Tokenization of assets in 2024: 5 RWA projects changing the investment landscape

Tokenized assets are gradually transforming from a theoretical concept into a vibrant market reality. In 2024, we are witnessing a surge in Real World Assets (RWA) projects—platforms that bring real assets into the blockchain world, expanding investment opportunities for millions of global investors.

From Colored Coins to Ethereum: A 15-Year Journey of Asset Tokenization

The idea of asset tokenization is not new. Its development began in the early 2010s when pioneering developers experimented with “colored coins” on the Bitcoin blockchain. However, this was just the initial step with limited scope.

The real turning point came in 2015 when Ethereum launched, providing a flexible, highly programmable platform. Ethereum’s smart contract technology opened up the possibility of tokenizing a wide range of assets—from real estate and bonds to complex financial instruments.

Since 2015, the asset tokenization market has experienced significant growth phases. According to data from BCG X ADDX, the total market size of real-world asset tokenization has multiplied many times over, reflecting increasing recognition of this technology’s potential.

Why Asset Tokenization Is Creating a Revolution in DeFi

Asset tokenization offers a range of fundamental benefits that are transforming how investors access financial opportunities.

Unlocking Liquidity for Traditional Assets

Traditional assets like real estate or art are often considered illiquid. Tokenization enables these assets to be traded on blockchain platforms quickly and efficiently. This opens markets to millions of investors who previously faced high barriers due to minimum investment thresholds.

Democratizing Investment Access

Tokenization allows high-value assets to be divided into smaller parts. A real estate property worth millions can be split into thousands of tokens, each representing a small share of the asset. This democratizes investment, enabling ordinary investors to participate in opportunities they previously couldn’t access.

Diversifying Investment Portfolios

Crypto investors can now diversify their holdings beyond cryptocurrencies to include real estate, precious metals, government bonds, and other financial instruments. This diversification helps reduce risk and enhances long-term profit potential.

Borderless Global Reach

Through blockchain technology and crypto exchanges, asset tokenization breaks down geographical barriers. An investor in Vietnam can now own tokens representing real estate in the U.S. or bonds from other countries. This capability significantly expands the global financial market.

Enhanced Transparency and Security

Blockchain technology records all transactions and ownership rights in an immutable way. This creates higher levels of transparency and trust compared to traditional financial systems, addressing concerns about fraud and asset security.

Notable RWA Projects Changing the Investment Landscape

Polymath: Digital Securities Issuance Platform

Founded in 2017, Polymath has established itself as a key player in the asset tokenization space. It specializes in issuing and managing security tokens compliant with legal regulations.

Polymath’s strength lies in its comprehensive ecosystem. Besides its core platform, it has built a network of specialized partners, including legal advisory firms, KYC/AML services, marketing, custody, and fund management providers. Partners include Genesis Block, DWF, BitGo, and others.

Primarily operating on the Ethereum blockchain, Polymath leverages this platform’s capabilities to deliver optimized asset tokenization solutions.

Securitize: Comprehensive Digital Securities Management Platform

Founded in 2017, Securitize is a pioneer in security tokenization. Within three years, Securitize Markets became one of the top 10 stock exchanges in the U.S.

Impressively, by 2022, Securitize served over 1.2 million investor accounts and 3,000 clients. Its success stems from its ability to comply with strict regulatory standards.

While primarily utilizing Ethereum, Securitize is not tied to a specific blockchain, allowing flexible operation across multiple networks and expanding its reach.

Untangled Finance: Bridging Traditional Finance and DeFi

Founded in 2020, Untangled Finance represents a new generation of RWA projects. It launched on the Celo network, a blockchain focused on global accessibility.

In 2023, Untangled Finance announced a funding round of $13.5 million, reflecting investor confidence in its potential. Its mission is to bring private credit assets onto the blockchain, making them more liquid and accessible.

Untangled’s goal is to connect traditional finance (TradFi) with decentralized blockchain. By tokenizing credit assets, it enhances access and liquidity for financial products.

Swarm: Expert in Diverse Asset Tokenization

Swarm stands out for supporting a wide range of assets—from real estate and securities to cryptocurrencies. Its compliance-focused approach makes it suitable for traditional financial market standards.

As of October 2023, data from DefiLlama shows Swarm’s total value locked (TVL) exceeds $672 million, indicating strong community trust.

A key milestone was in July 2023, when Swarm announced a strategic partnership with Mattereum. This collaboration aims to tokenize more RWAs on blockchain, providing a comprehensive, regulation-compliant solution for asset tokenization.

Ondo Finance: Opening the Door for Tokenized Government Assets

Ondo Finance positions itself as a fintech company offering investment products focused on asset tokenization. Its flagship product is OUSG—the Ondo Short-term US Government Bond Fund.

OUSG is an ETF providing exposure to tokenized short-term U.S. Treasury securities. As of October 2023, OUSG’s assets under management (AUM) exceeded $21.4 billion and received an AA rating from S&P.

Why is OUSG impressive? Because it brings a highly secure asset—U.S. government bonds—into the blockchain space via asset tokenization. This allows low-risk investors to participate in the crypto ecosystem.

Ondo also introduced OMMF, a tokenized exposure to the U.S. Money Market Fund, expanding its RWA product offerings.

MakerDAO: Leading the Integration of RWA into DeFi

MakerDAO is one of the most established and influential DeFi protocols on Ethereum. Notably, in 2024, MakerDAO has made significant strides in integrating RWAs.

Some institutional investors have begun using MakerDAO to borrow DAI stablecoins (currently valued at $1.00 per token, based on latest data) and to tokenize U.S. Treasury bills (T-bills). This strategy allows them to leverage RWA as collateral within the DeFi ecosystem.

According to Dune Analytics, by October 2023, real-world assets accounted for over 50% of MakerDAO’s balance sheet. Out of a total TVL of over $5.5 billion, RWAs represent more than $2.7 billion. This indicates that asset tokenization is no longer a short-term trend but an integral part of the DeFi ecosystem.

Additionally, other DeFi protocols recognize RWA’s potential. Platforms like Maple, Polytrade Finance, Clearpool, and Goldfinch have listed tokenized RWAs, enabling trading and yield generation on these assets. This diversification enhances protocol liquidity and accessibility.

Asset Tokenization: A New Direction for the Global Financial Market

RWA projects and the tokenization trend are rapidly advancing for good reason. These initiatives are leading a financial investment revolution, creating a new generation of investment products.

Future trends shaping asset tokenization include:

• Expanding asset classes: Beyond real estate and bonds, tokenized assets will extend into insurance, copyrights, and intangible assets.

• Increased institutional adoption: As regulations become clearer, traditional financial institutions will more widely adopt asset tokenization.

• Market liquidity improvements: More assets being tokenized will make financial markets more liquid and easier to trade.

• Development of clear legal frameworks: Governments and regulators are working on legal standards for asset tokenization, making it safer for investors.

• Advancements in DeFi: DeFi protocols will continue evolving to better support RWAs and tokenized assets, creating new financial products.

Overall, the future of asset tokenization looks promising. With blockchain technology advancing, broader institutional adoption, and clearer regulations, asset tokenization will play a key role in shaping the future of the global financial markets. These trends will continue to drive growth and maturity in the tokenization industry in the coming years.