RWA protocol TVL surpasses DEX, becoming the fifth largest DeFi category

The RWA protocol has surpassed DEXs, becoming the fifth largest category in decentralized finance (DeFi) by total value locked (TVL). According to DefiLlama data, RWA protocols currently have approximately $17 billion locked, a significant increase from about $12 billion in the fourth quarter of 2024.

Vincent Liu, Chief Investment Officer of Kronos Research, stated that the growth of RWA is primarily driven by "balance sheet incentives rather than experimental demand." Higher interest rates have made tokenized government bonds and private credit high-yield assets on-chain, while an improved regulatory environment has lowered the entry barriers for institutional investors. Tokenized U.S. Treasury bonds remain the main product, with funds such as BlackRock's BUIDL, Circle's USYC, Franklin Templeton's BENJI, and Ondo's OUSG driving this submarket to reach billions of dollars. Additionally, the rise in gold and silver prices has injected new momentum into the tokenized commodities market, which has a market cap close to $4 billion, primarily dominated by products like Tether Gold and Paxos Gold.