One line kept surfacing at TOKEN2049 in Singapore this week: without RWA, DeFi is heading nowhere.
Superstate founder Jim Hiltner was cited as the one who said it. He described it as a spicy take. Still, across several public discussions, the point was treated less like a provocation and more like a serious question about what DeFi can become if it wants to reach a much larger financial market.
Why some speakers said DeFi is running into a ceiling
The basic criticism was straightforward. DeFi total value locked has largely moved with the price of crypto-native assets. TVL, in that view, behaves like a shadow of token prices rather than a measure of how much demand there is for the financial services themselves.
Yield was presented as the same problem in another form. Yannick, Bitwise’s head of blockchain special projects, said in the Oct. 6 interview 「Institutional DeFi on Solana」 that ordinary DeFi is dead to some extent because the rates are gone. He said Bitwise has been focused on bringing real rates onchain and underwriting different assets.
For years, much of onchain yield came from leverage demand in crypto. In bull markets, traders borrowed to lever up and rates rose with that demand. Once markets cooled and traditional risk-free rates stayed high, deposits had a reason to move back into traditional finance.
That comparison came up directly on Oct. 7 during the TOKEN2049 panel 「DeFi: The Race to Power Global Finance」. The moderator opened with a simple challenge: if the 10-year U.S. Treasury is yielding 5.3%, is safe, and sits in a massive market, why would DeFi keep deposits when onchain yields in a bear market look similar to the return on the world’s safest asset?
Cheryl Chan, director of strategic expansion at Kamino, answered bluntly. If someone wants the same 5% as Treasurys without taking obvious risk, that is not going to happen. Her answer was not higher yield. It was broader asset access. Once many kinds of assets exist onchain, she argued, onchain finance itself becomes a form of diversification, and products that once required a private bank or a U.S. broker become reachable for ordinary users. Her emphasis was on access and diversification.
That only works if there are assets worth allocating to onchain. Several speakers said that has long been the missing piece. The founder of Phoenix, a perpetuals product on Solana, recalled entering DeFi in 2020 and 2021 and seeing financial experiments everywhere, but only three or four assets that could be taken seriously. Everything else was assumed to go to zero, and many experiments ended badly. In his view, higher-quality assets are now appearing onchain, which makes it worth rerunning some of those experiments.
Spencer Applebaum of Multicoin Capital made a similar point from another angle during the VC roundtable 「The Great Rebuild」. Lending, spot and perpetuals as DeFi primitives have been usable for a long time, he said, but crypto assets are highly volatile, have no duration, no cash flow, and protocol users are fully anonymous. The efficiency gains available on top of that asset base have largely already been extracted.
Put differently, DeFi built only on crypto-native assets appears to have a visible ceiling.
New activity is already coming from real-world assets
Speakers at TOKEN2049 pointed to data that suggests the shift is already underway.
In a discussion featuring Hyperliquid founder Jeff, the moderator cited a set of numbers: BTC and ETH were down 30% to 40% from a year earlier, yet the platform’s monthly trading volume was roughly unchanged. The reason, he said, was a change in market mix. Third-party HIP-3 markets, mainly perpetuals tied to real-world assets, had grown to 30% to 50% of total volume and reached 51% in July. Trading crude oil on weekends and trading perpetuals tied to private companies would have sounded conceptual a year ago.
Jeff said the move of HIP-3 from idea to reality may be the most important development to look back on this year. At that share of volume, he said, users are clearly willing to leave familiar financial products and try new ones.
Solana was presented as another example. According to rwa.xyz data cited in the discussions, RWA value on Solana stood at about $4.37 billion as of Oct. 6, while the number of holder addresses doubled over 30 days. Across the broader market, tokenized stock holders had surpassed 4.28 million.
The asset menu is also widening. Speakers referenced U.S. Treasurys, money market funds, private credit, reinsurance, and a royalty fund that a Swiss private asset manager announced onchain this week, with underlying exposure tied to music, life sciences and the energy transition.
