Tokenized real-world assets may eventually represent trillions of dollars worth of traditional finance assets in a multichain future, according to Animoca.
“The estimated $400 trillion addressable TradFi market underscores the potential growth runway for RWA tokenization,” said researchers Andrew Ho and Ming Ruan in an August research paper from Web3 digital property firm Animoca Brands.
The researchers found that the tokenized real-world asset (RWA) sector is just a small fraction ($26 billion) of the total addressable market currently, which is over $400 trillion. These asset classes include private credit, treasury debt, commodities, stocks, alternative funds and global bonds.
There is currently “a strategic race to build full-stack, integrated platforms” by large asset managers, and long-term value will accrue to those who can “control asset lifecycle,” the researchers said.
Size of TradFi addressable asset market is 16,000 times larger than the current onchain market. Source: Animoca.
RWA value hits an all-time high
The nascent RWA tokenization market is currently at an all-time high of $26.5 billion, having grown 70% since the beginning of this year, according to industry tracker RWA.xyz.
This is “signaling clear momentum and rising institutional confidence,” the researchers said.
Total RWA value at ATH. Source: RWA.xyz
The current RWA landscape is dominated by two categories: private credit and US Treasurys, and together, they account for almost 90% of tokenized market value.
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RWA future is multichain, not just Ethereum
Ethereum is the market leader for RWA tokenization with a 55% market share, including stablecoins, and $156 billion in onchain value.
When Ethereum layer-2 networks such as ZKsync Era, Polygon and Arbitrum are included, that share grows to 76%, according to RWA.xyz.
“Its leading position is likely due to its security, liquidity, and the largest ecosystem of developers and DeFi applications,” the researchers said.
The growth of the RWA tokenization could drive further demand for related crypto assets such as Ether (ETH), which hit an all-time high on Sunday, and oracle provider Chainlink (LINK), both of which have seen gains outpace the wider crypto market in recent weeks.
The researchers said that RWA tokenization activity is “unfolding across a multichain ecosystem encompassing public and private blockchains,” adding that Ethereum’s current lead is being challenged by “high-performance and purpose-built networks, indicating that interoperability will be key to success.”
Animoca Brands launched its own tokenized RWA marketplace called NUVA earlier this month.
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