A report jointly released by CoinShares and Token Terminal on Aug. 6 shows a widening split in on-chain finance. In Q2 2026, total DeFi deposits fell about 15% year over year, while deposits linked to real-world assets, or RWA, climbed from $2.33 billion to $7.44 billion, up more than 200%. During the same period, total DEX spot trading volume dropped about 70%, while RWA spot volume rose roughly 220%.
The report’s core takeaway is straightforward: the shrinking part of DeFi is mostly crypto-native, while the growth is coming almost entirely from traditional financial assets moving on-chain, including U.S. Treasuries, money market funds, private credit, gold, crude oil and equity index futures.
DeFi contracted as RWA expanded
DeFi total value locked kept falling through 2026. It started the year at about $115 billion and slid to an intra-year low of $69.4 billion in early June, a decline that at one point approached 40%.
By ecosystem, Ethereum’s DeFi base was down 43%, Arbitrum fell 55%, and Plasma dropped nearly 75%.
The report ties the decline to several factors. BTC entered a down cycle after setting an all-time high above $122,000 in October 2025, pulling the broader crypto market into deleveraging. Lower yields unwound arbitrage loops and recursive lending structures. At the same time, 2026 had already seen 121 hacks with total losses of about $942 million. After Kelp DAO lost $293 million in an exploit on April 18, Aave users withdrew about $15 billion in deposits within four days.
Against that backdrop, RWA deposits moved the other way. The report says the main building blocks were tokenized Treasury funds, yield-bearing stablecoins, multi-strategy funds and private credit.
BlackRock’s BUIDL is cited as the leading tokenized Treasury product. Its assets under management had reached about $2.87 billion by mid-July, making it the largest single tokenized Treasury vehicle. In yield-bearing stablecoins, Sky Protocol’s sUSDS led the category in Q2.
What these assets share is built-in yield. They can be used as on-chain collateral or borrowed against while still generating interest at the underlying layer, so investors do not have to give up yield in order to access liquidity.
Lending protocols are taking in more RWA collateral
Aave, Morpho and Kamino are among the lending protocols increasingly accepting RWA as collateral. Users can borrow stablecoins against tokenized Treasuries instead of relying only on ETH or BTC. The report contrasts the two directly: crypto collateral can swing 30%, while tokenized Treasuries show almost no volatility.
For lending protocols, that means lower liquidation risk. For borrowers, it means better capital efficiency. Ethereum now accounts for nearly 70% of RWA lending collateral, according to the report.
CoinShares said both lenders and borrowers still prefer deeper liquidity pools, and Ethereum remains unmatched when large trades and institutional-sized flows are involved. Solana has been growing faster in spot trading, while Hyperliquid has stood out in derivatives.
By mid-2026, total on-chain RWA value excluding stablecoins had reached about $37.89 billion, with nearly 789,000 holder addresses. Tokenized U.S. Treasuries grew from under $1 billion at the start of 2025 to more than $15 billion, and BlackRock held about 40% of that segment.
RWA perpetuals became a major trading segment
If deposit data shows assets moving on-chain, the derivatives data shows trading moving on-chain.
RWA perpetual contracts went from an almost nonexistent niche to one of the main engines of on-chain trading in less than six months. Quarterly trading volume jumped from $12.37 billion in Q4 2025 to $202.7 billion in Q2 2026, roughly a 16-fold increase. Data cited from DWF Ventures at the end of July showed that RWA perpetuals at one point made up 37% of total perpetual volume across the market.
TradeXYZ on Hyperliquid was identified as the largest player in the segment, with cumulative trading volume of $350.7 billion, far above Binance’s $42.1 billion. Open interest in Hyperliquid’s RWA perpetuals hit a record $2.65 billion in May, doubling within two months.
Most of the activity was concentrated in commodities, which accounted for 70% to 95% of trading. Equity perpetuals, though, rose 121% month over month in May, with the S&P 500, Nasdaq 100 and technology stocks ranking among the fastest-growing contracts.
The report uses that shift to make a broader point: a decentralized exchange built on crypto-native infrastructure is now seeing close to half of its volume tied to crude oil, gold, the S&P 500 index and Nvidia stock rather than cryptocurrencies. In that framing, Hyperliquid is no longer just a DeFi protocol. It is becoming a 24/7 marketplace for global financial assets.
The source of growth has changed
Circle co-founder Jeremy Allaire said after seeing the figures that the crypto market is moving from “speculation on endogenous digital commodities” toward external assets.
CoinShares argues that on-chain finance is still growing, but the composition of that growth has changed. The boom in 2021 was driven by token incentives and liquidity mining loops: protocols issued tokens, users deposited assets to earn those tokens, token prices rose, and more capital followed. The report describes the 2026 decline in DeFi TVL as an extension of that model breaking down once the market cooled.
The growth pattern in 2026 is different. BlackRock is putting U.S. Treasuries on Ethereum because on-chain settlement is faster, cheaper and available around the clock. Institutional investors are using tokenized Treasuries as collateral on Aave because they can pair 4.5% Treasury yield with on-chain liquidity. Traders are using crude oil perpetuals on Hyperliquid because if a geopolitical event breaks on a Sunday night, traditional markets are closed and on-chain markets are not.
CoinShares CEO Jean-Marie Mognetti summed up the firm’s view in the report: when an asset class grows during a downturn in its host ecosystem, the demand is being driven by financial utility rather than by the market cycle.
On that reading, RWA adoption is not tied to a crypto bull market, token incentives or speculative momentum. It is tied to gains in settlement efficiency, 24/7 liquidity and capital efficiency.
Regulation and institutional moves are shaping the next phase
The report also puts current tokenization into perspective. Global equities are worth more than $100 trillion, while only about $2.2 billion of that value is currently tokenized on-chain, implying a penetration rate of 0.002%. CoinShares compares this stage to stablecoins in 2019: the concept has been validated, infrastructure is being built out, and mass adoption still takes time.
Regulation is part of the picture. The GENIUS Act was signed into law in July 2025, giving stablecoins a federal regulatory framework. The Office of the Comptroller of the Currency has also granted national trust bank charters to companies including Circle and Paxos.
CoinShares said that added clarity is starting to unlock institutional capital that had been waiting on the sidelines. In May, BlackRock filed with the U.S. Securities and Exchange Commission for two new tokenized funds, along with on-chain shares of a $7 billion money market fund. The asset manager, which oversees more than $10 trillion, is moving tokenization from an experimental effort toward a product line.
The report adds one more benchmark. RWA deposits in DeFi totaled $7.44 billion, while total on-chain RWA value stood at $37.89 billion, which means DeFi has so far absorbed only about 20% of real assets already on-chain. CoinShares estimates that around $2.5 billion of RWA is currently deployed in DeFi lending. Against a tokenized asset base of more than $30 billion, the report sees room for a 12x expansion if technical and regulatory barriers continue to ease.
Its closing argument is that the growth story in on-chain finance is being rewritten. The previous cycle sold the idea that DeFi would replace banks. The current data points somewhere else: banks are not being replaced, but their assets are starting to use blockchains as a settlement layer.