Tokenization Wealth Remains Elusive for DeFi Protocols

The tokenization of real-world assets has reached $31 billion in value, but most of this wealth remains inaccessible to decentralized finance (DeFi) protocols. According to a recent analysis by DWF Ventures, only around 10% or $3 billion of these assets are actively engaged with DeFi, while the rest is locked up in wallets with minimal activity.

This skewed distribution reflects the dominance of institutional issuers like BlackRock and Securitize in the tokenization market. These entities originate and custody the assets, but their interfaces are often incompatible with permissionless DeFi protocols. As a result, secondary liquidity remains a significant bottleneck for tokenized assets.

Top US Treasury tokens such as BUIDL, WTGXX, and BENJI exhibit low transfer volumes, averaging fewer than 30 transfers per month. The primary reason is the restrictive nature of issuance, redemption delays, and KYC requirements that create barriers to seamless DeFi integration.