Written by: Chi Anh, Ryan Yoon, Tiger Research
Compiled by: AididiaoJP, Foresight News
Summary
Thanks to first-mover advantage, past institutional cases, deep on-chain liquidity, and decentralized architecture, Ethereum remains in a leading position in the RWA market.
Faster transaction speeds and lower-cost L1 blockchains, along with RWA-specific chains designed for compliance, are addressing Ethereum's limitations in cost and performance. These emerging platforms position themselves as next-generation RWA infrastructure by providing excellent technical scalability or built-in compliance features.
The key growth for the next phase of RWA will depend on three factors: on-chain regulatory compatibility, a service ecosystem built around real-world assets, and sufficient on-chain liquidity.
In what ways is the RWA market currently developing?
Tokenization of real-world assets (RWA) has become one of the mainstream trends in the blockchain industry. Global consulting firms such as Boston Consulting Group (BCG) have published extensive market forecasts, and Tiger Research has found that the industry is increasingly growing in emerging markets like Indonesia.
So, what exactly are RWAs? They refer to the conversion of tangible assets (such as real estate, bonds, and commodities) into digital tokens. The tokenization process is inevitably reliant on blockchain infrastructure. Currently, Ethereum occupies a leading position in the infrastructure supporting such tokenization.
Sources: rwa.xyz, Tiger Research
Despite increasing competition, Ethereum still maintains its dominant position in the RWA market. Some RWA blockchains have already emerged, and platforms like Solana, which have established a foothold in the DeFi space, are also expanding into the RWA domain. Even so, Ethereum still accounts for over 50% of market activity, highlighting its solid market position.
This report examines the key factors behind Ethereum's current dominance in the RWA market and explores the critical elements that may influence the next phase of growth and competition.
Why does Ethereum remain in the lead?
2.1. First-Mover Advantage and Institutional Trust
The reasons for Ethereum becoming the default platform for institutional tokenization are clear. It was the first to establish key tokenization smart contract standards and has 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 competitive platforms emerged. This early foundation provided the necessary technical and regulatory basis for institutions to attempt RWA projects.
Many institutions prioritize evaluating Ethereum before considering alternatives. Some key initiatives by large financial firms or institutions have helped establish Ethereum as a critical infrastructure in the RWA market:
JPMorgan's Quorum and JPM Coin (2016-2017): To support enterprise use cases, JPMorgan developed the permissioned fork of Ethereum, Quorum, while JPM Coin can be used for interbank transfers. This indicates that Ethereum's architecture can meet regulatory requirements in terms of data protection and compliance, even in private form.
Société Générale Bond Issuance (2019): Société Générale's FORGE issued €100 million in covered bonds on the Ethereum public mainnet. This indicates that regulated securities can be issued and settled on a public blockchain while minimizing the involvement of intermediaries.
European Investment Bank Digital Bond (2021): The European Investment Bank, in collaboration with Goldman Sachs, Santander Bank, and Société Générale, issued a digital bond worth €100 million on Ethereum. This bond was settled using a central bank digital currency (CBDC) issued by a French bank, highlighting Ethereum's potential in fully integrated capital markets.
These successful pilot cases have enhanced Ethereum's credibility. For institutions, trust is built on verified use cases and recommendations from other regulated participants. Ethereum continues to attract interest and forms a self-reinforcing adoption loop.
Source: Securitize
For instance, 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 BlackRock's eventual launch of BUIDL (currently the largest tokenized fund issued on Ethereum).
2.2. Blockchains with Continuous Inflows of Traditional Capital
Another key reason for Ethereum's continued dominance in the RWA market is its ability to convert on-chain liquidity into actual purchasing power.
Tokenizing real-world assets is not just a technical process. A properly functioning market requires capital that can actively invest in and trade these assets. In this regard, Ethereum stands out as the only platform with deep and deployable on-chain liquidity.
Sources: rwa.xyz, Arkham, Tiger Research
This is particularly evident on platforms like Ondo, Spark, and Ethena, which hold significant amounts of tokenized BUIDL funds on Ethereum. These platforms have attracted hundreds of millions of dollars by offering products based on tokenized U.S. Treasuries, stablecoin lending, and synthetic yield-generating dollar tools.
