DeFi Assets Could Surge to $2.7 Trillion by 2030 Thanks to Tokenization: Standard Chartered
Banking giant Standard Chartered predicts decentralized finance will see total value locked soar to $2.7 trillion within six years, propelled by tokenization and organic crypto expansion.
Decentralized finance (DeFi) could witness total value locked surge to $2.7 trillion by the close of 2030, representing a 37-fold increase from current levels, according to projections from Standard Chartered.
This substantial growth trajectory would be fueled by a combination of tokenized real-world assets (RWAs) and native cryptocurrency assets flowing through blockchain-based protocols, according to Geoff Kendrick, who leads digital assets research at Standard Chartered, in a research report published on Monday.
I think the next opportunity for generational wealth in digital assets is going to come via the DeFi protocols. I estimate that the amount of tokenized assets active in DeFi will 37x by the end of 2030.
Geoff Kendrick, Standard Chartered
Kendrick noted that currently, merely 3% of stablecoins and 10% of tokenized RWAs find active deployment within DeFi ecosystems. His analysis projects that the proportion of tokenized assets actively utilized in DeFi will climb to 30% by 2030's conclusion, up from approximately 3.5% at present.
The projection highlights mounting institutional confidence that tokenization has the potential to funnel substantially more capital into DeFi markets. That said, achieving the $2.7 trillion milestone would necessitate both rapid expansion of onchain assets and a near ninefold increase in the percentage of tokenized value deployed across DeFi protocols.
In earlier projections, Standard Chartered estimated that tokenized RWAs excluding stablecoins would expand to $2 trillion by 2028's end, with tokenized money-market funds and United States equities representing the majority of that anticipated market expansion.
Though Standard Chartered anticipates tokenized assets will substantially boost DeFi activity levels, certain industry researchers have issued warnings that tokenization alone doesn't ensure deep or consolidated markets.
Chris Kim, CEO of Axis, previously shared with Cointelegraph that deploying identical assets across various blockchains and formats can fragment liquidity pools, generate pricing inconsistencies and elevate transaction costs, constraining the tradability of tokenized assets despite overall market capitalization growth.
Ondo Finance's sales director for Europe, the Middle East and Africa, Oya Celiktemur, similarly remarked at Paris Blockchain Week in April that the tokenization of an illiquid asset doesn't "magically" transform it into a liquid one.
Uniswap seen as a potential hub for tokenized markets
According to Kendrick, Uniswap has the potential to become a central trading platform as increasing volumes of tokenized assets migrate onchain. He emphasized the decentralized exchange's market dominance, established reputation and proven track record of functioning successfully across numerous cryptocurrency market cycles.
These characteristics could prove especially valuable to traditional financial institutions, Kendrick noted, as they're expected to place premium value on security and dependability when introducing tokenized RWAs into DeFi environments.
If Uniswap can commercialise enough and create significant enough TradFi partnerships to scale, its market cap-to transaction fees multiple is likely to increase, narrowing the gap with Coinbase.
Geoff Kendrick, Standard Chartered