According to DefiLlama data, as reported by TechFlow TechFlow on December 29th, the RWA protocol has surpassed DEXs to become the fifth largest category in decentralized finance (DeFi) by total value locked (TVL). The RWA protocol currently has approximately $17 billion locked, a significant increase from approximately $12 billion in the fourth quarter of 2024.
According to Vincent Liu, Chief Investment Officer of Kronos Research, RWA growth is primarily driven by "balance sheet incentives rather than experimental demand." Higher interest rates have made tokenized government bonds and private credit high-yield on-chain assets, while improved regulatory conditions have lowered the entry barrier for institutional investors.
Tokenized U.S. Treasury securities remain the dominant product, with funds such as BlackRock's BUIDL, Circle's USYC, Franklin Templeton's BENJI, and Ondo's OUSG driving this segment to a size of several billion dollars. In addition, rising gold and silver prices have injected new momentum into the tokenized commodities market, which has a market capitalization of nearly $4 billion, primarily dominated by products such as Tether Gold and Paxos Gold.
