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Exploits, Liquidations, and What Lies Beneath the Surface

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Liquidations Crypto’s market cap declined by 6% over the past month. The main reason for this drop is the market’s low volatility, following Curve’s $62M exploit on July 30, until August 17. A combination of events could have influenced this sell-off, including a possible upcoming interest rate hike, the Ripple case getting longer, and rumors about SpaceX liquidating its Bitcoin holdings. Bitcoin and Ethereum fell by 6.62% and 8.19%, respectively, over the past month. The largest decentralized exchange by total value locked (TVL), Uniswap, suffered the most in August, declining by 29.05%. On the other hand, Curve’s TVL rebounded, growing by 19.78% over the past month, indicating that the 65.9% recovered funds remain on-chain.

Crypto’s market cap declined by 6% over the past month. The main reason for this drop is the market’s low volatility, following Curve’s $62M exploit on July 30, until August 17. A combination of events could have influenced this sell-off, including a possible upcoming interest rate hike, the Ripple case getting longer, and rumors about SpaceX liquidating its Bitcoin holdings. Bitcoin and Ethereum fell by 6.62% and 8.19%, respectively, over the past month. The largest decentralized exchange by total value locked (TVL), Uniswap, suffered the most in August, declining by 29.05%. On the other hand, Curve’s TVL rebounded, growing by 19.78% over the past month, indicating that the 65.9% recovered funds remain on-chain.

Figure 1: Price and TVL Development of Major Crypto Sectors in August

Source: 21shares, CoinGecko, DeFi Llama. Data as of August 30 close.

5 Trends to Remember from August

• Declining market activity, FUD, and macro backdrop fueling the largest liquidations since FTX

In late August, the crypto market experienced approximately $1.04 billion in liquidations, with around $833 million from long positions. Various factors fueled the chain of liquidations, notably the Fed’s minutes emphasizing ongoing inflation and the potential for more interest rate hikes. This, combined with elevated US long-term bond yields and a hawkish Fed stance, prompted short-term risk aversion that impacted both the crypto and stock markets. This relationship is highlighted by Bitcoin’s renewed positive correlation with S&P 500 and Nasdaq, reaching 0.8 and 0.72, respectively, and implying that the three markets are once again moving in tandem.

The downturn was also exacerbated by erroneous reports of SpaceX liquidating its Bitcoin holdings. While many speculated about a potential sell-off, it’s important to note that write-downs are a standard accounting practice and do not necessarily imply that the investments have been sold or liquidated. In addition, global markets experienced a mild shock due to news of Evergrande’s bankruptcy filing under US Chapter 15, raising concerns about its impact on the global real estate market.

Finally, the SEC’s ability to appeal specific judgments about the Ripple case added to the negative sentiment, which we will briefly touch on next. Although August’s events pale in comparison to the gravity of the FTX debacle, Bitcoin’s annualized volatility recently hit its lowest level in over five years, which indicated an anticipated market breakout. That said, the market modestly rebounded on the news of a Federal Appeals Court ruling siding with Grayscale in their case against the SEC on converting GBTC into a spot ETF.

Figure 2: Liquidations Across the Crypto Market

Source: Coinglass (on August 17)

• Ripple Continues Saving Grace by Forging New TradFi Partnerships

On August 18, the SEC filed an interlocutory appeal against the inconclusive summary order in the Ripple case issued by Federal Judge Analisa Torres on July 13. The appeal primarily objects to the court’s view that the programmatic sales of XRP (on exchanges) are not considered securities, highlighting a disagreement among district courts regarding the controlling issues. In response, XRP fell by around 30% over the past month. Ripple has until September 1 to submit a response to the SEC’s appeal. There are no definite dates for the trial yet; Judge Torres suggested that the court would be in session later in the second half of 2024. Until then, we expect XRP to experience speculation to drive its price movement while Ripple continues to secure strategic partnerships to enforce its value proposition as a crypto-native software solution for players in traditional finance. In its latest move, Ripple is collaborating with fintech giant MasterCard and ConSensys, among others, to build a central bank digital currency (CBDC) program to support central banks and governments in pursuing a digital currency. The program will explore the design of CBDCs, interoperability, and limitations.

• Did Tether’s Profit Surge Lure PayPal’s Venture into Stablecoins?

The issuer behind the biggest US-dollar stablecoin is now the 11th-largest holder of Bitcoin. Following their announced plans to convert profits into Bitcoin, Tether has amassed 55K BTC (~$1.6B). The latest attestation report shows a ~$800M rise in excess reserves in Q2, reaching $3.3B. This significant development enhances demand for Bitcoin’s role in corporate treasury management. Conversely, Tether should convert surplus BTC and profits into cash to fortify the company’s resilience against unforeseen issues. For context, Tether’s cash reserves dropped from $5.3B in December 2022 to $90M in Q2 23, a concern for an $85B stablecoin, despite access to liquid instruments like US treasuries, and REPOs. Finally, although not confirmed by Tether, the wallet holdings align with the issuer’s quarterly holdings. That said, Tether’s thriving business endeavor might have piqued the curiosity of traditional financial behemoths cautiously entering the stablecoin landscape.

