Wall Street Has $7B in Tokenized Funds, but Less Than 1% Is Actually Being Used in DeFi
Wall Street has poured billions of dollars into tokenized investment products, but most of that capital is still doing very little inside decentralized finance.
Three of the largest tokenized funds tracked by DeFiLlama — BlackRock’s BUIDL, Circle’s USYC, and Franklin Templeton’s iBENJI — represent roughly $7.23 billion in active market capitalization. Yet only about $49.7 million of that value is currently deployed across DeFi protocols.
That translates into less than 1% utilization across the group.
At the same time, a very different segment of the real-world asset market is becoming deeply integrated with decentralized lending, collateral markets, and yield protocols. Smaller private-credit, structured-credit, home-equity, and reinsurance products are putting billions of dollars to work on-chain.
The shift comes despite one of DeFi’s most difficult security periods on record.
According to DeFiLlama data, DeFi experienced 99 hacks during the second quarter of 2026 — the highest quarterly total in its database. Nevertheless, real-world assets actively deployed inside DeFi have climbed to approximately $3.97 billion, setting a new all-time high.
That divergence highlights an important trend: security risks have not stopped tokenized real-world assets from becoming increasingly composable.
DeFi Turns Tokenized Assets Into Financial Building Blocks
Tokenization alone simply represents an asset on a blockchain. DeFi gives that asset something to do.
Once integrated into decentralized protocols, tokenized assets can become collateral for loans, provide liquidity, generate yield, trade on secondary markets, or serve as building blocks for more complex financial products.
DeFiLlama currently estimates the total active market capitalization of real-world assets at approximately $33.9 billion, while total on-chain market capitalization stands near $36.7 billion.
Of that amount, roughly $3.97 billion is actively deployed inside DeFi.
That means about 11.7% of active RWA value is currently being used in lending markets, liquidity pools, yield strategies, and related decentralized applications.
The percentage remains relatively small, but the composition of that $3.97 billion is revealing.
Large institutional money-market products remain mostly outside open DeFi infrastructure, while private-credit and structured-credit tokens are seeing much higher utilization rates.
DeFi Security Risks Have Not Stopped RWA Growth
The new RWA DeFi record is particularly notable given the sector’s recent security problems.
DeFiLlama analyzed 59 historical exploits involving protocols with meaningful total value locked before an attack. According to the dataset, most exploited protocols retained less than 10% of their previous TVL following the incident.
Interestingly, the amount stolen showed almost no meaningful relationship with the amount of capital that left the protocol during the following 30 days.
In other words, users often react to the fact that a protocol was compromised rather than simply evaluating the dollar value of the loss.
That makes the continued growth of RWA capital inside DeFi significant. Even after a record quarter for hacks, tokenized assets actively integrated with decentralized protocols have reached a new high.
BlackRock BUIDL Is Huge — but Barely Used in DeFi
BlackRock’s BUIDL fund illustrates the gap between tokenization and true on-chain composability.
BUIDL has more than $2.7 billion in active market capitalization, making it the largest tokenized fund tracked in DeFiLlama’s dataset.
Yet only approximately $18.2 million is currently active inside DeFi protocols.
That represents a utilization rate of just 0.67%.
Circle’s USYC follows a similar pattern. Its active market capitalization exceeds $3 billion, but only about $31.5 million is being used in DeFi, representing utilization of roughly 1.05%.
Franklin Templeton’s iBENJI has more than $1.5 billion in active market capitalization but currently shows no DeFi Active TVL in DeFiLlama’s tracking.
Together, BUIDL, USYC, and iBENJI represent approximately $7.23 billion in active tokenized assets while contributing only around $49.7 million to DeFi.
By comparison, five smaller credit, collateralized loan obligation, home-equity, and reinsurance products have a combined active market cap of roughly $3.4 billion.
Despite representing less than half as much total value, those assets account for around $2.5 billion in DeFi — approximately 50 times more composable value.
| Tokenized Asset | Active Market Cap | DeFi Active TVL | DeFi Utilization | What It Shows |
|---|---|---|---|---|
| BlackRock BUIDL | $2.7B+ | $18.2M | 0.67% | Large institutional tokenized fund with limited DeFi usage |
| Circle USYC | $3.0B+ | $31.5M | 1.05% | Large market cap but minimal DeFi composability |
| Franklin iBENJI | $1.5B+ | $0 | 0% | Tokenized asset without meaningful DeFi deployment |
| Maple syrupUSDC | $1.43B | ~$792M | 55.39% | Private credit actively integrated with DeFi |
| Maple syrupUSDT | ~$810M | ~$741M | 91.43% | Very high utilization across decentralized markets |
| JAAA | $423M | $414.3M | 97.95% | Tokenized CLO almost entirely deployed |
| Hastra PRIME | $520.2M | $365.8M | 70.32% | Home-equity-linked credit used as collateral |
| OnRe ONyc | $247.2M | $184.6M | 74.68% | Reinsurance-linked asset integrated into DeFi |
Private Credit Is Leading Tokenized Asset Adoption in DeFi
Private credit currently represents one of the strongest examples of real-world assets becoming genuinely useful in decentralized finance.
