A Tren Finance report estimates RWAs will explode in the coming years and cross the trillion mark by 2030.
Real World Assets (RWAs), or on-chain tokens representing the value of off-chain assets, could grow steadily to hit trillion-dollar market capitalization, according to a Tren Finance report. RWAs, collectively, are worth over $180 billion, presently, with stablecoins amassing $172 billion.
Other tokens, like on-chain versions of TradFi instruments, such as securities and others, are catching up but have quite a way to go. In fact, 2024 has been a tremendous year for RWAs as major institutions have relied on blockchain networks to tokenize their funds.
RWA Ecosystem. Source: Tren Finance
Trent Finance highlighted the estimations made by global financial firms regarding the growth of this novel token vertical. They feel the RWA market capitalization could grow to anywhere between $2 trillion and $30.1 trillion. Even if RWAs could collectively make it to somewhere between those two estimates—say $10 trillion—the market would relay an explosive growth of over 50 times from its $180 billion valuation.
Source: Tren Finance
At an elementary level, tokenization allows users, retail and institutional, to beat the challenges faced while dealing with assets and transactions the traditional way. Relying on blockchain networks brings novel benefits like fractional ownership of assets and enhanced transparency, while others like reduced fees and settlement time and increased liquidity flow.
“What makes this ecosystem particularly exciting is its potential to transform traditional markets by increasing accessibility, liquidity, and efficiency,” the report read. “Whether it’s enabling fractional ownership of premium real estate, democratizing access to fine art investments, or creating new ways to trade commodities, these projects are pushing the boundaries of what’s possible in finance and asset management.”
RWAs Revolutionizing Numerous Industries
The report also spoke of the top categories RWAs have begun revolutionizing, including stablecoins, real estate, infrastructure, government securities, private credit, commodities, real estate, intellectual property, carbon credits, and collectibles. Tren is of the opinion that this list will grow as RWAs are set to revolutionize numerous other industries.
“The integration of traditional finance with blockchain technology is not just a trend, but a fundamental shift towards a more accessible, efficient, and dynamic financial ecosystem,” Tren said. “As the market matures and adoption grows, tokenized assets are likely to capture a significant share of the global financial market, potentially reshaping how we invest, trade, and own assets in the years to come.”
