Tokenized real-world asset market shows high levels of idle capital

The market for tokenized real-world assets (RWA) has reached significant valuations, with estimates ranging from $34.6 billion to $51 billion living on public blockchains. However, a substantial portion of this capital remains idle rather than being actively deployed within decentralized finance (DeFi) protocols.

Utilization rates vary drastically depending on the measurement methodology used. When measuring pure DeFi composability—such as tokens flowing through lending protocols and liquidity pools—utilization for major products like BlackRock’s BUIDL, Franklin Templeton’s BENJI, and Circle’s USYC is reported to be below 1%. In contrast, assets specifically designed for use as collateral, such as Centrifuge’s JAAA and Re Protocol’s reUSD, show utilization rates exceeding 97%.

Experts suggest that low utilization figures may be misleading. Artem Tolkachev of Falcon Finance notes that analysts must distinguish between assets intended for yield, which may sit idle while fulfilling their purpose, and those built to be borrowed against. Additionally, structural factors such as compliance-driven whitelists and transfer restrictions in smart contracts prevent many tokenized assets from being easily moved into standard DeFi protocols.