Tokenized RWAs Could Stabilize DeFi Yields During Bear Markets

The traditional yields in DeFi are closely tied to market volatility and leverage demand, often reflecting the price movements of major assets like BTC and ETH. During bull markets, increased trading and speculation drive up stablecoin yields as leverage demand rises. However, in bear markets, the opposite occurs, deleveraging reduces lending utilization, and stablecoin yields drop significantly.

The 2021 bull market saw USDC supply rates on Aave peak above 10%, only to fall below 2% by mid-2022 as DeFi TVL shed over $140 billion. This cycle highlights how DeFi yields are fundamentally linked to leverage demand, making them volatile and unsustainable during downturns.

Tokenized real-world assets (RWAs) offer a different approach, deriving yield from real economic activity rather than crypto-native leverage. The 2022-2023 bear market demonstrated this potential when tokenized treasuries grew from $1 billion in early 2023 to over $9 billion by late 2025, a 700% increase. This growth was driven by the yield gap between DeFi and risk-free rates, which incentivized capital to rotate toward RWA yields instead.

Looking ahead, tokenized credit RWAs present an even larger opportunity. The global private credit market is projected to reach $4.5, $5 trillion by 2030, and tokenized credit products like Apollo's ACRED already target yields of 6.5-8.5%. As DeFi TVL fell 24% in early 2026, the RWA sector grew 38%, with tokenized credit specifically growing over 20%. This trend suggests that RWA yields could provide a more resilient base layer for DeFi during bear markets.

The broader adoption of RWAs could reshape DeFi cycles. In bull markets, leverage-driven yields will still dominate, but during bear markets, RWA yields could offer a stable alternative. Projections from ARK Invest, BCG, and McKinsey suggest a massive expansion of tokenized assets by 2030, potentially making DeFi more durable and less dependent on speculative cycles.