How Going On-Chain Unlocks a $3 Trillion Market

Background:

At DigiFT, I wrote this article as part of a comprehensive content marketing strategy to promote the firm's 'tokenization-as-a-service' business unit.

Format: 

Blog article | Published 27 May 2025 here

Why asset managers are moving to tokenize—and how on-chain capital is ready for real-world financial products.

The Capital Is Already Here

Crypto isn’t waiting for traditional finance to catch up. Today, over $3 trillion circulate on public blockchains, including:

• Bitcoin (BTC): ~$2T

• Ethereum (ETH): ~$290M

• Stablecoins (USDC & USDT): ~ $210M

• Alternative Coins (XRP, BNB, SOL): ~$310M

Source: CoinMarketCap (as of 23 May 2025)

This capital powers exchanges, decentralized autonomous organizations (DAOs), treasuries, and increasingly—regulated income-generating assets. But unlike speculative cycles of the past, demand today is driven by:

• Institutional derisking and rate sensitivity

• Demand for short-duration yield

• Underutilized stablecoin capital

• Growing appetite for real-world diversification on-chain

This brings us to the next frontier: tokenized real-world assets (RWAs)—and the infrastructure required to activate them.

What’s a Real-World Asset?

RWAs are tangible financial products—such as money market funds, private credit, or corporate bonds that can be tokenized and issued on the blockchain. Tokenization preserves the structure of the asset (e.g., yield, maturity, liquidity), while unlocking:

• 24/7 digital access

• Programmable settlement

• Global reach via digital wallets

• Composability with on-chain strategies

But tokenization is just the start. The real unlock is distribution—ensuring the product can reach capital, integrate into workflows, and generate use-case demand.

There’s Proof of Demand

On-chain capital is already buying into tokenized traditional finance (TradFi) products. Two major examples highlight this momentum:

BlackRock USD Institutional Digital Liquidity Fund (BUIDL): Launched in 2024, BUIDL is a tokenized fund investing in U.S. Treasuries and repurchase agreements, managed by BlackRock. Within just 14 months, BUIDL’s total value locked (TVL) has grown from $0 to $2.9 billion—making it one of the most successful RWA products to date.

Today, it is accessible via multiple blockchains, including Aptos, Arbitrum, Avalanche, Ethereum, Optimism, and Polygon.

MARKET CAP OF ‘BUIDL‘
As of 24 May 2025 

Source: RWA.xyz 

Franklin OnChain U.S. Government Money Fund (FOBXX): FOBXX is the first U.S.-registered mutual fund to use a public blockchain to record transactions and share ownership.

Managed by Franklin Templeton, the fund is accessible via the BENJI token and deployed on Stellar, Polygon, Avalanche, and Arbitrum. In May 2025, BENJI hit an all-time TVL record of $766M.

MARKET CAP OF ‘FOBXX/BENJI’

As of 24 May 2025 

Source: RWA.xyz

TVL refers to the amount of capital actively deployed into a product—functionally equivalent to AUM in TradFi. This explosive growth reflects real, on-chain allocator demand for regulated, yield-bearing assets from institutional issuers.

These aren’t pilot projects—they’re proof points that well-structured, well-distributed tokenized funds can thrive on-chain.

The Trend Is Accelerating

The growth in BUIDL and BENJI isn’t isolated—it’s part of a larger wave. Just in the last few months, several trends have made it clear: the tokenized RWA market is entering a new phase of institutional legitimacy, real-world usability, and investor relevance.

• Regulators are embracing tokenization: In March 2025, the Monetary Authority of Singapore (MAS) approved the first tokenized fund for retail investors, starting with Franklin Templeton’s tokenized money market product. This opens the door for broader investor access to traditionally institutional-only vehicles.

• Tokenized assets are scaling fast: The total value of tokenized real-world assets hit $14 billion in April 2025. The market is no longer conceptual—it’s live, growing, and commanding serious capital across fixed income, credit, and alternatives.

• Ethereum is becoming the default RWA base layer: As of May 2025, Ethereum hosts over 55% of all tokenized RWAs, including U.S. Treasuries, private credit, real estate, and tokenized equity. The composability, wallet support, and liquidity depth on Ethereum are making it the go-to infrastructure for issuers.

