Who will replace Ethereum's dominance in the RWA market?

By Chi Anh and Ryan Yoon, Tiger Research

Compiled by AididiaoJP, Foresight News

Summary

• Thanks to its first-mover advantage, past institutional cases, deep on-chain liquidity and decentralized architecture, Ethereum currently remains in the leading position in the RWA market.

• L1 with faster transactions and lower costs Blockchain, and RWA-specific chains designed for compliance are making up for Ethereum’s limitations in cost and performance. These emerging platforms are positioning themselves as the next generation of RWA infrastructure by providing superior technical scalability or built-in compliance features.

• The next phase of critical growth for RWA will depend on three elements: on-chain regulatory compatibility, a service ecosystem built around real-world assets, and ample on-chain liquidity.

Where is the RWA market currently developing?

现实世界资产代币化（RWA）已成为Blockchain行业主流趋势之一。波士顿咨询公司（BCG）等全球咨询公司发布了广泛的市场预测，Tiger Research 研究发现该行业在印度尼西亚等新兴市场正在日益增长。

So, what exactly are RWAs? They refer to the conversion of physical assets (such as real estate, bonds, and commodities) into digital tokens. The tokenization process necessarily requires blockchain infrastructure. Currently, Ethereum is the leading infrastructure to support this type of tokenization.

Source: rwa.xyz, Tiger Research

Despite the growing competition, Ethereum still maintains its dominance in the RWA market. Some RWA blockchains have already emerged, and Solana, which has established a foothold in the DeFi field, is also expanding into the RWA field. Even so, Ethereum still accounts for more than 50% of market activity, which highlights its solid market position.

This report examines the key factors that currently support Ethereum’s dominance in the RWA market and explores the key factors that may influence the next phase of growth and competition.

Why does Ethereum remain ahead?

2.1. First-mover advantage and institutional trust

It’s easy to see why Ethereum has become the default platform for institutional tokenization. It has pioneered key tokenization smart contract standards and is actively preparing for the RWA market.

Backed by a highly active developer community, Ethereum established key tokenization standards such as ERC-1400 and ERC-3643 long before competing platforms emerged. This early foundation provided the necessary technical and regulatory foundation for institutions to attempt RWA projects.

Many institutions need to prioritize evaluating Ethereum before considering alternatives. Some important initiatives by large financial companies or institutions have helped Ethereum become an important infrastructure for the RWA market:

JPMorgan Chase’s Quorum and JPM Coin (2016-2017): To support enterprise use cases, JPMorgan Chase developed a permissioned fork of Ethereum, Quorum, and JPM Coin for interbank transfers. This demonstrated that Ethereum’s architecture can meet regulatory requirements for data protection and compliance even in a private form.

Societe Generale Bond Issue (2019): Societe Generale FORGE issued a €100 million collateralized bond on the Ethereum public mainnet. This demonstrated that regulated securities can be issued and settled on a public blockchain while minimizing the involvement of intermediaries.

EIB Digital Bond (2021): The EIB, in partnership with Goldman Sachs, Santander and Societe Generale, issued a €100 million digital bond on Ethereum. The bond was settled using a central bank digital currency (CBDC) issued by the Bank of France, highlighting the potential of Ethereum in fully integrated capital markets.

These successful pilots reinforce Ethereum’s credibility. For institutions, trust is based on proven use cases and recommendations from other regulated actors. Ethereum continues to attract interest and forms a reinforcing adoption loop.

Source: Securitize

For example, in 2018, Securitize announced in an official document that it would build tools on Ethereum to manage the entire life cycle of digital securities. This move laid the foundation for BlackRock's eventual launch of BUIDL, the largest tokenized fund currently issued on Ethereum.

2.2. Blockchain with continuous inflow of traditional capital

Another key reason for Ethereum’s continued dominance in the RWA market is its ability to convert on-chain liquidity into real purchasing power.

Tokenizing real-world assets is more than just a technical process. A functioning market requires capital that can actively invest and trade these assets. In this regard, Ethereum stands out as the only platform with deep and deployable on-chain liquidity.