Figure 3: Tether’s Potential BTC Holdings

Source: 21.co on Dune

On August 7, Paypal partnered with stablecoin issuer Paxos to launch their own USD-pegged stablecoin, PYUSD, built on Ethereum and fully backed by U.S. dollar deposits, short-term U.S. treasuries and similar cash equivalents. According to the press release, eligible U.S. customers will be able to pay for their purchases using PYUSD in the same manner that Gnosis Pay announced it will empower European customers to pay for their purchases with Monerium’s euro-pegged stablecoin (EURe) via its Visa card, with a convergence mechanism running in the backend. This trend aims to boost mass adoption by solving two ailing issues stifling the industry, by providing users with a familiar user interface while being compliant to regulations. Moreover, onboarding more traditional players from the second generation of the internet shows the institutional appetite for the stablecoin subsector, whose market cap is valued at $125B, with USDT dominating by 66%. More traditional players, especially those with existing tools to their advantage, will likely follow suit, aiming to topple this dominance in their favor. In the grand scheme of things, the more regulated players in the space, the healthier the market.

• Coinbase Scores Two Points for Adoption

After a year in application, Coinbase won regulatory approval to offer crypto futures to its retail clients in the U.S. According to a recent study, 58.8 million Americans hold crypto, up 18% from the previous year. This move can bring more American retail investors into crypto, thanks to regulations, an essential element for mass adoption. The trading volume of the global crypto derivatives market represents almost 75% of the entire crypto market. The Coinbase Derivatives Exchange has established a deep liquidity pool with $4.7B worth of BTC and $2B worth of ETH futures traded in notional volume in 2023. We’re also seeing more adoption on the infrastructure level, with Coinbase’s scaling solution Base launching on Ethereum on August 9, attracting $226.59M in assets under management.

• Visa’s Experimentations to Abstract the Complexity of Crypto

After Visa initially announced their experiment utilizing Account Abstraction (AA) to streamline crypto native payments on top of Ethereum back in May, the financial services giant revealed the piloted project’s latest updates. Namely, leveraging the ERC-4337 standard, more commonly known as AA, Visa abstracted the process of paying gas fees in ETH using a credit card. As AA allows for asset conversion in the backend, users will not have to worry about holding the right native token to pay for transaction costs. Thus, users would be met with the flexibility of paying with their cards or any other ETH-based token, and the AA smart contract will simply trigger the conversion via what’s known as a paymaster smart contract that sponsors transactions on users’ behalf. That said, Visa’s experiment has the power and potential to transform the crypto native ecosystem and make them more accessible using the average users’ traditional financial instruments, and could, thus, catalyze the adoption of native blockchain applications without users necessarily becoming aware of the technical intricacies.

Figure 4: Visa’s Process to Abstract ETH Gas Fees

Source: Visa

What to Expect

• OP Stack Establishing its Presence and EVM Maintaining Dominance

Optimism’s modular framework, OP Stack, is maintaining its position as the leading scaling solution for Ethereum, with established players like Binance, Coinbase, Worldcoin and A16Z all opting to leverage the solution to build their customized networks. Coinbase launched public access to its scaling solution dubbed Base in August, leveraging the OP Stack. The scaling solution Base experienced tremendous growth, amassing close to ~$275M in AuM around two months and generating $3.2M in revenue, of which Coinbase will share 2.5% of the total amount with the OP Stack to help develop the broader Optimism ecosystem, while welcoming the deployment of some of DeFi blue chips like Uniswap, Aave, 1Inch and others.

Figure 5: Coinbase Scaling Solution AuM

Source: 21.co on Dune

While the initial shift was prompted by a meme coin frenzy, the ongoing surge in user activity signifies enthusiasm for the Ethereum ecosystem. Moreover, Base holds significant growth potential due to Coinbase’s extensive 110M user base, which can seamlessly transition to the on-chain ecosystem through user-friendly interfaces. In line with this, Coinbase revealed “on-chain summer”, an initiative to introduce users to Base’s vibrant ecosystem and the network’s enhanced performance. The program was a success as Base logged close to 136K daily active users at peak, surpassing Optimism and Polygon. It remains to be seen whether Base can sustain its user base in the long run. However, it will certainly be a key network to look out for over the next few months.

Finally, the enthusiasm for the Ethereum ecosystem has also reverberated across the wider smart contract landscape. For instance, Fantom is considering building an optimistic-based rollup linking to Ethereum, while Celo proposed pivoting into an ETH scaling solution using the OPStack. Binance has similarly launched its own ETH scaling solution dubbed OpBNB, aligning its technical approach with Base. Conclusively, all three decisions stem from the desire to harness Ethereum’s network effects and its liquidity amidst the declining on-chain activity.