• RWA use cases are expanding into DeFi: Tokenized assets are now being used not just for holding yield, but to unlock broader DeFi integrations—collateralized lending, DAO treasury deployment, and yield vaults. This turns RWAs from passive wrappers into programmable financial infrastructure.

From Tokenization to Market Activation

Many issuers see tokenization as the finish line. But to unlock real adoption, tokenized funds must be:

• Accessible via compliant wallets and custodians

• Trusted with legal and operational integrity

• Composable in structured products or decentralized finance (DeFi) ecosystems

When tokenized funds are structured and distributed effectively, on-chain capital responds. The infrastructure is here. The demand is here. What’s missing for many issuers is a trusted way to tap into it.

RWAs in Action

Many issuers are ready to go on-chain—but need a partner that doesn’t stop at tokenization. As a regulated exchange that is purpose-built for tokenized, institutional-grade RWAs, DigiFT helps activate the market through end-to-end integration.

How DigiFT Activated the Market for uMINT:

• Custodial Infrastructure: To ensure institutional readiness, DigiFT integrated uMINT with top-tier custodians like Copper Securities and Komainu, unlocking participation from institutional allocators with strict compliance requirements.

• DeFi Integrations: DigiFT enabled uMINT in yield-bearing strategies on DeFi-native platforms like Plume and BounceBit—platforms collectively representing over $110 million TVL as of May 2025, according to DeFiLlama, Blockchain News. For asset managers, this reflects real on-chain capital and usage capacity for tokenized products—and in this case—a $110 million capital pool.

• Spend & Earn Utility: DigiFT partnered with Amber Premium to integrate uMINT into the Amber Premium Crypto Card—enabling users to earn institutional-grade yield while spending via Visa. This gave uMINT access to Amber Premium’s HNWI and institutional flows, adding a real-world utility layer to a previously static money market allocation.

• Structured Finance Distribution: DigiFT worked with digital asset product issuers like TDX Strategies to embed uMINT into structured products—enhancing yield, risk management, and credit-worthiness for end investors.

uMINT now functions not just as a token, but as a composable, compliant building block across custody, DeFi, structured finance, and yield-bearing apps.

How DigiFT Activated the Market for iSNR:

• Multi-Chain Deployment: Natively issued on Ethereum and Arbitrum, iSNR is able to tap into a global institutional and DeFi-native investor base. Together, these chains represent over $74 billion in TVL as of May 2025, providing substantial liquidity and distribution opportunities.

• Private Credit Without Lockups: Traditional private credit strategies often require multi-year lock-ins and allow redemptions only quarterly or annually. Even some tokenized private credit strategies today offer only quarterly liquidity. iSNR was designed with daily liquidity, enabling new markets (such as hedge funds, DAOs, DeFi treasuries, fintechs) to access credit exposure without liquidity constraints.

• Composability via RWA Protocols: We’ve embedded iSNR into Plume Nest (a DeFi RWA staking vault) and IOST Vault (a blockchain infrastructure provider), allowing iSNR to function as a tokenized income layer, seamlessly embedded into DeFi yield vaults while preserving institutional-grade credit exposure. Beyond access, iSNR can serve as a modular yield layer that can be combined with other strategies as part of a stackable income strategy—designed to work alongside existing stablecoin, staking, or structured yield positions.

We’ve transformed iSNR from a niche private credit strategy into a live, composable component of the DeFi yield stack—used by DAOs, treasuries, and product issuers seeking stable, real-world credit returns.

Why Now?

The market is ready for tokenized RWAs. With over $10 billion in TVL, RWAs have emerged as one of the fastest-growing segments in the DeFi landscape. This growth is fueled by the demand for stable, yield-generating assets amidst peaking risk-free rates. Moreover, the heightened market volatility in 2025 has prompted investors to seek safer, yield-bearing alternatives.

On-chain capital is active and abundant, awaiting the right products to deploy into. For asset managers, fintech innovators, and product builders, the opportunity to bring funds on-chain has never been more compelling.

Ready to bring your fund on-chain? Talk to us.

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