Onchain Insights
Oct 16, 2023

The State of Tokenization

The State of Tokenization

The convergence between crypto and traditional asset classes, including fiat currencies, equities, government bonds, and real estate, is experiencing an unprecedented growth. Our thesis is clearer than ever, namely, blockchains are becoming the backend infrastructure for every asset class with use cases beyond our imagination in the future. Tokenization couldn't be possible until the emergence of the Bitcoin blockchain and hereafter Ethereum introducing a global computing platform for smart contracts that led to a cambrian explosion of different variations of blockchains and distributed ledger technologies.

Tokenization is one of the fastest-growing use cases and now with our real-time dashboards anyone can follow the evolution.

  1. The value of tokenized assets across public blockchains amounts to $118.57 billion.

Ethereum accounts for over 58% or $69.16 billion of all tokenized assets and has the most vibrant ecosystem, with more than 6 million daily active users and almost 6,000 monthly active developers. Ethereum optimizes for security and decentralization, with over 800,000 validators, while other blockchains compete on speed and scalability. Tron comes second with over $45 billion of tokenized assets, while Solana comes third with the fastest settlement time of 0.4 seconds

  1. Digital dollars or USD stablecoins are the first successful tokenization implementation, representing ~10% of crypto’s total market value and ~97% of all tokenized assets.

Other asset classes amounting to 9 in total, including U.S. treasuries,  have seen significant growth this year (>450%) on the back of decades-high interest rates. However, outside USD stablecoins, most of the tokenization solutions today are still not globally accessible due to regulatory restrictions and socioeconomic circumstances, including low Internet penetration rates in emerging regions. 

  1. There are about 431 million crypto users or about ~5.36% of the world population.

The level of crypto adoption today is equivalent to internet adoption in 2000 when the number of internet users amounted to 361 million or 5.91% of the world population at the time. The countries with the highest percentage of crypto ownership tend to have a high internet and banking penetration rate. Today, holders of tokenized assets account for a little more than 10% of the estimated 431 million crypto owners, or roughly 47 million people

  1. Tokenization is likely to scale into a multi-trillion-dollar opportunity by 2030

We estimate that the market value for tokenized assets will be between $3.5 trillion in the bear-case scenario and $10 trillion in the bull case by 2030. The market value is derived from the estimated penetration rate of the total addressable market across various asset classes, including non-financial corporate debt, real estate funds, private equity, securities collateral, trade finance, and public debt securities. 

You can download the full report here

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