Author: Chi Anh, Ryan Yoon, Tiger Research
This report, written by Tiger Research, analyzes Ethereum's dominant position in the current real-world asset tokenization market, examines the structural challenges it faces, and explores which blockchain platforms are likely to lead the next phase of RWA growth.
Key Takeaways
- Ethereum currently leads the RWA market due to its first-mover advantage, past institutional experiments, deep on-chain liquidity, and decentralized architecture.
- However, general-purpose blockchains with faster and cheaper transactions, as well as RWA-specific chains designed to meet regulatory requirements, are addressing Ethereum's limitations in cost and performance. These emerging platforms are positioning themselves as next-generation infrastructure by offering superior technical scalability or built-in compliance features.
- The next phase of RWA growth will be led by chains that successfully integrate three elements: on-chain regulatory compatibility, a service ecosystem built around real-world assets, and meaningful on-chain liquidity.
1. Where is the RWA market currently growing?
The tokenization of real-world assets (RWA) has become one of the most prominent themes in the blockchain industry. Global consulting firms like BCG have released extensive market forecasts, and Tiger Research has conducted in-depth analyses of emerging markets like Indonesia—highlighting the growing importance of this field.
So, what exactly is RWA? It refers to the conversion of tangible assets such as real estate, bonds, and commodities into digital tokens. This tokenization process requires blockchain infrastructure. Currently, Ethereum is the primary infrastructure supporting these transactions.
Source: rwa.xyz, Tiger Research
Despite increasing competition, Ethereum still maintains a dominant position in the RWA market. Specialized RWA blockchains have emerged, and mature platforms like Solana in the DeFi space are also expanding into the RWA domain. Nevertheless, Ethereum still accounts for over 50% of total market activity, underscoring the solidity of its existing position.
This report examines the key factors behind Ethereum's current dominance in the RWA market and explores the evolving conditions that may shape the next phase of growth and competition.
2. Why does Ethereum maintain its leading position?
2.1. First-Mover Advantage and Institutional Trust
There are clear reasons why Ethereum has become the default platform for institutional tokenization. It was the first to introduce smart contracts and actively prepared for the RWA market.
With the support of a highly active developer community, Ethereum established key tokenization standards, such as ERC-1400 and ERC-3643, long before competing platforms emerged. This early foundation provided the necessary technical and regulatory groundwork for pilot projects.
As a result, many institutions began evaluating Ethereum before considering alternatives. Several notable initiatives from the late 2010s helped validate Ethereum's role in institutional finance:
JPMorgan's Quorum and JPM Coin (2016-2017): To support enterprise use cases, JPMorgan developed Quorum, a permissioned fork of Ethereum. The launch of JPM Coin for interbank transfers indicated that Ethereum's architecture—even in its private form—could meet regulatory requirements for data protection and compliance.
Société Générale Bond Issuance (2019): SocGen FORGE issued a €100 million secured bond on the Ethereum public mainnet. This demonstrated that regulated securities could be issued and settled on a public blockchain while minimizing the involvement of intermediaries.
European Investment Bank Digital Bond (2021): The European Investment Bank (EIB) collaborated with Goldman Sachs, Santander, and Société Générale to issue a €100 million digital bond on Ethereum. The bond was settled using central bank digital currency (CBDC) issued by the Banque de France, highlighting Ethereum's potential in fully integrated capital markets.
These successful pilot cases enhanced Ethereum's credibility. For institutions, trust is based on verified use cases and references from other regulated participants. Ethereum's track record continues to attract attention, creating a reinforced adoption cycle.
Source: Securitize
For example, in 2018, Securitize announced in official documents that it would build tools on Ethereum to manage the full lifecycle of digital securities. This initiative laid the groundwork for the eventual launch of BlackRock's BUIDL fund, which is currently the largest tokenized fund issued on Ethereum.
2.2. A Platform for Real Capital Flow
Another key reason for Ethereum's continued dominance in the RWA market is its ability to convert on-chain liquidity into real purchasing power. The tokenization of real-world assets is not just a technical process. A fully functional market requires capital that can actively invest in and trade these assets. In this regard, Ethereum is the only platform with deep and deployable on-chain liquidity.
