After Tokenization

Issuance Came First

RWAs solved issuance. They haven't solved trading.

Putting an asset onchain is now routine. Building a functioning market around it remains much harder.

A token can represent a Treasury fund, a share, a loan, or a bar of gold and still be difficult to trade or short. It may be unusable as collateral and dependent on one issuer for liquidity. Tokenization changes the container. Price discovery, hedge inventory, leverage, and a reliable exit still have to be built around it.

Only a narrow group of RWAs has that supporting infrastructure today. Derivatives need credible pricing and redemption, clear legal claims, and arbitrage capital. The first RWA wave created assets faster than it created those conditions.

The Issuance Wave

Early security-token projects focused on compliant issuance and ownership records. PAX Gold made physical gold transferable, while Franklin Templeton's BENJI brought a registered money-market fund onto public blockchains. Once interest rates rose, tokenized Treasuries found a clearer use: investors could hold an onchain dollar asset while retaining traditional-market yield.

PaxosMoni Score4145Website

Across tracked tokenized RWAs, market capitalization rose from $5.42 billion at the start of 2025 to $19.32 billion by the end of Q1 2026. Tokenized Treasuries alone crossed $10 billion in February 2026, according to CoinGecko's 2026 RWA report. Those balances say little about whether buyers and sellers can trade size continuously.

RWA.xyz's market-value methodology makes this distinction explicit. An asset may be recorded onchain while remaining non-transferable outside the issuer's platform. Distribution does not establish executable depth either. NAV, AUM, transfer volume, and order-book liquidity measure different things.

RWA.xyzMoni Score5303Website

What market size misses

BlackRock's BUIDL shows the limit of headline metrics. At the start of Q3 2026, its RWA.xyz asset page reported roughly $2.86 billion in value. The product is clearly large. The figure does not reveal how much can trade at a quoted spread, what an exit costs, or how much inventory market makers can recycle.

BUIDL uses an institutional subscription and redemption process, which makes public token transfers an incomplete liquidity proxy. Its onchain balance proves that issuance and distribution can scale. The breadth and continuity of secondary trading require different evidence.

The constraints differ elsewhere. Some tokens transfer around the clock but only among whitelisted wallets. Others work as collateral in one isolated market, track a stock without conveying shareholder rights, or exist on several chains with liquidity trapped in separate silos.

Tokenization still improves settlement and distribution and can enable self-custody. A trading layer requires more: the asset must support borrowing, hedging, routing across venues, and margin.

Consider a non-U.S. investor who buys a tokenized S&P 500 ETF position and uses it in an isolated Morpho market to borrow USDC. The token provides exposure and financing as long as the issuer, lending market, available liquidity, and access rules all support the transaction. A failure in any one of them can leave the investor holding an asset with no practical financing route.

Derivatives need a usable underlying

Derivatives are often treated as the natural step after spot. In practice, durable markets have formed around a trusted reference price, a standardized or credibly cash-settled underlying, and natural demand on both sides of the trade.

Agricultural futures became useful after exchanges standardized grades, delivery terms, and storage conventions. The Chicago Board of Trade's early contracts let farmers, merchants, and buyers transfer price risk around a legible physical market. CME's history dates standardized futures contracts to 1865.

Equity-index and foreign-exchange derivatives developed around comparable demand. An asset manager can hedge a portfolio with an index future instead of selling hundreds of shares. An importer can lock an exchange rate with a forward rather than carry the currency exposure. In the 2025 BIS survey, spot accounted for a minority of global FX turnover. Forwards, swaps, and options made up the larger risk-transfer market (BIS).

Leverage cannot supply those anchors. When the underlying barely trades, redemption is uncertain, and small orders move the benchmark, derivatives magnify the weakness through basis dislocations, higher margin requirements, and forced liquidations.

Credible derivatives generally follow a usable spot market. Listing leverage alone does not create one.

Tokenized Treasuries, gold, major equity indices, and large public stocks already have established offchain benchmarks and hedge markets. That makes them plausible candidates for an onchain trading layer. A bespoke private-credit token with infrequent NAV updates and no reliable secondary exit starts from a much weaker base.

Why perpetual futures are emerging first

Crypto already has a default instrument for turning price exposure into a continuously traded market: the perpetual future.

Perps put leverage and short exposure into a cash-settled contract with no expiry date. Funding payments keep the contract near a reference index; mark prices and margin rules determine liquidations. The format spread quickly after BitMEX launched its XBTUSD perpetual swap in 2016 and eventually displaced dated futures across much of crypto trading.