Maple’s syrupUSDC and syrupUSDT together account for approximately $1.5 billion in DeFi Active TVL.
That represents roughly 38.6% of the entire $3.97 billion RWA value deployed across DeFi.
Both assets are yield-bearing receipt tokens linked to deposits in Maple’s Syrup lending vaults. Their exchange rates increase as interest accumulates from overcollateralized loans issued to institutional borrowers.
Instead of remaining passive tokenized representations of traditional assets, syrupUSDC and syrupUSDT can circulate throughout DeFi.
DeFiLlama tracks syrupUSDC across Ethereum, Monad, Solana, Base, and Arbitrum.
The asset appears across major protocols including Aave V3, Morpho Blue, Kamino Lend, Euler, Jupiter Lend, Uniswap, Orca, and Pendle.
syrupUSDT has a similarly broad footprint, including hundreds of millions of dollars deployed through Aave. Its utilization rate of approximately 91.43% places it among the most heavily used tokenized assets tracked.
JAAA Is Nearly 98% DeFi-Active
Janus Henderson’s Anemoy JAAA provides another striking example.
The tokenized structured-credit product has approximately $423 million in active market capitalization and $414.3 million deployed inside DeFi.
Its utilization rate stands at roughly 97.95%.
Most of that capital is concentrated in Grove Finance, which holds approximately $391.3 million. Another $18.6 million is deployed through Aave’s Horizon market for real-world assets.
Grove initially backed the strategy with a $1 billion allocation, positioning the platform as a bridge between institutional credit markets and decentralized financial infrastructure.
JAAA demonstrates how tokenized institutional credit can become more than a blockchain-based record of ownership.
Once integrated into lending infrastructure, the asset becomes usable collateral and liquidity.
Home Equity Is Also Moving Into DeFi
Hastra’s PRIME token extends the trend into consumer credit.
PRIME has approximately $520.2 million in active market capitalization, with roughly $365.8 million deployed in DeFi.
Around $218.5 million is used through Morpho Blue, while another $140.16 million is deployed through Kamino Lend.
According to Hastra, PRIME generates yield from home-equity line-of-credit lending facilitated through Figure.
That creates an unusual bridge between traditional household finance and decentralized markets.
A homeowner’s equity-backed loan can ultimately support a tokenized asset that DeFi protocols accept as collateral.
Reinsurance Is Becoming a DeFi Asset
OnRe’s ONyc token pushes RWA composability into an even less obvious category: reinsurance.
ONyc carries approximately $247.2 million in active market capitalization and about $184.6 million in DeFi Active TVL.
That represents a utilization rate of roughly 74.68%.
Most of the asset’s DeFi activity is concentrated on Solana through protocols such as Kamino Lend and Loopscale.
Reinsurance historically has little connection to crypto markets, yet tokenization makes its yield accessible to decentralized lending infrastructure.
That highlights one of DeFi’s most important potential advantages for real-world assets: once a financial instrument becomes programmable and transferable on-chain, entirely new forms of collateral and liquidity can emerge.
Aave, Morpho and Kamino Are Becoming RWA Infrastructure
The usefulness of any tokenized real-world asset ultimately depends on which protocols are willing to support it.
Aave has emerged as one of the largest destinations for RWA-linked collateral.
Its Horizon market, launched in August 2025, has surpassed $440 million in deposits.
Horizon allows qualified institutional users to borrow stablecoins against tokenized assets without having to sell or redeem their underlying positions.
That model gives institutions access to liquidity while preserving their exposure to tokenized securities.
Morpho Blue and Kamino Lend perform similar functions for assets including PRIME, syrupUSDC, and ONyc.
Meanwhile, decentralized exchanges and yield protocols such as Uniswap, Orca, and Pendle provide additional liquidity, trading, and yield-structuring opportunities.
| Asset Type | Example Tokens | Major DeFi Venues | What DeFi Enables |
|---|---|---|---|
| Private credit | syrupUSDC, syrupUSDT | Aave, Morpho, Kamino, Euler | Yield generation, collateral, and lending liquidity |
| Structured credit / CLOs | JAAA | Grove Finance, Aave Horizon | Institutional credit used as on-chain collateral |
| Home-equity-linked credit | PRIME | Morpho Blue, Kamino Lend | HELOC-backed yield becomes DeFi collateral |
| Reinsurance | ONyc | Kamino Lend, Loopscale | Insurance-linked yield enters lending markets |
| Money-market funds | BUIDL, USYC, iBENJI | Limited DeFi integration | Mostly tokenized ownership rather than composability |
| Liquidity and yield layer | syrupUSDC, PRIME, ONyc | Uniswap, Orca, Pendle | Trading, liquidity routing, and yield structuring |
Why Large Tokenized Funds Still Have Low DeFi Utilization
The contrast between institutional funds and private-credit products suggests that tokenization and DeFi adoption are developing along different paths.