Figure 6: Daily Active Addresses of the Four Leading Ethereum Scaling Solutions

Source: Artemis.xyz

• Where Are Stablecoins Headed?

Coinbase is doubling down on the stablecoin space by taking an equity stake in Circle. While it may not immediately impact investors, as Circle will still be issuing USDC, the move speaks volumes of the level of consolidation the community has reached. The more competition heats up in this space, the tougher it will be for smaller stablecoins to shine, which – in theory – should filter out the ones with weak underlying technology or little added value. Contrarily, with a clear added value, PayPal’s new stablecoin will take some time to catch up with the rally, especially since 90% of the stablecoin’s supply is still in addresses that belong to its issuer, Paxos Trust.

More legal clarity on stablecoins in the U.S. is on the way, and it could be PayPal’s golden ticket to set sail. On August 28, representatives from the Financial Services Committee sent a letter to Federal Reserve Board Chairman Jerome Powell objecting to the Fed’s recent “Creation of Novel Activities Supervision Program,” published a day after PayPal’s PYUSD launch. The supervisory guidelines aim at monitoring stablecoin activities engaged by banks under the Fed’s jurisdiction. In the letter, the Committee wrote that the Fed’s move undermines Congress’ progress on legislation to establish a regulatory framework for payment stablecoins. We believe the Committee’s letter indicates a political will to reach legal clarity, just like the Fed’s move was a strong indicator that stablecoins will inevitably soar in mass adoption.

• The Debut of Friend.tech and the broader Social-Fi movement

Friend.tech, a novel social app launched on Base network, letting users tokenize and trade Twitter account shares. Share prices scale with availability; more shares mean higher prices with a 10% tax split—5% for the protocol and 5% for the Influencer, while shareholders access private chats, exclusive content and deepen social ties with their influencers.

Despite early glitches, Friend.tech’s arrival is noteworthy. It employs Base’s Account Abstraction tech for a smooth on-chain user experience, letting users join with web2 credentials, deposit without a wallet setup, and trade shares fee-free. A web app model also evades Apple/Google limits, facilitating mobile deployment. Finally, Friend.tech integrates finance into social networking, reshaping the relationship to offer both financial and social gains and reflecting what is known as Social Finance (SocialFi).

Impressively, Friend.tech surpasses rivals like Lens protocol, achieving significant visibility in the social vertical. In 10 days, it traded ~$60M worth of shares, with up to $3M in daily fees, exceeding smart-contract platforms in peak hype. Remarkably, at the depth of the bear market, the application drew nearly 127K users, although some were possibly driven by the prospect of an airdrop while being amongst the rare crypto apps capturing the attention of external figures. High-profile personalities like NBA player Grayson Allen, CEO of Y Combinator Garry Tan, and even gaming influencers like FaZe Banks all joined the platform.

Figure 7: Total Trading Volume & # of Traders on Friend.tech

Source: @21co on Dune

In summary, Friend.tech could bring untapped web2 innovations into SocialFi, aligning with web3’s empowerment goals by converging social relationships with financial opportunities. However, pricing and wallet privacy need to be enhanced for trust. Vulnerabilities like linking wallets to Twitter emphasize the exigency for robust privacy safeguards within SocialFi applications to protect the technology’s integrity. Regulatory risks could also arise driven by expectations of user profits and revenue sharing. That said, Friend.tech’s is still worth monitoring as a blueprint for future crypto apps in terms of abstracting crypto’s complexity.

Bookmarks

• Exploits, Liquidations, and What Lies Beneath the Surface.

• Our researcher Tom Wan shared his insights in Blockworks’ webinar: Next-Level Web3 Data Strategies to Ride the Latest Trends.

• We published a dashboard tracking the post-mortem of the Curve exploit; check it out here.

• Have you heard of re-staking your staked ETH? EigenLayer is a new staking primitive that enables the reusing of staked ETH. We built a dashboard to track its progress and adoption. Check it out here.

Next Month’s Calendar

These are the top events we’re closely monitoring in September.

• September 20-22: Messari Annual Event

• September 30: Optimism Token Unlock (3.37%)

Source: 21shares, Forex Factory, CoinMarketCap

Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

Disclaimer

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.

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Nya multi-Asset ETFer från Amundi med ökande exponering mot obligationer över tid

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Sedan i tisdags handlas fyra nya multi-Asset ETFer från Amundi med ökande exponering mot obligationer över tid på Xetra och Börse Frankfurt.

Sedan i tisdags handlas fyra nya multi-Asset ETFer från Amundi med ökande exponering mot obligationer över tid på Xetra och Börse Frankfurt.

