Understanding Real World Assets & Tokenization in Web3

RWA (Real World Assets) is a growing narrative with over $23B worth of assets tokenized. RWA has already brought Private Credit, US Treasury Debt, Commodities, and more on-chain. This improves the on-chain liquidity with a support of exposing to Traditional assets in a decentralized way.

Source: RWA.xyz

Research from the Security Token Market suggests that the total RWA value on-chain would surpass $30T by 2030. This might come as over speculation, but the current trends signal something similar. RWAs have shown immense growth, growing from $8.6 billion in January 2024 to $23.3 billion in Q2 2025—an impressive ~170% increase. Moreover, YTD growth has shown an increase of about ~45% in tokenized assets.

With this, also comes certain security concerns, which we addressed in our research on ERC-4626 vaults, which are mainly used in the tokenization of assets on-chain. Check it out here.
 

What are Real World Assets (RWAs)?

Real World Assets, or RWAs, refer to physical or traditional financial instruments that hold intrinsic value and can be bought on-chain. Bringing these assets on-chain simply removes the borders to expose oneself to a certain bucket of assets.

These are the following types of assets that are already tokenized, though it is important to note that only a fraction of these instruments are on-chain:

• Private Credit
• US Treasury Debt
• Commodities
• Institutional Alternative Funds
• Stocks
• Corporate Bonds
   

Tokenization Benefits and Categorization

Tokenization is the process of converting assets (mostly physical or traditional instruments) into digital tokens. These digital assets can then be traded on the blockchain on the liquid markets deployed on Decentralized Exchanges.

Tokenization Key Benefits:

1. Increased Liquidity: Traditional illiquid assets like real estate or fine art become tradable 24/7 on decentralized marketplaces.
    
2. Fractional Ownership: Tokenization allows assets to be split into smaller units, making small investments and gaining exposure to a certain commodity easier.
    
3. Transparency: In most cases, these assets are traded on public blockchains, which are immutable and can be referred to or verified by anyone that promotes transparency in the asset movement and holdings.
    
4. Trustlessness: This is important as there are no intermediaries involved on public blockchains, and you are directly holding an asset in your wallet.
    

Different Types of Asset Classes

Though we discussed briefly different asset classes currently available to trade on-chain, this section is a deeper look on the same. Most of this section is sourced from RWA.xyz

Stablecoins

Stablecoins are the biggest asset class that comes under Real World Assets. The current stablecoin market cap is about $237B, with a monthly transfer volume of $2.88T.

Two major contributors are USDT from Tether and USDC from Circle, followed by USDS from Sky Lending (previously Maker DAO). Recently, Circle also did an IPO, which surged 400% in a single day which shows how much this market is yet to expand.

Stablecoins are simply a stable store of value on public blockchains. These assets are 1:1 pegged to a currency, mostly the US dollar, because of its stability and more overseas trade control.
 

US Treasuries

US Treasuries are currently at a total value of $7.3B, with major contributors being Securitize (backed by Blackrock) and Ondo Finance.

These funds issue stablecoins backed by the US Treasuries. Since these stablecoins are directly backed by yields, they are yield bearing in nature as well.
 

Global Bonds

Global Bonds are currently at a total value of $245M. This category is slowly declining in terms of holders as the shift is increased towards US Treasuries and other commodities. The major contributor here is Spiko.

Private Credit

Private Credit is a new and emerging asset class on-chain, with the total active loans value being $13.6B and with the average APR of 10%.

Private Credit is a way for users to lend to private borrowers. Usually, protocols do all the due diligence on these borrowers, and users get access to a new risk class.

There are other categories like Commodities (like Gold offered by Paxos [PAXG]), Institutional Funds, and Stocks, which are also gaining traction and have their unique user base. Read our more detailed guide here.

Token Standards: ERC-20, ERC-721, and ERC-4626

Different token standards power these ecosystems:

• ERC-20: Fungible tokens representing shares of an asset pool.
• ERC-721/1155: For non-fungible or semi-fungible representations (e.g., a single property or bond).
• ERC-4626: A newer standard defining tokenized yield-bearing vaults—ideal for abstracting real-world yield streams into composable DeFi primitives.

We have also recently published an audit guideline on the ERC-4626 vault standard. This guide covers the ERC comprehensively and talks about various security concerns when dealing with tokenization in general. Check it out here.
 

Role of Security Audits

In the tokenized RWA space, smart contract audits are important to build a strong foundation. We cover the following when we do our audit process:

• Economic modeling: Ensuring incentives align with intended protocol use.
• Off-chain data dependencies: Validating oracle configurations and fallback mechanisms.
• Legal-technical mappings: Ensuring token behavior matches the legal structure of the underlying asset.
• Vault design integrity: For ERC-4626-based systems, confirming proper implementation of deposit, withdraw, and yield distribution flows.

We work with RWA-focused protocols to ensure resilience and security through our specialized RWA audit service.
 

Conclusion

Tokenized Real World Assets are growing at a promising rate. With reports suggesting the total on-chain value of RWA surpassing $30T by 2030, the industry is poised to grow. Multiple funds, including BlackRock, Frank Templeton involvment shows high conviction.

Though major financial assets coming on-chain comes with major security concerns and it is important for firms to go through a rigorous auditing process to remove any attack routes.

At QuillAudits, with our 7+ years of experience, we provide RWA audits to secure smart contracts and user funds.