By Jae, PANews
The RWA Paradox: Why Billions in Tokenized Assets Lie Dormant on the Blockchain
In the scorching summer of July, Real-World Assets (RWA) emerged as the hottest narrative in the crypto market. On-chain RWA volume soared to an all-time high of $32 billion, marking approximately a 22% increase from the beginning of the month and surpassing the previous peak set in April this year.
However, as the industry celebrates RWA tokenization breaking the $30 billion mark, a closer look at DeFi utilization data reveals a structural challenge beneath this booming facade. Currently, nearly 90% of on-chain RWAs remain unutilized, not participating in any DeFi activities such as lending or collateralization.
This stark imbalance between scale and activity has become an unavoidable question for the RWA sector: what happens after assets are brought on-chain?
The “Scissors Gap” Between Scale and Utilization: Top Platforms Show Divergent Performance
According to “The State of Tokenization in 2026” report co-published by BeInCrypto Intelligence and RWA.xyz, out of 1,289 tokenized assets exceeding $100,000, 910 saw no on-chain transfers within a week. This indicates that over 70% of tokenized assets are “sleeping” on any given day.
Further statistics from Edgy, a partner at Bitcoin L2 protocol Stacks, show that out of the over $30 billion total RWA market, 87% of assets are in an “on-chain dormant” state. They are neither used as collateral in lending markets nor actively traded, mostly having only completed the first step of “recording on-chain.” A DWF Labs report also notes that only about 10% of tokenized RWAs are truly active in DeFi protocols, with the remaining 90% “parked” as static capital in institutional wallets.
This divergence between “scale and utilization” is even more pronounced among leading platforms:
- Securitize: The Volume King, A Utilization Underperformer
As the issuance partner for BlackRock’s BUIDL fund, Securitize is undoubtedly the “volume leader” in RWA tokenization. Its tokenized asset volume has surpassed $4.9 billion, with Q1 revenue reaching $19.5 million, and it recently listed on the NYSE with an estimated valuation of $1.25 billion. Yet, its DeFi utilization rate is a mere 0.7%, a stark contrast between its massive asset scale and minimal DeFi engagement. - Ondo Finance: Multi-Chain Expansion, Still Low Utilization
Managing nearly $3.5 billion in tokenized assets, Ondo has expanded across more than 10 chains and boasts 168 integration projects, holding over 70% market share in tokenized equities. However, its DeFi utilization rate stands at approximately 2.7%. While better than Securitize, it remains far from truly “active.” - Maple Finance: High Efficiency from a Smaller Footprint
Maple is significantly smaller than Securitize and Ondo, with assets under management (AUM) of only $2.3 billion. Despite this, it has over $1.6 billion in active loans and has originated more than $22 billion in cumulative loans, achieving a remarkable DeFi utilization rate of 62%.
From a business model perspective, these three platforms exhibit fundamental differences.
Securitize and Ondo primarily act as “asset issuers.” Their strengths lie in their compliant frameworks and institutional relationships: obtaining licenses, signing major clients, and bringing assets on-chain. Their revenue comes from issuance and management fees, a “pick-and-shovel” business model where the circulation and use of tokenized assets are not their primary operational focus.
Maple, on the other hand, is an “asset application” proponent. It operates as an on-chain credit protocol, where its assets are designed from inception to be embedded within lending activities. Consequently, Maple can leverage a smaller asset base to achieve higher DeFi utilization, ensuring assets are truly “put to work” and generate on-chain economic value through lending interest and transaction fees.
Why Does “On-Chain” Not Equal “Circulation”?
The phenomenon of RWAs “going on-chain to sleep” is a temporary state, resulting from a combination of asset attributes, regulatory constraints, and infrastructure gaps.
Asset Attributes: Yield-Holding ≠ Trading Circulation
Currently, the on-chain RWA sector is primarily divided into two segments: “active yield pools” dominated by private credit, and “yield-bearing safe havens” led by tokenized U.S. Treasuries. These two categories exhibit polarized DeFi utilization rates.
Private credit, by its very nature, is a “fund lender.” In Maple’s credit pools, stablecoins deposited by investors are quickly lent out by the protocol to qualified institutional borrowers, pushing DeFi utilization rates above 60%. This “deposit-to-lend” model means that most of private credit’s TVL (Total Value Locked) is equivalent to “outstanding loan balances.”
In stark contrast, tokenized U.S. Treasuries have a DeFi utilization rate of only about 5%. The value proposition of tokenized Treasuries is “risk-free on-chain yield,” not as a trading instrument. Holders of products like BlackRock’s BUIDL and Franklin Templeton’s BENJI are predominantly institutions and stablecoin issuers, whose primary objective is to hold for yield rather than frequent trading or leveraging.
