DeFi Protocols Expanding Into Tokenized Real-World Assets, Report

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• A new report shows that DeFi protocols are embracing tokenized real-world assets
• The report also indicates that crypto projects are focusing more on user-facing apps and onboarding institutional clients
• The total value locked in DeFi protocols has increased by over 50% in a year

DeFi protocols are expanding into tokenized real-world assets (RWAs) according to a new report by blockchain analytics firm Artemis. Artemis also observed that the total value locked in these protocols has increased by over 50% in a year, noting that crypto projects are shifting to user-facing apps and courting institutional clients, rather than offering high yields as seen during the last bull cycle. According to the report, DeFi platforms are no longer “merely yield platforms [but] modular financial networks undergoing rapid institutionalization,” signalling a shift from a hype-based model to solving actual financial problems.

Blockchain-Based US Treasury Bills

The report noted that RWAs bring yields from off-chain assets like US Treasury bills onto blockchain networks. This shift brings traditional financial assets into the decentralized world and transforms conventional “fixed-income yields into programmable onchain components.”

Artemis disclosed that tokenized US Treasuries increased by more than $3 billion between January and June this year, bringing “a new audience into DeFi.” It also noted that DeFi protocols are embracing yield trading markets and tokenized strategies like yield-bearing stablecoins.

According to Artemis, “institutional appetite for onchain infrastructure is steadily building” due to the unique DeFi benefits like composable and transparent financial infrastructure, and not primarily by “the absolute highest APYs.”

Embedding DeFi Into Crypto Projects

Apart from RWAs, crypto projects are also embedding DeFi infrastructure in their workflows, something that abstracts the complexity of DeFi from users. Coinbase, for example, allows users to interact with DeFi lender Morpho.

The report comes as more entities like the Ethereum Foundation increase their interaction with the DeFi world through depositing, borrowing, and publishing new policies to guide their interaction with the DeFi world. It also comes two days after Consensys founder Joseph Lubin said that Wall Street is ready to embrace DeFi.

With tokenized RWAs coming onchain, it’s to be seen whether they’ll gain widespread adoption from existing DeFi users.