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Until the early 2020s, crypto markets operated as a closed economy. Coins were created, traded and settled on-chain, with their value derived mainly from speculation. Their worth wasn’t based on real-world assets. In recent years, however, real-world assets (RWA) have begun to tokenize financial instruments and commodities. In doing so, these protocols bring off-chain assets onto blockchains and into the world of decentralized finance (DeFi).
Growth in RWAs accelerated after 2023, when institutional players such as BlackRock and Franklin Templeton started issuing them. This drew attention to what had formerly been a niche segment. This guide describes what RWAs are, how they generate yield and which projects define the field in 2026.
Key Takeaways:
RWAs are on-chain tokens that represent ownership of physical or financial assets — such as stocks, government bonds and commodities like gold — backed by real-world holdings that are held off-chain.
They generate yield through lending, borrowing, trading and liquidity provision, with returns tied to real-world cash flows rather than token rewards or protocol subsidies.
Institutional entry since 2024 has driven rapid sector growth, bringing liquidity and regulatory credibility to on-chain RWA markets.