BitMEX BlogPerpetual XBTUSD Leveraged Swap Launch - BitMEXBitMEX announces world's first perpetual XBTUSD leveraged swap. Trade BTC/USD with up to 100x leverage, no expiry. Learn how it works.https://www.bitmex.com/blog/announcing-the-launch-of-the-perpetual-xbtusd-leveraged-swap

The design grew out of a spot market that never closes. Cash markets for stocks and other real-world assets operate on fixed sessions.

Suppose a trader opens a 10x stock-perp position. During U.S. market hours, the venue can reference live stock prices and market makers can hedge in the cash market. After the closing bell, the derivative keeps trading while the primary venue stops producing new prices. If unexpected news hits on Saturday, the perp order book may move sharply, but market makers cannot immediately hedge with the underlying stock. The venue must then rely on its own order book, hold the last external price, use a tokenized-stock reference, or constrain internal price discovery.

Each choice changes where the risk sits. Nasdaq liquidity is still unavailable until the cash market reopens.

Funding and liquidations can continue while the external benchmark is stale. In a thin synthetic market, trades move the mark price, which can trigger liquidations and move it again. The gap between the synthetic price and the underlying is exposed when the cash market reopens.

Oracle design can limit this risk. Pyth's integration guidance treats stale-price handling as a core requirement, and U.S. equity feeds still follow traditional sessions. Lower leverage, wider spreads, price bounds, confidence intervals, and reopen protections determine how the product behaves under stress.

Pyth NetworkMoni Score10871Website

Perps are likely to become the first large RWA derivative because crypto users already understand them and venues can list synthetic exposure without transferring the underlying asset. That growth may remain separate from demand for the tokenized asset itself.

Why the timing is better now

Several pieces of the supporting infrastructure matured between 2024 and 2026, making this cycle different from earlier security-token experiments.

Stablecoins became a large settlement base, and tokenized Treasury funds began to function as collateral. A November 2025 BIS bulletin described tokenized money-market funds as a fast-growing collateral asset while flagging allowlists and liquidity-mismatch risks. Transfer agents, custodians, oracles, and tokenization platforms now cover more of the asset lifecycle. The legal categories are becoming clearer as well. The SEC's January 2026 staff statement separates issuer-sponsored securities from custodial entitlements and synthetic linked products instead of treating every tokenized stock alike.

Traditional market infrastructure is moving too. DTCC assembled a working group of more than 50 firms and announced limited production activity targeted for July 2026, followed by a broader planned launch in October. The design supports controlled movement between approved blockchain environments and lifecycle functions beyond issuance.

Much of this activity remains gated, pilot-stage, or limited to wholesale users. The remaining work lies in moving settlement, collateral, liquidity, and risk management alongside the security.

One stack, three different instruments

The products grouped under the RWA label currently use at least three different rails.

Native or issuer-sponsored securities keep the transfer agent, ownership registry, and securities-law logic close to the token. Securitize, Superstate, and Franklin Templeton use variations of this model. It offers the clearest legal continuity and regulated settlement, usually with permissioned access and limited composability.

Linked tokens provide economic exposure through custodial, note-like, debt-security, or entitlement structures. Ondo Stocks, Backed's xStocks, Robinhood Stock Tokens, and Dinari dShares all sit in this broad category. A token may be transferable and backed by an underlying asset, yet redemption terms, dividends, voting, and other holder rights differ by product. Robinhood, for example, describes its EU stock tokens as MiFID II derivatives rather than ownership of the actual shares.

Synthetic derivatives such as Ondo Perps, Ostium, tradeXYZ, and Injective products offer cash-settled price exposure without ownership of the referenced security. Distribution is simpler and shorting comes naturally, but the product depends more heavily on oracle, margin, and market-maker design.

Asset counts obscure the differences between these rails. A user may want regulated ownership, a transferable stock-linked token in DeFi, or leveraged index exposure on Saturday. Calling all three "tokenized equities" leaves out what the buyer owns, how the position exits, and which infrastructure absorbs stress.

An isolated token issuer controls only a small part of that flow. A stronger position comes from connecting issuance and custody to benchmark pricing, liquidity, collateral, derivatives, and settlement.

Most platforms still occupy one rail. Ondo spans two and has started connecting them: selected Ondo stock tokens can serve as collateral for Ondo Perps. Market depth remains limited, but the integrated flow makes Ondo a useful case study.