Products such as BUIDL can become extremely successful without being deeply integrated into permissionless protocols.
For institutional investors, tokenization can already provide faster settlement, programmable ownership, blockchain-based recordkeeping, and easier transfers without requiring open DeFi exposure.
That means billions of dollars can move on-chain while remaining primarily inside controlled or permissioned environments.
Credit-focused products have different incentives.
Their value proposition often depends on using yield-producing assets as collateral, moving them between lending venues, accessing additional leverage, or distributing them through decentralized liquidity markets.
For those products, composability is not merely an optional feature. It can be central to the business model.
Tokenized Assets Could Grow Into a Multi-Trillion-Dollar Market
The long-term opportunity is much larger than today’s $33.9 billion active RWA market.
Citi’s 2026 tokenization forecast projects that the broader category could reach approximately $5.5 trillion by 2030 under its base-case scenario.
Its estimated range spans roughly $2.7 trillion to $8.2 trillion.
Much of that expansion is expected to come from public securities such as equities and government debt moving onto blockchain infrastructure through hybrid financial models.
For DeFi, however, the more important question is not simply how large tokenization becomes.
The question is how much of that value becomes usable.
Today, approximately 11.7% of active RWA value is deployed in DeFi. That percentage could rise significantly if future tokenized assets are designed from launch to function as collateral, lending liquidity, or yield primitives.
Alternatively, institutional issuers could favor closed, permissioned ecosystems that provide blockchain settlement without open DeFi composability.
Four Possible Paths for RWA DeFi
The next stage of tokenized asset adoption could develop in several ways.
| Scenario | RWA DeFi Active TVL Path | Main Driver | Potential Outcome |
|---|---|---|---|
| Bull case | $5B-$6B+ | More assets launched as collateral and yield primitives | DeFi becomes a primary operating layer for tokenized credit |
| Base case | Gradual growth around or above $4B | Private credit, CLOs, PRIME, and reinsurance continue leading | Composability expands but remains concentrated |
| Bear case | Falls toward $2B-$3B | Major exploit affects an RWA-dependent protocol or bridge | Issuers reduce integrations and prioritize custody |
| Walled-garden case | Tokenization grows while DeFi share stagnates | Institutions favor permissioned infrastructure | RWA adoption explodes, but open composability remains limited |
Bull Case: DeFi Becomes the RWA Operating Layer
In the strongest scenario, more issuers follow the approach already used by Maple, Grove, and Hastra.
Assets are built from day one to function as collateral and yield-bearing primitives.
Aave Horizon-style markets expand, Morpho and Kamino support additional tokenized assets, and RWA DeFi Active TVL climbs beyond $5 billion or even $6 billion.
Under that scenario, the share of tokenized assets actively used in DeFi could rise well above today’s 11.7%.
DeFi would increasingly become the infrastructure layer surrounding tokenized credit markets.
Base Case: Specialized Credit Keeps Leading
A more moderate scenario would see RWA DeFi continue growing while remaining concentrated in a relatively small group of products.
Private credit, CLOs, home-equity-linked assets, and reinsurance tokens could continue gaining adoption because they benefit directly from collateralization and lending integrations.
Large tokenized money-market funds, meanwhile, could remain mostly outside open DeFi.
Bear Case: Another Major Hack Slows Adoption
Security remains the largest structural risk.
DeFiLlama’s historical exploit analysis suggests that protocols can lose most of their TVL after being hacked regardless of the amount stolen.
If a major RWA-focused lending market, protocol, or bridge suffered a serious exploit, institutional issuers could react quickly.
Integrations could be reduced, collateral requirements tightened, and issuers could prioritize custody and settlement over permissionless composability.
Under that scenario, RWA DeFi Active TVL could fall toward the $2 billion to $3 billion range.
Walled-Garden Case: Tokenization Wins, but DeFi Does Not
There is also a scenario where tokenization becomes enormous while open DeFi captures only a small portion of the market.
Institutions may prefer permissioned trading venues, regulated collateral markets, and tightly controlled blockchain networks.
That could push the total value of tokenized securities into the trillions while leaving permissionless DeFi as a comparatively narrow market.
The Bigger Story Is Not Tokenization — It Is Utilization
The nearly $4 billion of tokenized real-world assets now active inside DeFi represents more than another TVL milestone.
It shows the difference between putting an asset on a blockchain and making that asset genuinely useful on-chain.
BlackRock BUIDL, Circle USYC, and Franklin Templeton iBENJI together represent more than $7 billion in tokenized value, yet only a tiny portion is currently being used across DeFi.
Meanwhile, smaller private-credit, structured-credit, home-equity, and reinsurance products are achieving utilization rates of 55%, 70%, 90%, and even nearly 98%.
That gap could become one of the defining stories of the RWA market.
Tokenization may bring trillions of dollars onto blockchains. But DeFi will determine how much of that capital can actually move, borrow, lend, generate yield, and interact with the rest of the on-chain financial system.
For now, nearly $4 billion in tokenized assets are already doing exactly that.