Amundi Lifecycle UCITS ETF-serien spårar FTSE Lifecycle ESG Screened Select-indexfamiljen. Dess mål är att spåra resultatet för ett diversifierat värdepappersuniversum med flera tillgångar. Den justerar viktningen av varje tillgångsklass över tid baserat på en glidbana genom att minska aktieexponeringen och öka exponeringen mot räntebärande intäkter fram till måldatumet. Investerare kan välja mellan 2030, 2033, 2036 och 2039 för måldatum.

Investeringsuniversumet består av de globala aktierna i FTSE Developed ESG Screened Select Index samt följande euro-denominerade obligationsindex i FTSE-indexfamiljen, som spårar både stats- och företagsobligationer: FTSE Euro Broad Investment-Grade ESG Screened Select Corporate Index, FTSE EMU Government Bond Select Index, FTSE EMU Government Bond Select Index, FTSE-indexet för statsobligationer Välj EMU Green-0 Government Bonds Green-0 Government Bonds. Index.

Dessutom tar indexen hänsyn till ESG-kriterier för att minska exponeringen mot företag vars produkter har en negativ social eller miljömässig påverkan. De tillämpar också ett klassens bästa synsätt för att fokusera på företagen med bäst ESG-betyg inom en bransch. De enskilda fonderna investerar även i gröna obligationer emitterade av EMU-länderna. Detta tjänar till att främja hållbara projekt, särskilt inom områdena vatteninfrastruktur, avfallshantering och förnybar energi.

Från indexmåldatumet investerar indexet gradvis i FTSE EMU Government Bond 0-1 Years Select Index. Detta index mäter utvecklingen för eurodenominerade ränteobligationer med investeringsgrad med en löptid på mindre än ett år.

Fonderna kan likvideras inom tre år från målindexdatum, med förbehåll för förhandsmeddelande till aktieägarna.

Dessa är ackumulerande andelsklasser, det vill säga utdelningen återinvesteras.

NamnKortnamnISINAvgiftUtdelnings-
policy
Referens-
index
Amundi Lifecycle 2030 UCITS ETF AccLC30LU28722919480,18 %AckumulerandeFTSE Lifecycle 2030 ESG Screened Select Index
Amundi Lifecycle 2033 UCITS ETF AccLC33LU28722920860,18 %AckumulerandeFTSE Lifecycle 2033 ESG Screened Select Index
Amundi Lifecycle 2036 UCITS ETF AccLC36LU28722921690,18 %AckumulerandeFTSE Lifecycle 2036 ESG Screened Select Index
Amundi Lifecycle 2039 UCITS ETF AccLC39LU28722922430,18 %AckumulerandeFTSE Lifecycle 2039 ESG Screened Select Index

Produktutbudet i Deutsche Börses XTF-segment omfattar för närvarande totalt 2 351 ETFer. Med detta urval och en genomsnittlig månatlig handelsvolym på cirka 18 miljarder euro är Xetra den ledande handelsplatsen för ETFer i Europa.

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BS7A ETF investerar i dollarnominerade företagsobligationer som förfaller 2027

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Invesco BulletShares 2027 USD Corporate Bond UCITS ETF Acc (BS7A ETF) med ISIN IE0001XIQ4D9, försöker följa Bloomberg 2027 Maturity USD Corporate Bond Screened index. Bloomberg 2027 Maturity USD Corporate Bond Screened-index spårar företagsobligationer denominerade i amerikanska dollar. Indexet speglar inte ett konstant löptidsintervall (som är fallet med de flesta andra obligationsindex). Istället ingår endast obligationer som förfaller under det angivna året (här: 2027) i indexet. Indexet består av ESG (environmental, social and governance) screenade företagsobligationer. Betyg: Investment Grade. Löptid: december 2027 (Denna ETF kommer att stängas efteråt).

Invesco BulletShares 2027 USD Corporate Bond UCITS ETF Acc (BS7A ETF) med ISIN IE0001XIQ4D9, försöker följa Bloomberg 2027 Maturity USD Corporate Bond Screened index. Bloomberg 2027 Maturity USD Corporate Bond Screened-index spårar företagsobligationer denominerade i amerikanska dollar. Indexet speglar inte ett konstant löptidsintervall (som är fallet med de flesta andra obligationsindex). Istället ingår endast obligationer som förfaller under det angivna året (här: 2027) i indexet. Indexet består av ESG (environmental, social and governance) screenade företagsobligationer. Betyg: Investment Grade. Löptid: december 2027 (Denna ETF kommer att stängas efteråt).

Den börshandlade fondens TER (total cost ratio) uppgår till 0,10%. Invesco BulletShares 2027 USD Corporate Bond UCITS ETF Acc är den billigaste och största ETF som följer Bloomberg 2027 Maturity USD Corporate Bond Screened index. ETFen replikerar det underliggande indexets prestanda genom samplingsteknik (köper ett urval av de mest relevanta indexbeståndsdelarna). Ränteintäkterna (kupongerna) ackumuleras och återinvesteras.