Ondo Finance has locked up over $600 million in TVL through its Treasury-backed products USDY and OUSG.
Spark Protocol leveraged MakerDAO's DAI liquidity to purchase over $2.4 billion in Treasuries.
Ethena built a non-bank yield infrastructure on Ethereum using its synthetic stablecoin USDe and sUSDe, attracting institutional demand and DeFi liquidity.
These examples illustrate that Ethereum is not just a platform for asset tokenization. It provides a robust liquidity foundation that supports investment and asset management for large institutions or financial firms. In contrast, many emerging risk asset management platforms struggle to ensure sustained capital inflow or maintain active secondary market activity after the initial token issuance.
The reasons for this differentiation are clear. Ethereum has integrated stablecoins, DeFi protocols, and compliance infrastructure, creating a comprehensive financial environment that ensures issuance, trading, and settlement can all take place on-chain.
Thus, Ethereum is the most efficient environment for converting tokenized assets into actual purchasing activities, which has become a structural advantage for Ethereum.
2.3. Building a Trust Foundation through Decentralization
Decentralization plays a crucial role in building trust. Tokenizing real-world assets requires transferring ownership and transaction records of high-value assets onto the chain. In this process, institutions focus on the system's reliability and transparency. This is where Ethereum's decentralized architecture offers a unique advantage.
Ethereum is a public chain supported by thousands of independently operated nodes worldwide. The network is open to everyone, and all changes are determined by participant consensus rather than centralized control. Therefore, it can avoid single points of failure, resist hacking and censorship, and maintain uninterrupted normal operation.
In the RWA market, this structure creates tangible value. Transactions are recorded on an immutable ledger, thus reducing the risk of fraud. Smart contracts enable trustless transactions without intermediaries. Users can access services, enter agreements, and participate in financial activities without centralized approval.
Features such as transparency, security, and accessibility make Ethereum the ideal choice for institutions exploring asset tokenization. Its decentralized system meets the key requirements for operating in a high-risk financial environment.
Emerging challengers are reshaping the landscape
Ethereum has made tokenized finance feasible. However, it has also exposed some structural limitations that hinder broader institutional adoption. These barriers mainly include limited transaction throughput, latency issues, and unpredictable fee structures.
To address these challenges, Layer 2 Rollup solutions such as Arbitrum, Optimism, and Polygon zkEVM have emerged. Major upgrades, including the Merge (2022), Dencun (2024), and the already launched Pectra (2025), have improved Ethereum's scalability. However, the network still cannot surpass traditional financial infrastructure. For example, Visa processes over 65,000 transactions per second, whereas Ethereum has yet to reach this level. For institutions requiring high-frequency trading or real-time settlement, these performance gaps remain a critical limiting factor.
Delays and final confirmations also pose challenges. Block generation takes an average of 12 seconds, and with the additional confirmations needed for secure settlement, final confirmations can often take up to three minutes. In cases of network congestion, delays may increase further, posing challenges for time-sensitive financial operations.
More importantly, the volatility of gas fees is concerning. During peak times, transaction fees exceed $50, and even under normal circumstances, fees often exceed $20. This fee uncertainty complicates business planning and may undermine the competitiveness of Ethereum-based services.
Securitize is a case in point. After encountering the limitations of Ethereum, the company expanded to other platforms such as Solana and Polygon while also developing its own blockchain, Converage. Although Ethereum played a crucial role in early institutional experiments, it now faces increasing pressure to meet the demands of a more mature, performance-sensitive market.
3.1. High-Throughput and Cost-Effective General Blockchains are Emerging
As the limitations of Ethereum become increasingly apparent, more and more institutions are exploring general blockchains that can serve as alternatives to Ethereum. These platforms can address Ethereum's key performance bottlenecks, particularly in terms of transaction speed, fee stability, and finality time.
Sources: rwa.xyz, Tiger Research
Despite ongoing collaborations with institutional investors, the actual scale of tokenized assets (excluding stablecoins) on these platforms remains far below Ethereum. In many cases, tokenized assets launched on general chains are still part of a multi-chain deployment strategy dominated by Ethereum.