Because these assets have low correlation with crypto markets, they were described as filling a gap DeFi has struggled with for years.
RWA onchain without DeFi is still incomplete
The argument ran both ways. RWA matters to DeFi, but several speakers said RWA also needs DeFi.
Adam Bilko, who manages RockawayX’s flagship market-neutral fund, said during the SCF panel 「Tokenized. Now What?」 that many issuers treat tokenization as a legal wrapper and assume buyers will show up once an asset is onchain. That is not what happens in practice. In his words, pre-qualification is only the first step. The real work starts after that.
On another panel, Pendle’s TN Lee put it even more plainly: if tokenized assets just sit there and are never used, their value is limited.
Snapshot data from RWA Markets on Sept. 29 was used to illustrate the point. Tokenized stocks had about $2.27 billion in measurable circulating float, but only about 9.9% had actually been deployed into DeFi. Tokenized funds had issued $12.4 billion, yet only $728 million was being used as collateral.
Most RWA, in other words, has made it onchain and then stayed idle in wallets.
Speakers also stressed that not every RWA is suitable for DeFi. U.S. Treasurys may be the safest asset, but using them for recursive borrowing onchain would require someone willing to lend below the Treasury rate, which does not make economic sense. Assets with highly unstable returns are also difficult because a drop in net asset value can trigger liquidations, and liquidators may not be there when needed.
The assets that fit DeFi best, according to the discussions, are those with stable returns and limited access for ordinary investors in traditional channels.
That is where tokenization can change the structure rather than simply duplicate an existing product. Moomoo was cited as holding a similar view. Based on its client research, putting another version of a stock onchain is mostly a copy of an existing business. The real change comes from removing the separation that exists inside traditional brokerage accounts, where stocks are isolated, cannot easily settle against other assets, and are not straightforward to finance against. Onchain, that separation can be opened up.
Three obstacles still stand between DeFi and RWA
If DeFi needs RWA and RWA needs DeFi, why have the two not fully connected yet? Across the week’s events, three issues came up most often.
Liquidity
RWA usually cannot be redeemed instantly after a sale. Settlement often runs on T+1 or T+2, and private credit can take longer. If the asset itself does not move with enough liquidity, lending markets will be reluctant to accept it as collateral.
Rate structure
Institutional borrowers want predictable funding costs, which means fixed rates and fixed terms. Speakers broadly agreed on that direction, but said fixed-rate markets still lack the capacity and depth needed.
How institutions will enter
Many market participants have been waiting for Wall Street to bring deposits into DeFi. One view repeated on stage was that this is the wrong expectation. Wall Street is more likely to enter as a borrower, issuer or manager, not as a depositor, and it will want permissioned systems, KYC and legally enforceable arrangements.
The operational gap is still basic in some cases. Many large pension funds and insurers do not even have wallets yet.
Different panels, same answer
Two questions kept returning across TOKEN2049 and Solana Capital Forum: what will keep deposits onchain, and after tokenization, who will actually use these assets?
The speakers came from different corners of the market — tokenized funds, onchain index products, rate protocols and market-neutral strategies — but their answers pointed in the same direction. RWA is not an optional add-on for DeFi. It is becoming a required part of the next phase. The stage in which DeFi mainly serves crypto assets is nearing its end.
What matters next, based on those discussions, is not just TVL or headline yield. The focus is shifting to which real-world assets can be accepted as collateral, whether fixed-rate markets can gain real depth, and whether institutions can connect in the way they are used to operating. On the RWA side, the race in issuance may be close to mature. The next contest is not who issues more, but whose assets are actually used.
The metrics highlighted as worth watching were also specific: the share of tokenized stocks deployed into DeFi, the scale of RWA used as collateral, and the growth rate of onchain RWA holder addresses.
The article’s cited views were compiled from public discussions at TOKEN2049 and Solana Capital Forum. They do not represent the positions of the speakers’ institutions or the platform, and they are not investment advice.