Real-world asset protocols have surpassed decentralised exchanges to become the fifth-largest category in decentralised finance by total value locked during 2025.
Data from DefiLlama shows RWAs now hold around $17 billion in TVL, rising sharply from roughly $12 billion recorded in the fourth quarter of 2024.
The growth reflects how tokenised US Treasurys, private credit instruments and commodities have shifted from experimental use cases into core onchain infrastructure.
DefiLlama noted that RWAs were not even among the top ten DeFi categories at the start of the year, underlining the pace of adoption.
Market participants say the expansion is tied more to balance-sheet efficiency than speculative experimentation.
Balance-sheet incentives rather than experimentation are driving this growth.
Vincent Liu said.
Liu added that higher-for-longer interest rates have increased demand for tokenised Treasurys and private credit as yield-bearing onchain assets.