Source: rwa.xyz, Arkham, Tiger Research

This is particularly evident on platforms like Ondo, Spark, and Ethena, which all hold large amounts of tokenized BUIDL funds on Ethereum. These platforms have attracted hundreds of millions of dollars by offering products based on tokenized US Treasuries, stablecoin-based lending, and synthetic yield-based USD instruments.

• Ondo Finance has locked in a cumulative TVL of over $600 million through its treasury-backed products USDY and OUSG.

• Spark Protocol used MakerDAO’s DAI liquidity to purchase over $2.4 billion in Treasury bonds.

• Ethena has built a bank-free yield infrastructure on Ethereum with its synthetic stablecoins USDe and sUSDe, attracting institutional demand and DeFi liquidity.

These examples show that Ethereum is more than just a platform for asset tokenization. It provides a strong liquidity foundation to support investment and asset management of large institutions or financial companies. In contrast, many emerging risk asset management platforms have difficulty ensuring continuous capital inflows or maintaining active secondary market activities after the initial token issuance.

The reason for this difference is obvious. Ethereum has integrated stablecoins, DeFi protocols, and compliant infrastructure to create a comprehensive financial environment that ensures that issuance, transactions, and settlements can all be performed on the chain.

Therefore, Ethereum is the most efficient environment for converting tokenized assets into actual purchasing activities, which also becomes Ethereum's structural advantage.

2.3. Building a foundation of trust through decentralization

Decentralization plays a vital role in building trust. Tokenizing real-world assets requires transferring the ownership and transaction records of high-value assets to the chain. In this process, institutions focus on the reliability and transparency of the system. This is where Ethereum's decentralized architecture has its unique advantages.

Ethereum is a public blockchain supported by thousands of independently operated nodes around the world. The network is open to everyone, and all changes are determined by consensus rather than centralized control. As a result, it is able to avoid single points of failure, resist hacker attacks and censorship, and maintain uninterrupted normal operation.

In the RWA market, this structure creates tangible value. Transactions are recorded on an immutable ledger, reducing the risk of fraud. Smart contracts enable trustless transactions without intermediaries. Users can access services, sign agreements, and participate in financial activities without centralized approval.

transparency,SafetyFeatures such as security and accessibility make Ethereum an ideal choice for institutions exploring asset tokenization. Its decentralized system meets key requirements for operating in high-risk financial environments.

Emerging challengers reshape the landscape

Ethereum has made tokenized finance feasible. However, it has also exposed some structural limitations that have hindered wider institutional adoption. These obstacles mainly include limited transaction throughput, latency issues, and unpredictable fee structures.

To address these challenges, Layer 2 Rollup solutions such as Arbitrum, Optimism, and Polygon zkEVM have emerged. Major upgrades including Merge (2022), Dencun (2024), and the already launched Pectra (2025) have improved Ethereum's scalability. However, the network still cannot surpass traditional financial infrastructure. For example, Visa processes more than 65,000 transactions per second, while Ethereum has not yet reached this level. These performance gaps remain a key constraint for institutions that require high-frequency trading or real-time settlement.

Latency and finality also pose challenges. Block generation takes an average of 12 seconds, plusSafetyThe additional confirmations required for settlement, with final confirmation typically taking up to three minutes. In the event of network congestion, delays can increase further, creating challenges for time-sensitive financial operations.

More importantly, the volatility of gas fees is worrisome. During peak periods, a transaction can cost more than $50, and even in normal times, fees often exceed $20. This fee uncertainty complicates business planning and could undermine the competitiveness of Ethereum-based services.

Securitize is a case in point. After running into the limitations of Ethereum, the company expanded to other platforms like Solana and Polygon, while also developing its own blockchain, Converage. While Ethereum played a crucial role in early institutional experiments, it is now under increasing pressure to meet the needs of a more mature, performance-sensitive market.

3.1. High-throughput and cost-effective general-purpose blockchains are emerging

As the limitations of Ethereum become increasingly apparent, more and more institutions are exploring general-purpose blockchains that can replace Ethereum. These platforms can address key performance bottlenecks of Ethereum, especially in terms of transaction speed, fee stability, and finality time.

Source: rwa.xyz, Tiger Research

Despite continued collaboration with institutional investors, the actual scale of tokenized assets (excluding stablecoins) on these platforms remains far lower than that of Ethereum. In many cases, tokenized assets launched on general-purpose chains remain the strategy for multi-chain deployment dominated by Ethereum.

