Layer One: RWAs hit $60 billion, but are they actually being used?

Welcome to Layer One: the newsletter and podcast on the intersection of crypto and the real world. Hosted by The Block's Kelvin Sparks and John Wu, President of Ava Labs, Layer One brings you inside the institutional conversations driving blockchain forward.

This week we were joined by Bart Smith, CEO of Avalanche Treasury Company, to discuss institutional investment vehicles, onchain AI, and the major challenges for the next wave of tokenization.

In this week's newsletter, we're taking a closer look at the state of liquidity in the tokenized asset market to investigate which categories are actually seeing real usage onchain.

RWAs hit $60 billion, but are they actually being used?

The real-world asset sector has continued on its strong growth trajectory throughout 2026, despite the languid performance of the wider crypto market. The total tokenized asset market cap (excluding stablecoins) has increased by almost 50% over the course of the year, surpassing $60 billion for the first time last month. This includes both Represented assets — meaning those walled inside the issuers’ own systems — and Distributed assets, meaning those released into public blockchain ecosystems, with a roughly 50-50 split.

The headline figures are impressive, but the story they tell is incomplete. On this week’s podcast, Bart Smith, CEO of the Avalanche Treasury Company, argued that loading up blockchains with masses of RWA value isn't necessarily real progress if the majority of it remains inert: "The more important thing is not just having assets onchain, but having them be productive."

His concerns are reflected in the data. Although the overall size of the tokenized asset market continues to grow, activity and value remain concentrated at the top end. The largest six RWAs by value account for just over half the entire market. Meanwhile, many smaller tokenized assets show limited activity and transfer volume.

While this distribution is not necessarily unusual for an emerging asset class, it does highlight that the real story of the RWA surge is more nuanced than a single headline figure can communicate.

We analyzed the velocity of some major RWA categories — dividing their total monthly transfer volume by total onchain value — to gauge which are seeing the most active utilization. Stablecoins are, predictably, the clear leader; $300 billion in onchain value and $6.5 trillion in monthly transfers equates to a multiple of 21.6x.

Among the remaining categories, tokenized stocks are seeing the most onchain activity relative to their size, with velocity spiking above 4.0x last month.

Of the approximately 2,600 individual tokenized stocks, 67 boast monthly transfer volume above $10 million, and the top 11 topped $100 million. This comes as the firms behind these assets are increasingly turning their focus from issuance to broader utility. This week, Ondo Finance — the largest tokenized stocks issuer with approximately $850 million total value issued — announced that its stocks will now be usable as collateral on its perps trading platform.

Tokenized commodities are another active RWA class, but also one of the most significant examples of top-heavy concentration. Just two assets, Tether Gold (XAUT) and Paxos Gold (PAXG), account for over 95% of the Distributed market cap, and more than 90% of the typical monthly transfer volume. Other commodities such as diamonds and oil are being tokenized in significant volumes of $100 million or more, but these are almost entirely Represented value and therefore not yet plugged into the wider onchain finance ecosystem.

The relatively small velocity of other categories isn't necessarily a bearish signal: some have inherently lower velocity than stocks, an asset class that naturally invites retail participation and shorter-term speculation. For example, the tokenized credit category encompasses instruments with longer holding periods, meaning its velocity is comparatively low on paper. However, in this category there is still a clear month-over-month uptrend.

Overall, these stats show that the proof-of-concept stage for tokenization is complete, but the frameworks for utilizing these assets are still very much under construction. In other words, issuance has outpaced infrastructure.

However, with tens of billions in value already onchain and network participants eager to put it to work, the next wave of blockchain-native builders could benefit from a slingshot effect as they bridge those access and utility gaps.

Podcast Recap: AVAT CEO Bart Smith on the next major growth phase for crypto

In the Headlines: The stories driving the conversation this week

• Securitize completed its debut on the NYSE, with a parallel blockchain-native stock listing. The tokenization giant went public last week, while simultaneously launching a tokenized version of its SECZ stock on the Avalanche and Solana blockchains. Distinct from 1:1 backed stocks issued by third parties, Securitize's onchain equities are sponsored directly by the issuing firm. This model means the tokenized stock is identical to the offchain version and retains all the same rights. After using its own stock as a proof-of-concept, Securitize plans to tokenize more IPOs over the coming year. 
• Tether is backing LATAM's tokenization drive with a $20 million investment in Mercado Bitcoin. The Brazilian crypto exchange — the largest from the region, active since 2013 — has increasingly moved into tokenization in recent years, as local stablecoin adoption surges. To date, Mercado claims to have tokenized $370 million in assets. The firm plans to use Tether's cash injection to further build its tokenization, payments, and onchain credit infrastructure. 
• Hyundai Card has completed a first proof-of-concept for international stablecoin B2B remittances. The firm used the USDT stablecoin on the Avalanche blockchain to settle a $20,000 payment between its U.S. affiliate, Hyundai Motor America, and a Mexican counterparty. Although modest in size, the exchange marks a milestone for enterprise adoption, with the world's third-largest auto manufacturer settling real cross-border payments on blockchain rails. Hyundai is planning further trials in European markets in the coming weeks.

Top of the Charts: Ethereum dominates total RWA value, but other major L1s lead recent net gains

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