Source: rwa.xyz, Arkham, Tiger Research
This is evident on platforms like Ondo, Spark, and Ethena, all of which hold significant amounts of tokenized BUIDL funds on Ethereum. These platforms have attracted hundreds of millions of dollars in funding by offering products based on tokenized U.S. Treasuries, stablecoin-based lending, and synthetic yield dollar tools.
Ondo Finance has accumulated over $600 million in total value locked (TVL) through its Treasury-backed products USDY and OUSG.
Spark Protocol has utilized DAI liquidity from MakerDAO to purchase over $2.4 billion in real-world Treasuries.
Ethena has established a bankless yield infrastructure on Ethereum using its synthetic stablecoins USDe and sUSDe, attracting institutional demand and DeFi liquidity.
These examples demonstrate that Ethereum is not just a platform for asset tokenization. It provides a robust liquidity foundation capable of facilitating real investment and asset management. In contrast, many emerging RWA platforms struggle to ensure capital inflow or secondary market activity after the initial token issuance phase.
The reasons for this disparity are clear. Ethereum has integrated stablecoins, DeFi protocols, and compliance-ready infrastructure. This creates a comprehensive financial environment where issuance, trading, and settlement can all occur on-chain.
Therefore, Ethereum is the most effective environment for converting tokenized assets into actual purchasing activities. This gives it a structural advantage that goes beyond simple market share.
2.3. Building Trust Through Decentralization
Decentralization plays a crucial role in building trust. The tokenization of real-world assets involves transferring ownership and transaction records of high-value assets into a digital system. In this process, institutions focus on the reliability and transparency of the system. This is where Ethereum's decentralized architecture offers significant advantages.
Ethereum operates as a public blockchain supported by thousands of independently running nodes worldwide. The network is open to anyone, and changes are determined by participant consensus rather than centralized control. As a result, it avoids single points of failure, ensures resilience against hacking and censorship, and maintains uninterrupted uptime.
In the RWA market, this structure creates tangible value. Transactions are recorded on an immutable ledger, reducing the risk of fraud. Smart contracts enable trustless transactions without intermediaries. Users can access services, execute protocols, and participate in financial activities without centralized approval.
These features—transparency, security, and accessibility—make Ethereum an attractive choice for institutions exploring asset tokenization. Its decentralized system meets the critical requirements for operating in high-risk financial environments.
3. Emerging Challengers Reshaping the Landscape
The Ethereum mainnet has proven the viability of tokenized finance. However, with success, it has also exposed structural limitations that hinder broader institutional adoption. Key obstacles include limited transaction throughput, latency issues, and unpredictable fee structures.
To address these challenges, Layer 2 Rollup solutions like Arbitrum, Optimism, and Polygon zkEVM have emerged. Major upgrades, including The Merge (2022), Dencun (2024), and the upcoming Pectra (2025), have brought improvements in scalability. Nevertheless, the network still fails to match traditional financial infrastructure. For instance, Visa processes over 65,000 transactions per second, a level Ethereum has yet to reach. For institutions requiring high-frequency trading or real-time settlement, these performance gaps remain a critical constraint.
Latency also poses challenges. The average block generation takes 12 seconds, and additional confirmations required for secure settlement can lead to finality times of up to three minutes. During network congestion, this delay can increase further—creating difficulties for time-sensitive financial operations.
More importantly, the volatility of gas fees remains a concerning issue. During peak times, transaction fees have exceeded $50, and even under normal circumstances, costs often rise above $20. This level of fee uncertainty complicates business planning and may undermine the competitiveness of Ethereum-based services.
Securitize illustrates this dynamic well. After encountering Ethereum's limitations, the company expanded to other platforms like Solana and Polygon while also developing its own chain, Converage. While Ethereum played a crucial role in facilitating early institutional experiments, it now faces increasing pressure to meet the demands of a more mature and performance-sensitive market.
3.1. The Rise of General-Purpose Blockchains with Fast and Efficient Costs
As the limitations of Ethereum become increasingly apparent, institutions are exploring alternative advantages in key performance bottlenecks such as transaction speed, fee stability, and finality time to complement Ethereum's general-purpose blockchain.
Source: rwa.xyz, Tiger Research
However, despite ongoing collaborations with institutional participants, the actual number of tokenized assets on these platforms (excluding stablecoins) remains significantly lower compared to Ethereum. In many cases, tokenized assets launched on general-purpose chains are still part of Ethereum's dominant multi-chain deployment strategy.
