Tokenization Growth Masks Composability Gap in DeFi Integration
The tokenized asset market has experienced significant growth this year, expanding by nearly 50% to reach $37 billion between January and July 2026. This growth occurred despite a broader crypto downturn, with Bitcoin, Ethereum, and most altcoins losing value during the same period.
However, a closer look at the data reveals that most tokenized assets are not integrated into decentralized finance (DeFi) as they should be. Only 12% of tokenized assets meet Pantera Capital's bar for meaningful DeFi integration, according to an analysis of 542 assets.
The average composability score across these assets was just 2.04 out of 5, indicating a significant gap between the potential of tokenization and its actual implementation. The majority of scored assets (77.6%) are 'wrappers' that mainly digitize traditional products rather than functioning as composable DeFi tools.
Despite this, there is growing demand for tokenized assets that integrate well into DeFi. RWA deposits in lending markets and decentralized exchanges have tripled to $7.4 billion over the past year, with Centrifuge's total value locked ranging between $1.6 billion and $1.8 billion in late August 2026.