Institutions Turn to Blockchain for Yield, Liquidity, and Efficiency as Real-World Assets Go On-Chain, RWA as the second fastest-growing crypto sector, after stablecoins.

A quiet revolution is underway in the world of finance. According to RedStone’s newly published RWA in On-chain Finance Report: H1 2025 Market Overview, tokenized real-world assets (RWAs) have become one of the fastest-growing categories in crypto—second only to stablecoins—reaching more than $24 billion in value as of June 2025, up from an estimated $5–10 billion in 2022. The report was co-authored in collaboration with Gautlet and rwa.xyz.

At the heart of this growth is a perhaps surprising leader: private credit. Once confined to institutional desks and illiquid vehicles with seven to ten-year lock-ups, private credit has been transformed through tokenization. RedStone’s research finds that over $14 billion of the current RWA market—well more than half—is now composed of tokenized private credit. This shift is not driven by hype or headlines, but by hard financial logic: institutions are seeking higher yields and faster access to capital, and blockchain is increasingly delivering both.

“Private credit has emerged as the foundation for tokenization’s real-world impact,” said Marcin Kaźmierczak, Co-founder of RedStone. “What we’re seeing now is institutional finance actively moving into blockchain—not just exploring, but deploying capital in meaningful ways and innovating with RWA looping strategies.”

The report tells a broader story about how tokenization has moved beyond the pilot phase. Infrastructure has matured, regulatory clarity is improving, and institutions are integrating blockchain into real capital markets workflows. This is particularly true in segments like tokenized Treasury bills—now a $7.5 billion market—and in the rise of permissioned DeFi platforms that blend traditional finance’s controls with crypto’s composability and efficiency.

While treasuries remain a critical part of the narrative, the real momentum lies in tokenized private credit. With yields averaging between 8–12%, products like Apollo’s ACRED fund—issued by Securitize and integrated via sTokens standard with DeFi protocols like Morpho, Kamino, and Drift Institutional—are demonstrating how real-world assets can generate programmable yield streams while still satisfying institutional standards for risk and compliance. In many cases, onchain finance compatible representations of  these products are not just being held passively—they are being actively used as collateral, as DeFi building blocks, and as part of leveraged yield strategies that weren’t previously possible in traditional markets.

The implications extend far beyond returns. Tokenization is improving settlement times, reducing barriers to entry, and enabling the type of fractional, global participation that private credit has historically lacked. For institutions, this means a broader distribution base. For crypto-native platforms, it means access to real, yield-bearing assets in a regulated framework.

Behind the scenes, oracles have become the unseen enablers of this growth. RedStone’s report devotes a section to the architectural shift required for RWAs, which do not behave like volatile crypto tokens. Unlike traditional DeFi price feeds—which update in real-time and pull data from multiple exchanges—RWAs often rely on Net Asset Value (NAV)-based pricing, calculated daily or weekly by fund administrators and auditors. This shift demands a new kind of oracle logic—one that blends transparency with trust in verified, off-chain data sources.

“Oracles for RWAs aren’t always about speed—they’re about accuracy and auditability,” said Kaźmierczak. “Sometines you’re dealing with assets that don’t trade or move in value constantly, but that carry real-world legal and financial obligations. Our job is to make sure DeFi can interface with that reality in a robust, composable, and secure way.”

As tokenized products proliferate, so do the ecosystems built to support them. The report highlights how protocols like Morpho v2, Spark, Maple, Aave Horizon and Pendle Citadels are bringing institutional capital into DeFi through structured, regulatory-friendly mechanisms. These platforms enable accredited investors to access high-quality tokenized credit products while also allowing retail participants to supply liquidity or access derivative opportunities—creating a hybrid model that bridges previously siloed markets.

The report also charts the adoption of RWA activity across major blockchain ecosystems. Ethereum remains the clear institutional home, with over $7.5 billion in tokenized value and deep integrations across the DeFi stack. ZKSync is rising fast, driven by its dominance in private credit issuance through partners like Victory Park Capital. Meanwhile, Solana has carved out a role as a high-throughput challenger, hosting offerings from Apollo, Ondo, and others. Even newer entrants like Plume are beginning to define the retail experience for tokenized real estate, commodities, and debt.

But perhaps the most underappreciated development is happening on networks supported by TradFi giants, like Canton Network (backed by Goldman Sachs, BNP Paribas, and DTCC) public chain with privacy or permissioned JP Morgan’s Kinexys are processing trillions in tokenized repo, bonds, and credit instruments—demonstrating that the institutional future of blockchain will be multifaceted and not always visible to the crypto-native world.

“This isn’t just about making TradFi more efficient,” Kaźmierczak added. “It’s about rearchitecting the global financial system to be more open, more programmable, and more aligned with the digital economy in the age of globalization.”

The 2025 RWA in On-chain Finance Report concludes that tokenization is not a theoretical model or long-term projection—it is already happening at scale, and private credit is the clearest proof point. With trillions of dollars in traditional assets seeking better infrastructure and a DeFi ecosystem ready to accommodate them, the convergence is well underway. This study further suggests that tokenized assets may soon reach critical mass across both institutional and consumer markets, not as a new asset class, but as a fundamental upgrade to how existing capital markets operate. With real-world instruments now flowing into programmable, borderless environments, the gap between DeFi and TradFi is beginning to dissolve.

Source: RedStone