Even so, there are some signs that emerging platforms are still making meaningful progress. In the private credit space, new tokenization schemes are emerging. For example, on zkSync, the Tradable platform has gained traction, accounting for more than 18% of activity in the space, second only to Ethereum.

At this stage, general-purpose blockchains are just beginning to gain a foothold. Platforms like Solana, whose DeFi ecosystem has achieved rapid growth, now face a strategic question: how to convert this momentum into a sustainable position in the RWA space. Simply having excellent technical performance is not enough. Solana needs to meet the trust and compliance expectations of institutional investors.

Ultimately, the success of these blockchains in the RWA market will depend less on raw throughput and more on the ability to deliver tangible value. The differentiated ecosystems built around each chain’s unique strengths will determine their long-term positioning in this emerging space.

3.2. The emergence of RWA-specific blockchain

More and more blockchain platforms are abandoning general-purpose designs and focusing on specific areas. This trend is also evident in the RWA space, where a new wave of RWA-specific chains are emerging that are optimized specifically for the tokenization of real-world assets.

Source: Tiger Research

The idea behind the RWA private blockchain is clear. Tokenizing real-world assets requires direct integration with existing financial regulations, which in many cases makes the use of general-purpose blockchain infrastructure inadequate. The RWA private blockchain needs to fundamentally address unique technical requirements, especially in terms of regulatory compliance.

Compliance processing is a key area. KYC and AML procedures are essential to the tokenization workflow, but these procedures are usually handled off-chain. This approach simply packages traditional financial assets in a blockchain format without redesigning the underlying compliance logic.

The shift now is to be able to move these compliance functions completely on-chain. There is a growing demand for blockchain networks that can not only record ownership but also natively enforce regulatory requirements at the protocol level.

Some RWA-focused blockchains have already started to offer on-chain compliance modules. For example, MANTRA includes decentralized identity (DID) functionality to support compliance enforcement at the infrastructure layer. Other RWA-specific blockchains are expected to take similar initiatives.

In addition to compliance, many platforms are targeting specific asset classes and are positioned with deep domain expertise. Maple Finance focuses on institutional lending and asset management, Centrifuge focuses on trade finance, and Polymesh focuses on regulated securities. Rather than tokenizing widely held assets such as sovereign bonds or stablecoins, these blockchains are using vertical specialization as a competitive strategy.

Still, many platforms are in their early stages. Some have yet to launch their mainnets, and most are still limited in scale and adoption. If general-purpose chains are just beginning to gain traction in the RWA space, specialized chains are still at the starting line.

Who will replace Ethereum in the RWA market?

Ethereum’s dominance of the RWA market is unlikely to remain the same. The current size of the tokenized asset market is less than 2% of its expected size, indicating that the industry is still in its early stages. Ethereum’s dominance to date stems largely from its early product-market fit (PMF). As the market matures and scales, the competitive landscape will change significantly.

Signs of this shift are already evident, with institutions no longer focusing solely on Ethereum. Other general-purpose blockchains and RWA-specific blockchains are being tested in the market, and more and more services are exploring custom chain deployments. Tokenized assets originally issued on Ethereum are now expanding to a multi-chain ecosystem, breaking the previous monopoly.

A key turning point will be the implementation of on-chain compliance. For blockchain finance to truly embody innovation, regulatory processes such as KYC and AML must be conducted directly on the chain. If professional chains can successfully provide scalable protocol-level compliance and drive industry-wide adoption, the current market landscape may be completely overturned.

Equally important is actual purchasing power. Tokenized assets are only worth investing in if there is active capital willing to buy them. Regardless of the technology used, the utility of tokenization is limited without effective liquidity. Therefore, the next generation of RWA platforms must build a strong service ecosystem based on tokenized assets and ensure that users have sufficient liquidity to participate in it.

In short, the next leading RWA platform will likely be able to achieve the following three goals simultaneously:

• Fully integrated on-chain compliance framework

• A service ecosystem built on tokenized assets

• Deep and sustainable liquidity ensures real purchasing power

The RWA market is still in its infancy, and platforms that can provide superior solutions will replace Ethereum in dominance: platforms that can both meet institutional needs and unlock new value in the tokenized economy.

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