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.
Private credit and tokenised Treasurys were identified as the main drivers of that expansion.
Ethereum continues to dominate as the primary settlement layer for onchain debt and fund structures.
RWA issuance remains concentrated among a small group of large vehicles deployed on Ethereum.
Data from RWA.xyz shows secondary networks capturing smaller shares of public-chain RWA value.
These networks include BNB Chain, Avalanche, Solana, Polygon and Arbitrum.
In parallel, permissioned infrastructure has grown in importance for institutional participation.
Canton Network has emerged as a major hub, hosting more than 90% of total institutional RWA market share.
The network provides a regulated, privacy-preserving environment linked to DeFi liquidity rails.
Tokenised US Treasurys continue to act as the primary gateway product for RWAs.
Funds such as BlackRock’s BUIDL, Circle’s USYC and Franklin Templeton’s BENJI have driven adoption.
Ondo’s OUSG and similar products pushed the tokenised Treasury segment into the multi-billion-dollar range by December.
The constraint is no longer tokenisation itself, but liquidity and integration into TradFi.
Vincent Liu said.
He added that attention in 2026 will shift from headline TVL to control, ownership and usage.
Rallies in gold and silver have added momentum to tokenised commodities.
Tokenised commodities are now valued at close to $4 billion in market capitalisation.
Gold-backed products have led growth alongside rising spot metal prices.
These moves are elevating tokenised commodities from niche RWAs to macro-relevant assets.
Vincent Liu said.
He pointed to interoperability as a key factor for the next phase of RWA adoption.
At the time of reporting, Ethereum price was $2,932.74.