Even so, there are signs that emerging platforms are making meaningful progress. In the private credit sector, new tokenization schemes are emerging. For instance, on zkSync, the Tradable platform has gained attention, commanding over 18% of the activity share in the field, second only to Ethereum.
At this stage, general blockchains are just beginning to find their footing. Platforms like Solana, whose DeFi ecosystem has experienced rapid growth, now face a strategic question: how to translate this momentum into a sustainable position in the RWA space. Merely possessing excellent technical performance is not enough. Solana needs to meet the trust and compliance expectations of institutional investors.
Ultimately, the success of these blockchains in the RWA market will depend not on raw throughput but more on their ability to deliver tangible value. Differentiated ecosystems built around the unique advantages of each chain 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 designs in favor of focusing on specific domains. This trend is also evident in the RWA space, where a new wave of RWA-specific chains is emerging, optimized for the tokenization of real-world assets.
Sources: Tiger Research
The concept of RWA-specific blockchains is clear. Tokenizing real-world assets requires direct alignment with existing financial regulations, which makes the use of general blockchain infrastructure inadequate in many cases. RWA-specific blockchains need to fundamentally address specific technical requirements, particularly in terms of regulatory compliance.
Compliance processing is a critical area. KYC and AML procedures are essential for tokenization workflows, but these procedures are often handled off-chain. This approach simply wraps traditional financial assets in a blockchain format without redesigning the underlying compliance logic.
The current shift is about being able to fully bring these compliance functions on-chain. The demand for blockchain networks is growing, not only to record ownership but also to natively execute regulatory requirements at the protocol level.
Some blockchains focused on RWA have started to offer on-chain compliance modules. For example, MANTRA includes decentralized identity (DID) functionality, supporting compliance execution at the infrastructure layer. Other RWA-specific blockchains are expected to take similar actions.
In addition to compliance, many platforms target specific asset classes and position themselves with deep domain expertise. Maple Finance focuses on institutional lending and asset management, Centrifuge specializes in trade finance, and Polymesh is dedicated to regulated securities. These blockchains have not tokenized widely-held assets like sovereign bonds or stablecoins but have adopted vertical specialization as a competitive strategy.
Nevertheless, many platforms are still in the early stages. Some platforms have yet to launch their mainnet, and most still have limited scale and adoption. If general chains are just starting to gain attention in the RWA field, specialized chains are still at the starting line.
Who will replace Ethereum in the RWA market?
Ethereum's dominance in the RWA market is unlikely to remain unchanged. The current market size for tokenized assets is less than 2% of its expected size, indicating that the industry is still in its early stages. Ethereum's advantage so far largely stems from its early product-market fit (PMF). As the market matures and scales, the competitive landscape will undergo significant changes.
Signs of this shift are already evident, as institutions are no longer focused solely on Ethereum. Other general blockchains and RWA-specific blockchains are undergoing market testing, with an increasing number of services exploring custom chain deployments. Tokenized assets initially issued on Ethereum are now expanding into multi-chain ecosystems, breaking the previous monopolistic landscape.
A critical turning point will be the realization of on-chain compliance. For blockchain finance to truly embody innovation, regulatory processes such as KYC and AML must be conducted directly on-chain. If specialized chains can successfully provide scalable protocol-level compliance and drive industry-wide adoption, the current market landscape may be thoroughly disrupted.
Equally important is actual purchasing power. Tokenized assets only have investment value when there is active capital willing to buy them. Regardless of the technology used, the utility of tokenization is limited without effective liquidity. Therefore, the next generation of RWA platforms must build a robust service ecosystem based on tokenized assets and ensure that users have ample liquidity to participate.
In short, the next leading RWA platform is likely to achieve the following three goals simultaneously:
Fully integrated on-chain compliance framework
Service ecosystem built around tokenized assets
Deep and sustainable liquidity ensures genuine purchasing power
The RWA market is still in its infancy, and platforms that can provide superior solutions will replace Ethereum to dominate: platforms that meet institutional needs while unlocking new value in the tokenized economy.
