Real-world asset protocols have overtaken decentralised exchanges to become the fifth-largest category in decentralised finance by total value locked.
Data from DefiLlama shows RWA protocols now account for roughly $17 billion in TVL.
This marks an increase from around $12 billion recorded in the fourth quarter of 2024.
The growth highlights how tokenised Treasurys, private credit and commodities have become core onchain building blocks.
DefiLlama noted that at the start of 2025, RWAs were not ranked within the top 10 DeFi categories.
Market observers say the shift reflects structural demand rather than speculative experimentation.
Vincent Liu, chief investment officer at Kronos Research, said growth is being driven by balance-sheet incentives.
Higher-for-longer rates are making tokenised Treasurys and private credit attractive yield-bearing assets.
Vincent Liu said.
He added that improving regulatory clarity has lowered friction for institutional allocators.
Earlier this year, RWAs excluding stablecoins expanded to roughly $24 billion in total value.