Tokenization of Real-World Assets Gains Momentum in Decentralized Finance

According to Blockworks, 2023 has been a significant year for tokenization in decentralized finance (DeFi), with institutional interest in the space growing. Ben Forman, managing partner at ParaFi Capital, revealed that institutional entities like JPMorgan, Invesco, and KKR are increasingly excited about the tokenization of real-world assets. Forman estimates that 150 to 200 different teams are currently working in the real-world asset (RWA) category, with 500 to 1000 pilots set to launch in the coming years.Forman sees growing interest in the tokenization of traditional assets, such as tokenized gold, treasuries, LP stakes, and funds. Additionally, he highlights the development of non-financial asset tokenization, citing examples like the California DMV tokenizing 14 million automobile titles, university diplomas, identity credentials, and concert tickets. Forman believes that many of these assets will bypass legacy financial market infrastructure and move directly on-chain.Investor Santiago Santos notes the advantages of moving RWAs on-chain, such as more efficient pricing and real-time risk measurement. Forman suggests that unconventional asset classes that don't exist in traditional capital markets could be the most interesting on-chain due to the transparency around payments and securitization potential.