Tokenized Real-World Assets Leave 89% Idle Despite $34.6 Billion Market

The tokenized real-world asset (RWA) market has reached $34.6 billion in on-chain value, but only $3.79 billion of this has been deployed in decentralized finance (DeFi) protocols.

This leaves about 89% of the issued value idle, according to DefiLlama data.

Artem Tolkachev, chief RWA officer at Falcon Finance, explained that low utilization is not always a sign of weak adoption. He noted that some tokenized assets are designed for use as collateral and may have high utilization rates.

Tolkachev separates utilization into two levels: the asset level and the use level. At the asset level, he examines redemption speed, party responsible for honoring redemptions, stability of yield, and potential losses after a default.

At the use level, he looks at whether an asset is being held for yield, posted as collateral at a centralized exchange, or supplied to a DeFi protocol. Each route carries different terms and risks, making protocol utilization an incomplete measure of total demand.