Invesco BulletShares 2027 USD Corporate Bond UCITS ETF Acc är en mycket liten ETF med tillgångar på 6 miljoner euro under förvaltning. ETF lanserades den 21 maj 2024 och har sin hemvist i Irland.

Invesco BulletShares 2027 USD Corporate Bond UCITS ETF Acc syftar till att ge den totala avkastningen för Bloomberg 2027 Maturity USD Corporate Bond Screened Index (”Referensindexet”), minus avgifternas inverkan. Fonden har en fast löptid och kommer att upphöra på Förfallodagen.

Referensindexet är utformat för att återspegla utvecklingen för USD-denominerade, investeringsklassade, fast ränta, skattepliktiga skuldförbindelser utgivna av företagsemittenter. Den är marknadsvärdevägd med ett tak på 4,5 % för enskilda företagsemittenter. För att vara kvalificerade för inkludering måste företagsvärdepapper ha minst 300 miljoner USD i nominellt utestående belopp och en effektiv löptid på eller mellan 1 januari 2027 och 31 december 2027.

Värdepapper är uteslutna om emittenter: 1) är inblandade i kontroversiella vapen, handeldvapen, militära kontrakt, oljesand, termiskt kol eller tobak; 2) inte har en kontroversnivå enligt definitionen av Sustainalytics eller har en Sustainalytics-kontroversnivå högre än 4; 3) anses inte följa principerna i FN:s Global Compact; eller 4) kommer från tillväxtmarknader.

Portföljförvaltarna strävar efter att uppnå fondens mål genom att tillämpa en urvalsstrategi, som inkluderar användning av kvantitativ analys, för att välja en andel av värdepapperen från referensindexet som representerar hela indexets egenskaper, med hjälp av faktorer som index- vägd genomsnittlig löptid, branschsektorer och kreditkvalitet. När en företagsobligation som innehas av fonden når förfall, kommer kontanterna som fonden tar emot att användas för att investera i kortfristiga USD-denominerade skulder utgivna av det amerikanska finansdepartementet.

ETFen förvaltas passivt.

En investering i denna fond är ett förvärv av andelar i en passivt förvaltad indexföljande fond snarare än i de underliggande tillgångarna som ägs av fonden.

Förfallodag”: andra onsdagen i december 2027 eller annat datum som bestäms av styrelseledamöterna och meddelas aktieägarna.

Handla BS7A ETF

Invesco BulletShares 2027 USD Corporate Bond UCITS ETF Acc (BS7A ETF) är en börshandlad fond (ETF) som handlas på London Stock Exchange.

London Stock Exchange är en marknad som få svenska banker och nätmäklare erbjuder access till, men DEGIRO gör det.

Börsnoteringar

BörsValutaKortnamn
London Stock ExchangeGBXBS7X
London Stock ExchangeUSDBS7A

Största innehav

NamnCUSIPISINKupongräntaVikt%
Amazon.com Inc 3.15% 22/08/27023135BC9US023135BC963,1501,36%
Verizon Communications Inc 4.125% 16/03/2792343VDY7US92343VDY744,1250,98%
Citigroup Inc 4.45% 29/09/27172967KA8US172967KA874,4500,97%
Goldman Sachs Group Inc/The 3.85% 26/01/2738141GWB6US38141GWB663,8500,97%
Microsoft Corp 3.3% 06/02/27594918BY9US594918BY933,3000,97%
Toronto-Dominion Bank/The 4.108% 08/06/2789115A2C5US89115A2C544,1080,96%
T-Mobile USA Inc 3.75% 15/04/2787264ABD6US87264ABD633,7500,96%
Toyota Motor Credit Corp 3.05% 22/03/2789236TJZ9US89236TJZ933,0500,95%
Warnermedia Holdings Inc 3.755% 15/03/2755903VBA0US55903VBA083,7550,95%
Apple Inc 2.9% 12/09/27037833DB3US037833DB332,9000,94%

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Tokenization Is Bringing Wall Street On-Chain

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Blockchain-based tokenization is transforming asset ownership and investment by enabling fractional access to luxury real estate, seamless trading of commodities like gold, and participation in private equity markets with the simplicity of digital transactions. As 2025 emerges as a watershed year for the industry, this sector is rapidly accelerating due to technological breakthroughs, regulatory advancements, and institutional adoption. This innovation is redefining ownership models and financial participation—converting traditionally illiquid assets into liquid investments while democratizing access to high-value markets.

Blockchain-based tokenization is transforming asset ownership and investment by enabling fractional access to luxury real estate, seamless trading of commodities like gold, and participation in private equity markets with the simplicity of digital transactions. As 2025 emerges as a watershed year for the industry, this sector is rapidly accelerating due to technological breakthroughs, regulatory advancements, and institutional adoption. This innovation is redefining ownership models and financial participation—converting traditionally illiquid assets into liquid investments while democratizing access to high-value markets.

