Why 89% of tokenized RWAs remain idle despite a $34.6 billion market: Falcon exec explains

The tokenized real-world asset market has reached $34.6 billion onchain, but only $3.79 billion has been deployed in protocols, leaving about 89% of issued value idle. Summary Roughly 11% of the $34.6 billion tokenized RWA market is deployed in protocols. BlackRock’s BUIDL, Franklin Templeton’s BENJI and Circle’s USYC all have utilization below 1%. JAAA and reUSD have utilization rates above 97%, according to DeFiLlama. Falcon Finance examines legal claims, redemptions, liquidity, pricing, and credit quality before accepting RWA collateral. DefiLlama data shows a sharp difference between the value of tokenized assets issued onchain and the amount being used inside decentralized finance protocols. BlackRock’s BUIDL has a utilization rate of 0.64%, while Franklin Templeton’s BENJI stands at 0% and Circle’s USYC at 0.52%, according to the platform. Each product gives holders exposure to yield-bearing assets, but little of their issued value has moved into the protocols covered by DefiLlama’s utilization measure. Products created for use as collateral show a different pattern. Centrifuge’s tokenized Janus Henderson Anemoy AAA CLO Fund, known as JAAA, has reached 97.97% utilization, while Re Protocol’s reUSD stands at 97.87% and Maple Finance’s SyrupUSDT at 88.84%. You might also like: Robinhood Chain RWA volume hits $390M as memecoin stock pairs surge Artem Tolkachev, chief RWA officer at Falcon Finance, told crypto.news that the gap cannot be understood from one utilization figure alone. In his view, analysts must first examine what the asset was created to do and then identify where holders are using it. “Low utilization is weak utility when a product was built and priced to be borrowed against and stays flat after launch,” Tolkachev said. “An underlying fund that is held for yield and redeems on time is doing its job at zero utilization.” Tokenized RWA utilization requires more than one measure Tolkachev separates utilization into two levels. At the asset level, he examines redemption speed, the party 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 an asset 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, he said, making protocol utilization an incomplete measure of total demand. Assets held by custodians or supplied as margin at derivatives venues may perform an economic function without appearing in DeFi utilization data. Money market funds, for example, are commonly purchased as cash-management products rather than assets that must circulate through lending pools. Wrappers designed specifically for DeFi require a different test, according to Tolkachev. If their main purpose is to support borrowing or other onchain activity, a low utilization rate after launch can point to weak adoption.