Key developments in asset tokenization, with private credit leading the race, highlights 0xResearch newsletter analysis.
Facing increasing pressure and optimistic projections from major players like BlackRock CEO Larry Fink, the movement to tokenize traditional assets is gathering pace. Fink advocated for tokenization in his latest 2025 investor letter, envisioning significant efficiency gains for financial markets.
Private credit leads this tokenization trend. According to 0xResearch data partner RWA.xyz, nearly $12.9 billion of private credit is currently represented on-chain as tokenized assets, dwarfing tokenized U.S. Treasuries ($6.2 billion), commodities ($1.4 billion), and equities ($484 million).
Private credit markets, traditionally a $2 trillion global sector poised for growth to $3 trillion by 2028 (per Moody’s), face inherent limitations that tokenization seeks to overcome:
- Limited Access: Participation is restricted to accredited investors due to regulatory constraints.
- Illiquidity: The lack of a public market makes these assets hard to trade easily.
- Transparency Issues: Multi-year maturities and the absence of standardized pricing require higher yields (typically 8-12%) to counter these risks, stemming partly from a lack of transparency in valuations.
Blockchain technology offers potential solutions to address these challenges by improving liquidity, transparency, and access. Consequently, several companies, often leveraging DeFi infrastructure, are majorly investing in tokenizing private credit, tapping into this large market.
A snapshot of DeFi on-chain credit
Various platforms are spearheading this effort. Figure, the leading player with approximately $9.9 billion in active loans, issues ERC-20 tokens or ERC-721 NFTs governed by smart contracts for its Home Equity Lines of Credit (HELOCs), tokenized primarily on the Provenance blockchain.
Tradable has tokenized over $1.8 billion in institutional-grade assets on the ZKsync L2 chain, encompassing a range of positions like fintech loans, legal receivables, and even music royalties.
Maple Finance utilizes a pooled structure with “pool delegates” and its Syrup platform uniquely allows retail investors to access yields from the private credit market.
Despite these innovations, tokenized private credit assets remain largely regulated securities. Most platforms implement geo-fencing and KYC/AML measures to maintain investor restrictions.
Nearly halfway to $20 billion in overall on-chain RWA tokenization (including real estate, commodities, intellectual property, etc.), Keyrock estimates on-chain private credit is set for significant growth. By 2026, Keyrock projects on-chain private credit could reach between $15 billion and $17.5 billion.
Decor (Sources: Larry Fink 2025 Investor Letter, RWA.xyz, Moody’s, Keyrock)
