Why Tokenized Asset Usage Looks Low—and Why That Might Be Wrong
Most numbers miss how tokenized assets are actually used
The share of tokenized real-world assets being used in DeFi is reported as anywhere from under 1% to 11.7%. Some estimates go as high as nearly 20%. All of these figures were published this year.
The lowest figure gets the most attention. It claims that of roughly $51 billion in tokenized real-world assets on public blockchains, only a single-digit percentage is actually active. This is often used to argue that onchain finance is not yet a serious market.
According to a recent analysis by Matthew Fisher of Katana, those figures can be misleading. Both sides of the ratio—what is being counted as active and what is being counted as total supply—do not capture the full picture.
Why the total number is not a clean comparison
About 47% of the $51 billion in onchain tokenized real-world assets is private credit. Private credit is not very liquid even in traditional finance. Tokenizing it does not change its redemption schedule or the type of investors who hold it.
Including private credit in usage calculations creates a mismatch. That asset class was never designed to move frequently, so counting it as inactive is a measurement error, not proof of failure.
Other large tokenized products were built with strict transfer limits and whitelists. These restrictions make it difficult or impossible for them to function as collateral in open lending markets.
Three reasons utilization metrics look low
Restricted by design: Some assets have accreditation gates, transfer agents, or whitelist requirements that block permissionless use. Fisher identifies this as the only true failure category.
Parked by intent: Some holders do not plan to use their tokens in DeFi. For example, a foundation may hold a major tokenized fund to gain access to a specific blockchain ecosystem rather than to generate yield. Comparing these holders to others who specifically want DeFi use skews the data.
Used invisibly: Several large tokenized assets are used as collateral outside of open smart contract systems. Examples include off-exchange collateral arrangements and accepted derivatives margin. Because these activities happen away from public onchain trackers, they do not show up in standard utilization data.
The real bottleneck is settlement speed
Even when a tokenized asset is usable, the timing of settlements creates friction. In crypto, looping collateral—depositing an asset, borrowing against it, and repeating—can happen instantly.
Tokenized real-world assets settle on T+1, T+2, or quarterly redemption calendars. Building leverage with these assets requires sequential steps. A four-times leveraged position on a T+1 asset can take eight days to build and eight days to unwind.
Fisher noted this issue while working on bringing Apollo’s ACRED onchain as collateral. While the experiment proved the concept, the quarterly redemption timeline made rapid unwinding impractical. The mismatch is between instruments built for slow liquidity and markets that move quickly.
Newer protocols aim to fix the timing problem
Some newer projects are building around these settlement constraints. For example, protocols like 3F use onchain auctions to front capital for leverage. This approach allows multiple settlement cycles to occur in a single step, replacing slow sequential looping.
Regulation may shape how the numbers are reported
Recent regulatory activity is also changing the environment. Stablecoin frameworks are seen as a prerequisite for institutional onchain participation. Meanwhile, guidance being written by the CFTC and SEC may reduce the compliance concerns that originally pushed issuers to add heavy restrictions.
What actually counts as success
The analysis concludes that the important metric is not how much value has been tokenized, but how much is actually posted as collateral, borrowed against, and unwound within a reasonable timeframe. Until the industry tracks that specific activity, usage data will likely remain incomplete.
