DeFi's Real-World Asset Pricing Problem Could Halt Institutional Adoption
Decentralized Finance (DeFi) protocols are struggling to price real-world assets (RWAs), which could be a significant hurdle for institutional adoption.
The Depository Trust & Clearing Corporation (DTCC) is running a tokenization trial with 40 firms, including JPMorgan and BlackRock, to represent shares and Treasuries on-chain. However, the tokens become usable collateral only when a lending market can answer who prices them and what happens once the venues behind that price go quiet.
According to DeFiLlama, on-chain RWA market cap is above $51 billion, but only near 7.7% of this amount is actively used across DeFi protocols.
Institutions are concerned about who can be trusted to provide accurate pricing for these assets. Matthew Fisher, CEO of Katana Network, said that an oracle's configuration starts with the venues it pulls price data from at launch and teams upgrade it as liquidity migrates toward newer or deeper venues.