Real world assets (RWAs) in cryptocurrencies have a long history, starting with legally supported stablecoins such as Tether (USDT). However, since the launch of DeFi in 2020 and the bear market in 2022, more diverse RWAs have been tokenized to meet the needs of on chain investors. Although risk weighted assets are still mainly concentrated in debt/credit, other assets such as real estate, art, and collectibles have also sparked investor interest.

Fundamentally, RWA projects are at the intersection of the real world and blockchain, issuers, and investors. Whether they can act as effective intermediaries at these intersections will be the key to their success. Although it is inevitable to rely on third parties, such as oracle machines, custodians, credit rating agencies, etc., how to effectively utilize and manage these third parties is still crucial for their continuous operation.

Four highlights of CoinGecko's 2024 RWA report: the rise of real-world assets

Assets pegged to the US dollar dominate the stablecoins supported by fiat currency, accounting for 99% of all stablecoins
The market value of product supported tokens reached $1.1B, and gold remains the most popular commodity
Tokenized treasury bond products will increase by 641% in 2023, with a current value of more than 861 million dollars
The demand for private credit is mainly concentrated in the automotive industry, accounting for 42% of all loans

Introduction: What is Real World Assets (RWAs)?

Real world assets (RWAs) in cryptocurrencies refer to tokenization that brings tangible assets present in the physical world onto the chain. This includes the increasing issuance of on chain capital market products, where digital securities are tokenized and provided to retail customers. Examples include real estate, art, commodities, and even stocks that users can purchase through licensed platforms.

One of the earliest forms of RWA existed in the form of stablecoins. The existence of stablecoins as tokenized versions of legal tender allows for the provision of stable exchange units in unstable environments. Since 2014, companies such as Tether and Circle have issued tokenized stable assets supported by real-world collateral such as bank deposits, short-term bills, and even physical gold.

In 2021 and 2022, the private credit market that emerged through unsecured lending platforms such as Maple, Goldfinch, and Clearpool allowed mature institutions to borrow funds based on their creditworthiness. However, these protocols were affected by the crashes of Luna, 3AC, and FTX, resulting in serious breaches.

With the significant decline of DeFi yield in 2023 and the influx of users into the rising interest rate of US treasury bond bonds, tokenized treasury bond have seen explosive growth. With the TVL of token treasury bond soaring from $114 million in January 2023 to $845 million at the end of the year, Ondo Finance, Franklin Templeton, OpenEden and other providers ushered in a large amount of capital inflows.

1. US dollar pegged assets dominate legal stablecoins

Currently, most real-world assets (RWAs) are stablecoins pegged to the US dollar.

The top three US dollar stablecoins alone account for 95% of the market, with Tether (USDT) at $96.1 billion, USDC (USDC) at $26.8 billion, and Dai (DAI) at $4.9 billion. USDT continues to dominate with a market share of 71.4%. At the same time, after a brief decoupling during the US banking crisis in March 2023, USDC's market share significantly declined but failed to recover.

Stable assets other than stablecoins pegged to the US dollar only account for 1% of the market. These assets include other fiat currencies such as Euro Tether (EUR T), CNH Tether (CNHT), Mexican peso Tether (MXNT), EUR C (EUR C), Stasis Euro (EUR S), and BiLira (TRYB).

The market value of stable assets rapidly increased from $5.2 billion at the beginning of 2020 to a peak of $150.1 billion in March 2022, and then gradually declined throughout the bear market. However, by 2024, its market value will increase by 4.9%, from $128.2 billion at the beginning of the year to $134.6 billion as of February 1.

2. The product supports a token market value of $1.1B, and gold remains the most popular product


Tokenized precious metals such as Tether Gold (XAUT) and PAX Gold (PAXG) account for 83% of the market value of commodity supported tokens. Tokens such as XAUT and PAXG are supported by one troy ounce of physical gold, while Kinesis Gold (KAU) and VeraOne (VRO) are supported by one gram of gold.

Although token based precious metals dominate, tokens supported by other commodities have also been launched. For example, the Uranium308 project released tokenized uranium, which is priced at 1 pound of U3O8 uranium compound. It can even be redeemed, but first it needs to go through strict compliance agreements.

Although the market value of tokens supported by the product reaches 1.1 billion US dollars, it only accounts for 0.8% of the market value of legally supported stablecoins.


3. Tokenized treasury bond products increased by 641% in 2023, with the current value of more than 861 million dollars

Tokenized US treasury bond soared in popularity during the bear market, and their market value increased by 641% in 2023, from $114 million to $845 million. However, this momentum has come to a halt since 2024, with a growth of 1.9% in January and a market value of $861 million.

Franklin Templeton is currently the largest issuer of token based US treasury bond, and the US government monetary fund on his chain has issued US $332 million of tokens. This makes its market share slightly higher than 38.6%.

Profitable stablecoin issuers such as Mountain Protocol and Ondo Finance are also popular. As of February 2024, Mountain Protocol has minted $154 million in Mountain Protocol USD (USDM) tokens since its establishment in September 2023, while Ondo's market value is $132.4 million with an Ondo USD yield (USD).

Most tokenized vaults are based on Ethereum, with a market share of 57.5%. However, companies such as Franklin Templeton and Wisdomtree Prime have chosen to issue on Stellar, which currently holds a dominant position of 39%.


4. The demand for private credit is mainly concentrated in the automotive industry, accounting for 42% of all loans

Of the $470.3 million outstanding loans issued under private credit agreements, 42% (or $196 million) were used for car loans. At the same time, the debt of the fintech and real estate industries accounts for only 19% and 9% respectively.

In 2023, automobile loans saw a significant increase, with 60 loans disbursed exceeding 168 million US dollars. During the same period, the fintech industry did not issue new loans.

The real estate and cryptocurrency trading sectors have received a total of 840 loans, but currently only 10% of the loans are active. The rest have been repaid, and some have defaulted. It is worth noting that after the collapse of Terra and Three Arrows Capital (3AC), there were 13 loan defaults in the cryptocurrency trading sector.

In terms of borrower demographics, most companies come from emerging markets such as Africa, Southeast Asia, Central America, and South America. 40.8% of the 42 loans or all loans come from African countries.