way to programmable systems capable of reducing costs and operational friction.

Why this matters

The shift from speculative DeFi activity toward tokenized real-world assets signals a maturation phase for the digital asset industry. Instead of relying primarily on token incentives and volatile yields, capital is increasingly flowing into blockchain-based instruments backed by tangible cash flows and regulated frameworks. This evolution could strengthen the sector’s credibility among institutional investors.

At the same time, tokenized funds represent a potential overhaul of global asset management, replacing manual, paper-based systems with automated and transparent digital infrastructure. If interoperability, compliance, and custody challenges are resolved, tokenization may unlock broader investor access and significantly improve market efficiency worldwide.

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