With projections suggesting a $5T tokenized asset market by 2030, key industry players are rolling out groundbreaking platform upgrades and strategic initiatives, underscoring tokenization’s transformative role in global finance. Thus, we thought now is an opportune time to delve into how this innovation is reshaping financial markets and opening unprecedented opportunities for individuals and institutions alike, positioning tokenization as a cornerstone of modern economic infrastructure.

Before we delve into what the landscape looks like, let’s briefly give a breakdown of some of the benefits of tokenization for businesses and end-investors alike.

For Businesses

Cost Savings & Operational Efficiency

• Blockchain eliminates intermediaries, reduces costs, and speeds up transaction settlement.

• Real-time settlements could save financial institutions $20B annually by avoiding traditional T+2 delays, according to research from McKinsey.

• HSBC achieved:

o 90% cheaper bond issuance.

o 40% lower fundraising expenses compared to traditional methods.

• Citi’s Integrated Digital Assets Platform (CIDAP) with Maersk:

o Streamlined trade finance from days to minutes using tokenized smart contracts while reducing administrative burdens.

Enhanced Liquidity & Market Reach

• Tokenization enables fractional ownership, unlocking capital in illiquid assets such as private equity and real estate.

• Tokenized shares led to significantly faster fundraising and broader investor reach.

• $250T in marketable securities could be used as collateral, but only $28.6T is utilized.

• Distributed ledger technology in collateral management could unlock $100B+ annually, boosting liquidity and accessibility.

Improved Transparency & Streamlined Compliance

• Tokenization can significantly cut compliance costs, with the financial sector spending $181B annually.

o Reduces expenses by up to 50% through programmable rules and streamlined audits, dropping times by 30% and proving tokenization’s efficiency.

o They can automate otherwise manual work, for example, digitized identity verification lowers onboarding costs by 30-50% while maintaining privacy.

o Blockchain audit trails & automated screening reduce money laundering risks by 26%, while standardized workflows & verifiable credentials cut cross-border AML checks by 60%.

For End-Investors

• Tokenization benefits end investors by:

o Enhancing security and user experience.

o Increasing access to investment opportunities by lowering entry barriers.

o Providing greater liquidity, cost savings, and improved transparency.
• Key advantages include:

o 24/7 trading and near-instant transaction settlements, completing transactions in minutes versus the traditional T+2 cycle.

o Automation of yield opportunities across diverse assets via blockchain programmability, reducing manual intervention and overhead.

• Facilitates secondary markets for private credit and real estate:

o Shortens lock-up periods, and enables faster exit opportunities.

For the Underlying Blockchain

• Tokenization drives mainstream blockchain adoption and expands financial market utility, while amplifying its network effects.

• By converting real-world assets into digital tokens, blockchains gain access to trillions of dollars in previously illiquid or fragmented capital.

• Tokenization leverages blockchain’s strengths: transparency, security, and decentralization.

o Reduces intermediaries, streamlines transactions, and enables fractional ownership.

o Attracts institutions and governments, modernizing infrastructure and improving capital mobility.

• Tokenized assets create hubs for diverse financial instruments and foster seamless integration with decentralized finance (DeFi).

• Helps onboard mature assets into the crypto ecosystem.

• Drives the development of robust regulatory frameworks to address fraud and compliance concerns.

• Expected to evolve into the foundational settlement layer for global economies, which is projected to drive $291B in network revenues by 2030.

Why are we talking about this now?

Since our last Tokenization Report in October 2023, the total tokenized market has nearly doubled in value, growing from $8.8B to $17.2B.

Figure 1: Total Market Value of Tokenized Real-World Assets

Source: RWA.xyz

Meanwhile, the number of Real-World Asset (RWA) holders has increased by more than 100%, growing from almost 35K to 72K users. In fact, since the inception of this industry, more than 70M users have interacted with and at least used once with a tokenized product.

Figure 2: Adoption of Tokenized Real-World Assets: New and Cumulative Users

Source: 21Shares, Dune

With this perspective in mind, the sector’s growth has been primarily driven by tokenized government securities and private equities. Protocols catering to these segments continue to dominate market share, as illustrated in Figure 3 below.

Figure 3: Breakdown of Tokenized Real World Assets by Type

Source: 21Shares, RWA.xyz

The global financial sector is witnessing accelerated adoption of tokenization, with major institutions migrating traditional funds onto blockchains and established players developing supporting infrastructure. This shift spans asset management, banking services, and regulatory frameworks, reflecting broader industry transformation. This includes:

Institutional Tokenization Initiatives

• Asset managers like BlackRock, Hamilton Lane, Franklin Templeton, and WisdomTree now offer blockchain-based versions of conventional investment vehicles.

