From Bitcoin spot ETF to the tokenization wave, institutional power represented by Wall Street is profoundly influencing and changing the direction of the crypto market, and we believe that this power will become stronger in 2025. OKG Research has launched the "Wall Street on the Chain" series of research to continue to focus on the innovation and practice of traditional institutions in the field of Web3, to see how top institutions such as BlackRock and JPMorgan Chase embrace innovation? How will tokenized assets, on-chain payments and decentralized finance shape the future financial landscape? 
Text | Jason Jiang, OKG Research
Solana Foundation Chairman Lily Liu recently talked about RWA and said, "Most RWAs have value but no price because they are not traded." This sentence accurately hits the core problem of the current development of RWA: Although RWA itself is an asset with real value, due to the lack of on-chain usage scenarios and continuous liquidity, the asset value and price are separated, making it even more difficult to achieve true free circulation. The significance of RWA has never been to simply "move" assets to the chain, but to activate its liquidity through on-chain, so that the asset value can be changed from "visible on the chain" to "available on the chain". Among them, the integration of RWA and DeF is the most critical.
RWA Dilemma: The “Island Effect” of On-Chain Assets
When we talk about RWA, we always think of those exaggerated predictions: Manhattan apartments are divided into NFT shares, Tesla stocks are turned into on-chain tokens, and now these are becoming a reality, and more and more real assets are beginning to migrate to the chain. According to incomplete statistics from OKG Research, as of March 26, the total market value of the RWA sector (excluding stablecoins) has approached US$20 billion, an increase of 25.4% since the beginning of the year, and a 109.27% increase compared to the same period in 2024, significantly outperforming other crypto asset sectors.
Behind these impressive figures is the market's recognition and acceptance of the RWA concept. We have seen that in the traditional financial system, financial institutions often take months to complete private bond issuance, and gold delivery at the London Gold Exchange also requires 72 hours of settlement. But on the chain, we have been able to shorten the time it takes to put assets on the chain to seconds, and the gas fee is only in the single digit. This huge gap in efficiency has driven more and more traditional financial institutions to pay attention and participate. Larry Fink, CEO of the world's largest asset management company, once pointed out that ETFs are the first step in the technological revolution of the financial market, and the next step is tokenization.
However, although the RWA market is expected to become the next trillion-dollar market, if innovation only stays at the level of "asset on-chain", RWA is nothing more than a layer of blockchain technology on traditional financial products, and its potential will not be fully released . Take traditional bonds as an example. Although tokenization can achieve T+0 settlement, if there is a lack of liquidity pools, lending agreements or derivative markets, these tokens are still just "electronic certificates" controlled by centralized institutions. As Reid Simon, head of credit at Securitize, said: "The lack of practicality of RWA limits the on-chain flow of high-quality assets."
More importantly, in the process of promoting assets on the chain, traditional financial institutions usually need to go through cumbersome clearing, custody and compliance processes. Although these processes ensure the security of assets, they also greatly restrict the popularization and development of tokenized applications. Tokenized platforms led by large institutions such as Goldman Sachs and Morgan Stanley often reconstruct financial privileges through strict KYC and entry barriers. For example, BlackRock's BUIDL fund is only open to million-dollar institutions, and this "democratization" is often just a slogan for the elite, so that ordinary investors cannot really benefit from it.
RWA without DeFi: An unfinished innovation revolution
Although it has been mentioned many times, as RWA continues to gain popularity, OKG Research still wants to reiterate: The development of RWA must be integrated with DeFi.
Traditional financial institutions are compliant and robust in the process of asset tokenization, but their geographical limitations, efficiency issues and regulatory barriers make it difficult for tokenized assets to circulate globally. If we rely entirely on traditional financial institutions, RWA can only circulate within a closed circle, and global capital cannot participate widely. Without the support of DeFi, RWA cannot form a truly open and free market system, with low transaction efficiency and imperfect price discovery mechanism, and may eventually evolve into a new "asset island" .
However, the openness and decentralization advantages of DeFi have injected new vitality into the tokenization of RWA. Taking real estate as an example, RWA was once the most questioned area in the market. Faced with an office building worth hundreds of millions of dollars, how can ordinary investors get involved? The answer given by DeFi is to package the mortgage loan of the office building into NFT, divide it into tokens of different risk levels, and connect it to liquidity pools such as Aave. In this way, ordinary investors can buy "low-risk" tokens for $50 and share the fixed income of office building rent; while professional investors can use "high-risk" tokens for leveraged arbitrage.
This "fragmentation + composability" model allows the value of a single asset to be split into a multi-dimensional return portfolio for global investors. Through DeFi's liquidity pool, RWA's tokens can not only provide investors with more diversified choices, but also improve the liquidity of the overall market and promote efficient allocation of capital.
More importantly, the integration of RWA and DeFi will also provide the market with a more stable income channel. The current yield of US Treasury bonds is about 5%, and with the help of lending agreements in DeFi, investors can often get more attractive returns. In this case, RWA can not only provide more real-world assets for the DeFi ecosystem, but also DeFi's efficient matching and liquidation mechanism can provide RWA with more efficient market services. In this way, DeFi not only provides RWA with a channel for capital flow, but also brings investors higher income potential through the transparency and efficiency of the platform. This will attract more investors to enter the tokenization market and further expand the market demand and application scope of RWA.
On the other hand, the development of DeFi is also inseparable from the stable support of RWA. In the past, DeFi's income mainly relied on activities such as staking, lending and trading of highly volatile crypto assets, but it often exposed practical problems such as insufficient liquidity and declining yields. The introduction of RWA assets can not only bring more stable assets with real value support to the DeFi ecosystem, but also provide users with stable risk-free returns when the market is sluggish. Compared with traditional high-volatility assets, this stability is exactly what DeFi platforms urgently need when attracting institutional funds and long-term investors. With the stability and compliance of RWA, the high efficiency and openness unique to DeFi are expected to be more fully released in the future and usher in the next Summer.
Conclusion
The fusion of RWA and DeFi is essentially to inject Wall Street's financial logic into the programmable genes of the blockchain. When a tokenized office building can automatically convert rental income into tokenized deposit interest, and when a digital artwork can be fragmented into collateral for hundreds of DeFi lending pools, finance will no longer be a game for a few people, but an open source protocol for global liquidity.
This revolution does not seek to subvert the value of gold, but to enable everyone to become a "market maker" for their own assets. Just as the newspaper headline engraved by Satoshi Nakamoto in the Genesis Block: "Chancellor stands on the brink of a second round of bank bailouts" - fifteen years later, RWA and DeFi are joining forces to write the next chapter: "Tokenization is on the verge of reconstructing traditional finance."
