The tokenized real-world asset market has grown into a 34.6 billion USD onchain industry — but only 3.79 billion USD of that value, roughly 11 percent, has actually been deployed inside decentralized finance protocols. The remaining 89 percent of issued value sits idle, and according to one of the industry’s top underwriters, the gap says less about failure than the raw number suggests.
Data from DeFiLlama shows a sharp split between tokenized assets that were issued onchain and those being actively used in DeFi. BlackRock’s BUIDL money market fund has a utilization rate of just 0.64 percent. Franklin Templeton’s BENJI stands at 0 percent, and Circle’s USYC at 0.52 percent. Each product gives holders exposure to yield-bearing assets, yet almost none of their issued value has moved into the protocols covered by DeFiLlama’s utilization measure.
Products built specifically to serve as collateral tell a very different story. Centrifuge’s tokenized Janus Henderson Anemoy AAA CLO Fund, known as JAAA, has reached 97.97 percent utilization. Re Protocol’s reUSD stands at 97.87 percent, and Maple Finance’s SyrupUSDT at 88.84 percent.
One number is not enough
Artem Tolkachev, chief RWA officer at Falcon Finance, argues the gap cannot be understood from a single utilization figure. Analysts need to ask first what an asset was created to do, and only then examine where holders are actually using it.
“Low utilization is weak utility when a product was built and priced to be borrowed against and stays flat after launch,” Tolkachev told crypto.news. “An underlying fund that is held for yield and redeems on time is doing its job at zero utilization.”
Tolkachev separates utilization into two levels. At the asset level, he examines redemption speed, who is responsible for honoring redemptions, the stability of the yield, and the losses holders could face after a default. At the use level, he looks at whether the token is being held for yield, posted as collateral at a centralized exchange, or supplied to a DeFi protocol. Each route carries different terms and risks, which makes protocol utilization an incomplete measure of real demand.
Money market funds are a case in point. They are commonly purchased as cash-management products rather than assets meant to circulate through lending pools. Assets held by custodians or posted as margin at derivatives venues perform an economic function without ever appearing in DeFi utilization data. Wrappers designed specifically for DeFi, however, face a stricter test: if their purpose is to support onchain borrowing, a low utilization rate after launch signals weak adoption.
The pricing problem
The gap also has a structural cause. An August report found that Stellar’s tokenized RWA market had grown from roughly 785 million USD in January to more than 3 billion USD by July — while RWA-enabled pools on its Blend lending protocol held barely 2 million USD. RedStone attributed part of the mismatch to the difficulty of pricing traditional assets around the clock. US Treasuries, money market funds and corporate credit do not produce continuous prices the way bitcoin or ether do, leaving lending protocols to manage stale valuations whenever traditional markets are closed.
Five tests before collateral status
Before Falcon accepts assets such as JAAA, the JTRSY Treasury fund or tokenized Mexican CETES bills, it runs a five-part review focused on two outcomes: how quickly seized collateral can be turned into cash, and how much value could be recovered under stressed conditions.
The first test covers the token holder’s legal claim — whether the token provides a perfected claim on assets in a bankruptcy-remote structure or merely an unsecured promise from the issuer. The second examines redemption terms: some tokenized funds redeem directly into a stablecoin onchain, while others depend on the issuer’s own timetable. “We read the documents, not the deck,” Tolkachev said. “A collateral asset you cannot exit in stress is not collateral.”
The third test looks at secondary-market liquidity, the fourth at the resilience of the price feed when the underlying market is closed, and the fifth at credit quality — ratings, duration, issuer exposure and portfolio concentration. “If any one of those five legs fails, it does not become collateral, however attractive the yield,” he added.
Closed markets, bigger haircuts
DeFi loans run around the clock, but the securities behind many RWA tokens trade only during limited hours. A borrower can approach a liquidation threshold overnight or on a weekend, leaving the protocol holding collateral it cannot immediately sell. Falcon responds with larger haircuts for assets with long market closures, liquidation thresholds that buffer trading blackouts, and pricing logic that discounts stale valuations rather than trusting thin off-hours trades. Borrowing capacity is sized to what could be liquidated during the asset’s most difficult window — not its face value.
Few DeFi protocols accept structured credit or sovereign debt as collateral at all, because the underwriting demands legal, credit and operational expertise that most lending platforms, built for liquid crypto tokens, never developed. That concentration is itself a signal: the 89 percent idle figure is partly a supply problem — not enough protocols able to absorb the collateral — as much as a demand one.
Price snapshot at the time of writing (CoinGecko cached data): BTC 79,803 USD, ETH 2,479.72 USD, SOL 103.35 USD.
BUIDL at 0.64 percent utilization after all that fanfare. The idle number is the real story, roughly 30 billion parked onchain doing absolutely nothing
makes sense tho. BUIDL holders are institutions parking treasury cash, they were never gonna loop it into some lending protocol for extra yield
JAAA at 97.97 percent and BENJI at literally zero. Utilization just tracks whether the thing was built as DeFi collateral or tokenized marketing
BUIDL at 0.64 percent utilization after all that launch hype. BlackRock issued it, everyone bought the narrative, nobody actually uses it in DeFi
Tolkachev has a point though. If the fund redeems on time and pays yield, utilization is the wrong metric. BENJI sitting at 0 percent is not the same as BENJI failing
fair point but then why tokenize at all. the whole pitch was onchain collateral loops. if it redeems like a money market fund, buy the money market fund and skip the gas
settlement speed for institutions was always the actual pitch, not defi loops. but yeah the retail marketing oversold the onchain collateral angle hard
settlement in a regular money market fund is T+1 and onchain gas right now is basically nothing. the token is a rails upgrade, not a yield product. different pitch entirely from the defi loop fantasy
Rails upgrade is the correct frame. The yield is identical either way, the difference is whether a trading desk can post it at 2am on a sunday. That is the entire product.
the answer to hanne is you tokenize because the margin venue accepts the token as collateral and wont accept your fidelity sweep. JAAA at 97 percent is literally this
89 percent idle sounds scary until you remember most of it is treasuries funds doing treasuries fund things. the headline writes itself tho
saw three versions of the 30 billion parked headline this morning. none of them mention Centrifuge built Anemoy as actual collateral from day one and it shows in the numbers
JAAA at 97.97 percent vs BUIDL at 0.64 tells you everything. assets built as collateral get used, assets built as yield parking spots just sit there
yep and centrifuge spent like two years getting JAAA plumbed into actual margin venues before anyone cared. utilization followed the plumbing, not the narrative
the 11 percent deployed number will age weird. took syrup years to crack 80+, give the 34.6b a cycle
worth remembering tolkachev is the RWA chief at falcon, an underwriter whose whole book needs the collateral story to win. framework is fine, messenger is holding bags
everyone dunking on BUIDLs 0.64 percent but blackrock never needed it in defi, the token was a client retention feature for funds that wanted to say they were onchain
BUIDL at 0.64% utilization while blackrock celebrates issuing billions onchain. favorite stat of the year tbh
counterpoint, a lot of that paper is being used as collateral on derivatives venues offchain. idle onchain doesnt mean unused
counterpoint to the counterpoint, if that offchain collateral use were real someone would show receipts by now. tolkachev had months to
Issuance without deployment is a database with extra steps. 34.6 billion issued and barely anything circulates in DeFi, that gap is the whole story.
JAAA at 97.97% while BENJI sits at literal zero tells you everything. build collateral products or build press releases, pick one