A significant volume of tokenized Treasuries serves as underlying assets for stablecoins: Ethena’s USDtb holds approximately 90% of its reserves in BUIDL, and Frax’s frxUSD also uses BUIDL as one of its reserve assets. It can be argued that tokenized Treasuries are indeed fulfilling a financial role, even if it’s not reflected in DeFi utilization metrics.
Compliance Constraints: Whitelist Mechanisms Naturally Restrict Circulation
The vast majority of tokenized assets are legally classified as securities and must adhere to strict investor suitability rules. Products like Securitize’s BUIDL and Ondo’s OUSG implement KYC whitelist mechanisms, meaning tokens can only be transferred between wallets of verified, qualified investors.
This implies that traditional assets, from the moment they are tokenized, inherently conflict with the underlying logic of “permissionless DeFi.” While they can be tokenized, they cannot freely enter public lending pools like Aave or Compound as collateral. Even permissioned markets like Aave Horizon can only cater to a small segment of institutional users.
Nevertheless, high scale and low utilization are an inevitable phase for RWA’s journey to mainstream adoption. The sequence for institutional capital involves first bringing assets compliantly on-chain, establishing a full lifecycle of custody, auditing, and transfer agency, before discussing composability. From this perspective, “sleeping RWAs” are not wasted but are accumulating potential for the next stage of development.
Infrastructure Deficiencies: Immature Market Making and Liquidation Mechanisms
Andrei Grachev, Managing Partner at DWF Labs, points out that liquidity is a limiting factor for scaling RWAs on-chain, citing a lack of infrastructure for large-scale trading of tokenized assets: instant pricing, instant redemption, and a secondary market deep enough to provide quotes.
As he accurately states, the absence of liquidity infrastructure is the third bottleneck faced by RWAs. Market makers generally adopt a wait-and-see approach towards tokenized assets: thin trading volumes fail to cover market-making costs, opaque underlying asset valuations increase holding risks, and compliant transfer restrictions further narrow the range of counterparties.
Most RWAs suffer from low turnover rates, with bid-ask spreads significantly wider than in traditional financial markets. Without deep secondary markets, investors face practical difficulties in asset pricing and liquidation, even if they wish to engage in DeFi trading or lending.
From “Issuance Race” to “Application Battle”: Distribution Is Devouring Everything
The industry has recognized the issue of low DeFi utilization for tokenized assets, and the focus of competition in the RWA sector’s second half is gradually shifting from “who issues more” to “who can activate them.”
On one hand, native credit protocols inherently possess a high DeFi utilization advantage. Protocols like Maple and Centrifuge are designed to deeply integrate assets with lending scenarios from the outset, with their business models inherently driving asset circulation. While these projects may not be massive in scale, they represent a direction of deep integration between RWA and DeFi.
On the other hand, distribution layer integration is emerging as a new growth area. Securitize’s integration with UniswapX enables compliant on-chain trading, while Centrifuge’s collaboration with Morpho opens up lending distribution channels. The gradual improvement of infrastructure is closing the last mile from asset issuance to utilization.
Even more noteworthy are entry-point players like Robinhood Crypto. For most DeFi protocols, the toughest challenge after product launch is finding users and incentivizing action. Robinhood Crypto possesses an existing application ecosystem (App), proprietary wallet (Wallet), and customer relationships, allowing direct connection to its existing user base after asset issuance, solving the “who will use it after issuance” pain point faced by many platforms.
After Maple’s yield-bearing token, SyrupUSDG, launched on Robinhood Crypto, its circulating market cap soared to $100 million within a month. In contrast, SyrupUSDT, a similar product promoted independently by the protocol, took a full nine months to reach the same level. This demonstrates that as RWA enters a phase of mass adoption, channels, distribution networks, and user habits are far more dominant than mere asset attributes.
The RWA utilization paradox is essentially a microcosm of the collision between traditional financial frameworks and crypto-native logic. The former emphasizes compliance, risk control, and holding for yield, while the latter pursues composability, high turnover, and “Lego-like” innovation. The chasm between the two cannot be bridged by a single platform or technology in the short term.
The $32 billion scale proves the feasibility of “bringing traditional assets on-chain,” but low utilization also reminds the industry that this is merely the first step in a long journey. The next test will not be how many assets can be recorded on the blockchain, but how many can circulate, be utilized, and create new application scenarios on-chain.
For builders and investors, the next phase of screening criteria needs to be more diverse: looking not only at issuance volume but also at liquidity depth; not only at the length of the asset list but also at actual utilization rates. Tokenization is never the end goal; bringing assets to life on-chain is the true starting point of the RWA narrative.
