RWA makes a leap in the DeFi asset size race, surpasses DEX, and rises to the 5th place

According to the latest analysis by DefiLlama, the Real-World Assets (RWA) sector is experiencing a significant turning point in the total value locked (TVL) rankings within the decentralized finance (DeFi) space. Once outside the top 10, RWA has surpassed decentralized exchanges (DEXs) and risen to the fifth position, following lending, liquid staking, bridging, and staking.

Rapid Capital Inflows Indicate RWA Sector Maturity

The TVL of RWA protocols has steadily expanded from $12 billion in Q4 2024 to $17 billion today. This growth rate of over 40 percent signifies that it is not just a temporary trend but a sign of genuine institutional investor engagement.

The data analysis team at DefiLlama is also paying close attention to this rapid change, noting that the sharp rise from the low valuation of RWA at the beginning of the year to its current trajectory suggests a fundamental shift in market structure.

Long-term Yield Strategies Attracting Institutional Money

Vincent Liu, Chief Investment Officer at Kronos Research, analyzes the essence of this RWA growth as a “shift from experimental stages to practical balance sheet optimization.” Instead of short-term token incentives, continuous and stable yields offered by tokenized US Treasuries and private credit are attracting institutional investors.

These developments are accelerating amid regulatory improvements and increased transparency. As barriers to institutional entry decrease, the RWA sector is rapidly moving toward mainstream adoption.

Tokenized US Treasuries Lead Sector Growth

Of particular note is the rapid growth of the tokenized US Treasury segment. Major asset management firms, including the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), have raised billions of dollars throughout 2025. The digital assets and traditional finance connection functions provided by these platforms serve as crucial gateways for institutional investors.

As Liu points out, the current constraints are no longer technological but relate to liquidity integration across different blockchains and between digital and traditional finance systems.

Commodity Rise Promotes Diversification of RWA

Amid rising concerns over inflation and dollar devaluation, demand for precious metals like gold and silver is increasing. This commodities cycle is also impacting the tokenized product sector, with gold-related products such as Tether Gold and Paxos Gold leading the way, bringing the market cap of tokenized commodities close to $4 billion.

Thanks to the gold and silver trends, tokenized commodities, once niche, have evolved into a robust asset class with macroeconomic demand. Clear price discovery mechanisms and storage standards facilitate smoother integration with DeFi protocols and traditional financial systems.

Interoperability Opens Next Growth Stage

Liu predicts that the true acceleration of the RWA sector will come from shifting from isolated protocol functions to seamless cross-chain and cross-platform asset flows.

Looking ahead to 2026, the market focus is expected to move from TVL figures to more fundamental factors such as issuer creditworthiness, collateral utilization scenarios, and transaction flows between liquidity centers. The RWA sector is maturing from a mere numbers game into a practical financial infrastructure.