• Singapore’s Monetary Authority (MAS) spearheads Project Guardian, testing 15+ tokenization use cases across bonds, asset management, and treasury operations.

Banking Infrastructure Expansion

• HSBC deployed its Orion platform for tokenized deposits and gold transactions.

• UBS introduced its “UBS Services” for tokenizing bonds, funds, and structured products.

• DBS introduced its comprehensive “Token Services”, which features programmable rewards, treasury tokens and conditional payment solutions.

• Settlement giants Euroclear and DTCC have partnered to develop tokenized asset management frameworks, including but not limited to collaborations with crypto service providers like Chainlink.

Further, the United States is adopting a more favorable stance towards crypto, which is particularly significant for tokenization, as the country leads in the on-chain deployment of tokenized funds across treasuries and institutional investments, with a 61% market share. For example, President Trump recently signed the Executive Order ”Strengthening American Leadership in Digital Financial Technology,” which promotes the responsible growth of digital assets, blockchain technology, and related innovations across various sectors. This initiative also established the Working Group on Digital Asset Markets to develop a comprehensive federal regulatory framework for the industry, including tokenization. Additionally, the SEC has begun relaxing rules for banks to provide crypto custody services, paving the way for greater institutional participation in tokenized markets. With these developments, 2025 is poised to be a pivotal year for tokenization, with expectations that its influence begins extending beyond finance into sectors such as energy, intellectual property rights, commodities, and real estate.

Without delay, let’s analyze the top-performing sector: Government Securities.

The sector experienced remarkable growth over the past two years, driven by the high interest rate environment. Assets under management surged from approximately $700M to $3.5B, marking a 400% increase. Meanwhile, the user base expanded from around 700 to 13,000 unique holders, representing a staggering 1,757% growth, as shown in Figure 4 below.

Figure 4: Total Number of Tokenized Treasury Holders

Source: RWA.xyz

Across this vertical, Ethereum retained its dominance, bolstered by its deep liquidity and unmatched network security, which have made it the preferred choice for institutions to launch their initiatives before potentially exploring alternative networks. This reinforces our thesis that Ethereum will remain the de-facto platform for institutional adoption, even as emerging networks like Solana and Aptos gain traction and pose increasingly stiff competition.

Figure 5: Breakdown of Tokenized Government Securities by Blockchain

Source: 21Shares, RWA.xyz

In terms of projects, Franklin Templeton’s BENJI product dominated the market. However, Ondo has since established itself as one of the leading protocols, thanks to its diverse suite of offerings that have solidified its position in the industry, as seen below.

Figure 6: Breakdown of Tokenized Government Securities by Project

Source: 21Shares, RWA.xyz

Looking ahead, we expect Ondo to dominate a much bigger market share, building on the latest announcements and upgrades they unveiled at their new annual summit in New York. Specifically, they revealed two products:

OndoChain: A hybrid blockchain that blends permissioned security with public accessibility, ensuring compliance, security, and open access to tokenized markets. Advised by industry leaders such as BlackRock, PayPal, Morgan Stanley, Franklin Templeton, WisdomTree, and McKinsey, it leverages expertise from top financial and technology institutions, with key features including:

• Permissioned Validators: Validators are run by financial institutions and carefully monitored to prevent unfair practices and protect investors, such as front-running, ensuring compliance. Validators also provide real-time, reliable data like asset prices and interest rates onchain, improving transparency and efficiency while reducing the risk of manipulation.

Staking with RWAs: Tokenized RWAs, like U.S. debt securities (USDY), will secure the network. Validators must stake external assets, similar to how broker-dealers post high-quality collateral in traditional finance, ensuring compliance and alignment. RWAs can also be used in DeFi activities like borrowing, lending, and staking while maintaining traditional mechanics. Institutions can pay transaction fees in RWAs, offering predictable costs and easing adoption for regulated players.

• Omnichain Bridging: The network enables smooth transfers between Ondo Chain and various blockchains (e.g., Ethereum, Solana, Cosmos). A decentralized verifier system ensures secure cross-chain RWA operations without relying on intermediaries or escrow contracts. This consolidates liquidity on Ondo Chain, avoiding fragmentation, which is crucial as it addresses the problem of RWAs issued across multiple chains. This can be seen in Ondo’s TVL being scattered across several networks, as depicted in Figure 7.

Figure 7: Breakdown of Ondo’s Total Value Locked by Blockchain

Source: 21Shares, DeFiLlama

Ondo Global Markets (GM): A global investment platform that tokenizes U.S. stocks, ETFs, and mutual funds to eliminate traditional market fragmentation and high fees—leveraging stablecoin-inspired efficiency. It enables 24/7 cross-border trading outside the U.S. while ensuring regulatory compliance. The platform’s key features include:

• Vast Range of Tokenized Real-World Assets: Provides 1:1-backed tokens representing U.S. securities like Apple, Tesla, S&P 500, and mutual funds among others. These tokens will be freely transferable on secondary markets outside the U.S., similar to stablecoins.

