Real-world asset protocols have overtaken decentralized exchanges to become the fifth largest DeFi category in terms of total value locked, with $17 billion to $30 billion now held in tokenized Treasuries, private credit, and commodities. Data shows this marks a shift from speculation to yield-focused products amid continued high interest rates.
What Happened: RWA Protocols Overtake DEXs
Real-world asset protocols overtook DEX platforms in TVL rankings in 2025, says ChallengeLlama data. RWA TVL has grown from around $12 billion at the end of 2024 to around $17 billion in 2025, while broader tokenized RWA market trackers show the sector approaching $30 billion by Q3 2025.
Private credit accounts for about $17 billion of that total, with Treasuries accounting for $7.3 billion.
CoinDesk notes that RWA tokenization has almost quintupled in three years.
Chartered standard The assets symbolized by the projects could reach $30 trillion by 2034.
Tokenized Treasuries are leading adoption, with Black Rock BUIDL Fund, Franklin Templeton tokenized money market funds and Circle-like yield products bringing U.S. government debt yields on-chain. Several of these funds have each exceeded $1 billion in deposits. Private credit platforms and tokenized products like gold-backed tokens add traditional financial exposure.
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Why it matters: performance change
Institutional allocators and DeFi-native treasuries now treat RWA as core yield and collateral. Invest data shows that RWA TVL more than tripled year-over-year as Treasury DAOs shifted their stablecoin holdings to tokenized Treasuries and private credit.
More RWA collateral generally allows for broader lending markets, more stable yield products, and additional income options for stablecoin holders.
Gold and silver rallies have attracted new capital to gold-backed tokens like Gold Attachment And Paxos Goldpushing the market capitalization of tokenized commodities towards $4 billion.
RWA protocols carry smart contract, regulatory, and issuer risks despite the familiar underlying assets. Investors hold tokens dependent on specific companies to hold and manage bonds, not direct brokerage holdings.
Many RWA platforms operate with permitted rules or KYC requirements, allowing addresses to be frozen or conditions changed based on compliance requirements.
100mCrypto reports that most RWA values are concentrated in a small number of private issuers and networks, creating concentration risk. This shift shows that DeFi is moving closer to traditional market structures, with more conventional assets expected to integrate with on-chain yield tools.
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