Ondo Perps: directional evidence, not market proof

Ondo already issues tokenized Treasury and equity products. Ondo Perps adds leveraged long-short exposure, and selected Ondo stock tokens can be posted as margin.

Ondo PerpsMoni Score1378Website

At the start of Q3 2026, the official markets API listed 31 markets: 21 stocks, three ETFs, three commodities, two indices, and two crypto assets. Maximum leverage ranged from 5x to 20x. Collateral was limited to USDC, SPYON, and QQQON. The two stock-linked assets carried a documented 10% haircut, and credited collateral value was capped at $100,000 per asset (funding documentation, collateral rules). Tokenized-stock collateral was still a limited pre-alpha feature.

Take a trader with $50,000 of tokenized SPY exposure who wants a $40,000 short perp hedge. At a 10% initial-margin requirement, a USDC-only venue requires another $4,000 in stablecoins while the stock token sits elsewhere. Crediting that token with a 10% haircut gives the account $45,000 of collateral value, subject to caps and risk rules. Existing inventory can then support the hedge instead of requiring a separate pool of cash.

Ondo is not alone in offering real-world perpetuals. Ostium and tradeXYZ cover broad sets of markets, while Kraken has launched xStocks perpetual futures with 24/7 leverage of up to 20x. Ondo's distinction is narrower: its own stock tokens can act as inventory, hedge reference, and margin within the same ecosystem.

At that point, only two tokenized stock products were eligible as collateral. Cross-margin also puts the token and the derivative in the same risk account. A fall in collateral value can coincide with losses on the perp, and both draw on the same margin pool. Ondo's documented auto-exchange mechanism can convert collateral once debt reaches its threshold. That protects the venue, though it may force the user out of the underlying asset at an unfavorable time.

Off-hours pricing is a more demanding test. During traditional sessions, Ondo references Pyth and Stork feeds. Once external markets close, its weekend-trading design shifts toward bounded internal price discovery based on impact-price differences and smoothing. Funding and liquidations continue, and order protection can reject trades outside the discovery bounds. Market makers still lose continuous access to the cash stock used for hedging.

Market depth remains the open question. In the same period, Ondo's official endpoints showed roughly $25.4 million in open interest and $229 million in 24-hour volume. A contemporaneous DefiLlama snapshot put tradeXYZ near $3.76 billion in open interest. The sources use different methodologies and timestamps, so the ratio is not an exact measure of market share. It is enough to place Ondo as a functioning but still small venue.

Rewards may generate turnover without leaving durable liquidity behind. Evidence will come from competitive spreads after subsidies fade, continued market-maker participation, a broader collateral set, and the venue's handling of a major weekend gap.

Where the thesis breaks

Public onchain trading may add too little utility to justify its extra risks.

Traditional brokers already provide deep liquidity, shareholder servicing, portfolio margin, short inventory, and regulated execution. A tokenized wrapper introduces dependencies on the issuer, custody, pricing, settlement assets, and sometimes a bridge. It may also remove voting rights or direct redemption. Many investors will accept that trade only when portability, broader access, or collateral reuse offers a concrete benefit.

Institutions can adopt tokenization inside regulated wholesale infrastructure without using public onchain markets. Permissioned settlement, atomic delivery-versus-payment, and tokenized collateral may lower operational costs there even if public equity tokens and offshore perps remain niche products.

Synthetic exposure presents a separate challenge to the thesis. A trader seeking leveraged Tesla exposure may prefer a cash-settled perp and never touch a tokenized Tesla asset. RWA perps could therefore become another branch of crypto derivatives without adding liquidity to tokenized ownership.

The thesis weakens if organic volume disappears with rewards, collateral remains venue-local, or off-hours pricing repeatedly produces liquidation disputes. Comparable access from traditional brokers, delivered with less complexity, would narrow the case further.

A major off-hours shock will reveal more than another asset launch. A credible venue must preserve orderly pricing, avoid a self-reinforcing liquidation cascade, and reconnect cleanly with the underlying market at the open. Retention is the next test. Traders and market makers need to remain after incentives decline before tokenized collateral can be judged as durable market infrastructure.

Final take

Infrastructure is forming around assets that are already onchain. Stablecoins provide settlement, tokenized Treasuries can serve as collateral, oracles carry external prices, and perp venues add shorting and leverage. Only a narrow set of assets currently has the benchmarks, redemption paths, legal structure, and hedge inventory needed to support the full stack.

The next phase of RWAs depends on making the assets already onchain financeable, hedgeable, and liquid.