• Instant Minting and Redemption: Investors can convert securities into tokens (and vice versa) instantly, mirroring the liquidity of the underlying assets.

• DeFi Integration and Composability: Tokenized assets can be used as collateral for loans, staking, or yield generation in DeFi protocols, enabling cross-collateralization with crypto assets and expanding the universe of assets within DeFi.

• Institutional-Grade Infrastructure: Integrated compliance features, including AML controls and proof-of-reserves verification, enable regulatory compliance while providing token holders access to institutional securities lending markets, with full yield distribution.

• Built-In Access to Margin: Borrow against tokenized holdings at competitive rates typically accessible only to traditional institutional investors.

All in all, while Ondo’s upgrade presents significant growth potential, three key risks warrant attention. First, its novel reliance on RWAs for network security remains unproven at scale, exposing vulnerabilities to value fluctuations from market volatility or interest rate changes. Second, the permissioned validator system introduces centralization risks. If Ondo’s proprietary oracle faces attacks or manipulation attempts, its entire ecosystem could collapse without third-party safeguards like using external validators such as Chainlink’s Oracle Network. Finally, despite addressing liquidity fragmentation through its omnichain architecture, the effectiveness of Ondo Bridge and its Decentralized Verification Network in mitigating this risk remains speculative until real-world implementation. These challenges demand cautious optimism as the platform begins to roll out.

Private Credit

While government securities dominated in 2023 and 2024 with explosive growth, another sector was quietly gaining momentum in the background — now emerging as the largest real-world asset category after stablecoins. That said, as highlighted in our 2025 Market Outlook, private credit remains one of the industries primed for further disruption this year. To recap, tokenizing this sector enables:

• Secondary Market Activation: Tokenization enables 24/7 trading of private credit positions and equity, reducing the 180–360-day settlement cycles typical in traditional markets. For example, Victory Park Capital tokenized $1.7B in private credit on zkSync, allowing instant fractional trading of SME loans previously locked for 5–7 years while democratizing exit strategies via token sales instead of a full portfolio exit.

• Fractional Ownership: By breaking private credit investments into smaller tokens, investors can trade portions of their holdings, improving liquidity. In fact, the Coalition Greenwich survey found that 70% of investors cited liquidity as a barrier to investing in private credit.

• Streamlining Operational Workflows: By automating manual processes like compliance checks, capital calls, and loan servicing, administrative burdens are minimized. Bain & Company estimates that tokenization could unlock $400B in value for alternative investments through automation, while Deloitte demonstrates that digitizing workflows via tokenization reduces operating costs for asset managers overseeing private credit funds.

• Enhancing transparency: Tokenization tackles private credit’s longstanding transparency challenges by leveraging blockchain’s real-time auditability. While 43% of investors avoided private credit in 2023 due to opacity concerns, distributed ledger technology now enables granular tracking of loan terms, collateral status, and payment flows via public blockchain records.

• Collateral Optimization: Smart contracts enable cross-chain collateralization (e.g., using tokenized real estate as margin for private loans), reducing liquidity premiums by around 30% compared to conventional escrow arrangements

All in all, tokenized private credit markets are expanding rapidly, with protocols like Tradable, Maple, and Figure Network driving adoption, as seen below.

Figure 8: Total amount of Active Loans on Private Credit Markets

Source: RWA.xyz

Zooming in, tokenized private credit surged 66% over 18 months to reach its current $11.8B valuation. The Figure Network dominates onchain private credit with $8.8B in active home equity loans, representing 92% of the market. Meanwhile, Tradable has emerged as a major player, tokenizing $1.7B in alternative assets like private credit funds, while as shown below, Maple Finance tripled its TVL to over $550M, shown in Figure 9, in the last six months through institutional debt pools offering yields above 18%.

Figure 9: Total Value Locked on Maple

Source: 21Shares, Dune

Higher investment returns will be a major catalyst for this sector’s growing adoption, as users embrace greater risk in pursuit of credit yields—currently averaging more than twice the return on U.S. Treasuries, which are expected to decline further in the coming months.

To recap, government securities and private credit currently lead in tokenized asset growth, driven by institutional adoption and regulatory advancements. Initiatives like Ondo’s new developments are expected to accelerate this trend, alongside a favorable macro environment attracting further capital inflows. While government securities and private credit dominate today, real estate and private equity are poised to gain momentum as the industry matures. With a projected $5T tokenized asset market by 2030, the sector is primed for continued expansion, reshaping finance, streamlining operations unlocking unprecedented opportunities across several asset classes, all on–chain. As adoption grows, tokenization not only democratizes high-value markets but also solidifies blockchain’s role as a cornerstone of global financial infrastructure.

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Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

Disclaimer

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.

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