Tokenized RWA DeFi Usage May Be Closer to 20% Than 1%

The adoption of tokenized real-world assets (RWAs) in decentralized finance remains difficult to measure, with 2026 estimates ranging from below 1% to nearly 20%. While each figure can be supported by available data, the wide gap largely reflects differences in what researchers count as both tokenized assets and active DeFi usage.

The frequently cited sub-1% estimate focuses on BlackRock’s BUIDL, Circle’s USYC and Franklin Templeton’s iBENJI. Together, the tokenized money market funds hold about $7.2 billion, while roughly $50 million is reportedly deployed. Broader measurements paint a different picture. DeFiLlama data suggests utilization around 11.7%, while CoinShares reported approximately $7.4 billion in tokenized RWA deposits during the second quarter. Compared with RWA.xyz’s roughly $38 billion market estimate, that implies utilization near 19%.

One problem is the denominator. Bernstein estimates private credit represents about 47% of the roughly $51 billion tokenized RWA market. Private credit is naturally illiquid and typically follows fixed redemption schedules, meaning tokenization does not automatically make these assets suitable for active DeFi strategies.

Other assets face regulatory restrictions such as investor whitelists, accreditation requirements and transfer-agent controls. Meanwhile, some tokenized assets are held simply for yield or strategic reasons rather than DeFi deployment.

Traditional DeFi metrics can also miss genuine activity. Franklin Templeton’s BENJI has been used as off-exchange collateral, while BUIDL can serve as derivatives margin. Tokenized equities can similarly support leveraged trading on centralized platforms. Such activity may not appear in trackers focused on assets locked inside smart contracts.

Settlement remains an even bigger obstacle. Crypto-native assets can often be borrowed, leveraged and unwound almost instantly. Tokenized securities may settle on T+1, T+2 or longer redemption schedules, making leveraged strategies significantly slower. Assets with quarterly redemptions are particularly difficult to integrate into markets that operate continuously.

Newer DeFi infrastructure, including Morpho-based approaches, aims to reduce these settlement bottlenecks through mechanisms that provide leverage more efficiently.

Ultimately, tokenized RWA growth should not be judged solely by market capitalization. The more meaningful measures are how much tokenized collateral is actively used, how easily investors can borrow against it, and how quickly positions can be unwound.