Even so, there are signs of substantial progress. In the private credit space, new tokenization initiatives are emerging. For example, on zkSync, the Tradable platform has gained attention, accounting for over 18% of activity in this field—second only to Ethereum.
At this stage, general-purpose blockchains are just beginning to establish a foothold. Platforms like Solana, which have experienced rapid growth in their DeFi ecosystems, now face a strategic question: how to translate this momentum into a sustainable position in the RWA space. Relying solely on superior technical performance is not enough. To compete with Ethereum, they need to provide infrastructure and services that meet institutional investors' trust and compliance expectations.
Ultimately, the success of these blockchains in the RWA market will depend less on raw throughput and more on their ability to deliver tangible value. The differentiated ecosystems built around each chain's unique advantages will determine their long-term positioning in this emerging field.
3.2. The Emergence of RWA-Specific Blockchains
An increasing number of blockchain platforms are abandoning general-purpose designs in favor of domain-specific specialization. This trend is also evident in the RWA space, where a wave of new specialized chains optimized for the tokenization of real-world assets is rising.
Source: Tiger Research
The rationale for RWA-specific blockchains is clear. The tokenization of real-world assets requires direct integration with existing financial regulations, making it insufficient to use general-purpose blockchain infrastructure in many cases. Specific technical requirements—especially around regulatory compliance—must be addressed from the ground up.
A key area is compliance processing. KYC and AML procedures are crucial for tokenization workflows, but these have traditionally been handled off-chain. This approach limits innovation, as it merely wraps traditional financial assets in a blockchain format without redesigning the underlying compliance logic.
The current shift is towards fully transferring these compliance functions on-chain. The demand for blockchain networks that can not only record ownership but also natively enforce regulatory requirements at the protocol level is growing.
In response, some RWA-focused chains have begun to offer on-chain compliance modules. For example, MANTRA includes decentralized identity (DID) features that support compliance execution at the infrastructure layer. Other specialized chains are expected to follow a similar path.
In addition to compliance, many of these platforms leverage deep domain expertise to target specific asset classes. Maple Finance focuses on institutional lending and asset management, Centrifuge specializes in trade finance, and Polymesh is dedicated to regulated securities. These chains do not aim to broadly tokenize widely held assets like sovereign bonds or stablecoins but instead adopt vertical specialization as a competitive strategy.
That said, many of these platforms are still in their early stages. Some have yet to launch their mainnets, and most remain limited in scale and adoption. If general-purpose chains are just beginning to gain attention in the RWA space, specialized chains are still at the starting line.
4. Who Will Lead the Next Phase?
Ethereum's dominance in the RWA market is unlikely to continue in its current form. Today, the market for tokenized assets is less than 2% of its estimated potential, indicating that the industry is still in its early stages. So far, Ethereum's advantage has primarily stemmed from its early product-market fit (PMF). However, as the market matures and scales, the competitive landscape is expected to undergo significant changes.
Signs of this shift are already evident. Institutions are no longer focused solely on Ethereum. Both general-purpose and RWA-specific blockchains are being evaluated, and an increasing number of services are exploring the deployment of custom chains. Tokenized assets initially issued on Ethereum are now expanding into multi-chain ecosystems, breaking the previous monopoly structure.
A key turning point will be the application of on-chain compliance. For blockchain-based finance to represent true innovation, regulatory processes like KYC and AML must be conducted directly on-chain. If specialized chains successfully provide scalable, protocol-level compliance and drive widespread industry adoption, the current market landscape could be significantly disrupted.
Equally important is the presence of actual purchasing power. Tokenized assets only become investable when there is active capital willing to acquire them. Regardless of technology, without meaningful liquidity, the utility of tokenization is limited. Therefore, the next generation of RWA platforms must cultivate a robust service ecosystem built on tokenized assets and ensure strong liquidity participation for users.
In short, the conditions for success are becoming increasingly clear. The next leading RWA platform is likely to be one that achieves the following three points:
A fully integrated on-chain compliance framework
A service ecosystem built on tokenized assets
Deep and sustainable liquidity to facilitate actual investments
The RWA market is still in its infancy. Ethereum has validated the concept. The current opportunity lies with those platforms that can provide superior solutions—those that meet institutional requirements while unlocking new value in the tokenized economy.
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