👀 Tokenization Flops in 2024? - Annual Report Data Dive 

It’s officially time for the holiday season, but RWAs aren’t taking any breaks.

Unlike us – no newsletter issue next week as the team is taking some well-earned recuperation time. 😌

We have a data-dense, proprietary report to share this issue, so let’s frame it with some…

🎯🔥 Rapid Fire Takeaways:

🌐 RWA World Report Highlights Rise of Tokenization

🏘️ Real Estate Largest Category at 21.8% Market Share

🌉 Physical Infrastructure Lags - Only 1.9% of Projects 

🦅 The U.S. Houses 34.8% of Tokenization Projects

👑 Ethereum Leads RWA Race with 35.3% of RWA Projects

🟣 Polygon Courts 14.4% of RWA - Boosts the Ethereum Universe

Buckle up for unique insights and data you won’t find anywhere else. 💺

Starting with… 👇

🧩  Product Categories

Understanding the rapidly changing real-world asset tokenization landscape can be challenging. The RWA World taxonomy simplifies things by organizing this diverse range of tokenization initiatives into comprehensible categories. The report breaks down the proportion of projects in each respective category.

This taxonomy helps identify key trends and potential opportunities in the evolving world of tokenization. Countless tokenization projects are already creating value among these intersections.

📊 The 2023 EOY Category Leaderboard

1. 🏘️ - Real Estate (21.8%) 🥇

2. 📈 - Private Equity and Stocks (17.5%) 🥈

3. ♻️ - Sustainable and Responsible Investments (12.3%) 🥉

4. 🏛️ - Public Debt Instruments (11.8%) 

5. 💵 - Financial Services and Payments (10%) 

6. 🃏 - Collectibles (6.6%) 

7. 📜 - Private Debt Instruments (6.2%) 

8. 🛢️ - Commodities (6.2%) 

9. 💼 - Funds and Investment Vehicles (3.3%) 

10. 🛡️ - Insurance and Claims (2.4%) 

11. 🌉 - Physical Infrastructure (1.9%) 

The year ahead is shaping up to be a major year for tokenization initiatives across all categories. We expect Funds and Investment Vehicles to experience some of the most intense public interest and is a category with some of the greatest growth potential throughout 2024. 

The growth between categories happens asymmetrically for many reasons, including but not limited to… 👇

🗺️ Location & Jurisdictions

Tokenization geography remains incredibly diverse, with regulatory sandboxes and new guidance emerging each week. While the U.S. commands a double-digit lead in terms of domiciled tokenization projects, their firm grip as the global financial nexus is starting to slip. 

New German regulations, fast-moving Singapore, and rival China are all staking their claims in the future tokenization gold rush and eating market share. Unless the U.S. gets its regulatory act together on asset tokenization, the next wave of digital financial innovation may continue to come with the tagline “Ex-U.S. Only.”

🗺️ The 2023 EOY Jurisdiction Leaderboard:

1. U.S. (34.8%) 🥇

2. Germany (11.4%) 🥈 

3. China (9%) 🥉

4. Singapore (8.5%)

All other jurisdictions have less than 4%, with the de facto jurisdictions for tokenization still actively emerging. With many central banks now entering more intense discussions regarding CBDC implementations, 2024 will see greater market experimentation to identify institutional preferences further. Taking into account existing financial plumbing is an essential consideration for any jurisdiction seeking to reap the full benefits from any tokenization guidance or sandbox. 

Many institutions have already emerged with environmental preferences for their tokenization, which brings us to… 👇

⛓️ Blockchain Environments and Tokenization

The Ethereum ecosystem continues to dominate, with 35.3% of all tokenization initiatives at the end of 2023. Ethereum remains a natural choice for institutions due to its pedigree as the oldest and most well-capitalized smart contract blockchain network. Corporate entities also boast deep enough pockets to cover the network’s notoriously volatile transaction fees.

Ethereum-adjacent blockchain Polygon commands a market share over three times larger than third place, with 14.4% dominance. Having earlier positioned itself as a scaling solution to Ethereum, the Polygon ecosystem has taken on a life of its own and remains a powerful contender in the tokenization race. 

All other networks maintain a market share of less than 5% but have notable achievements. Avalanche has courted big names like JP Morgan, which uses the blockchain for portfolio management. Solana continues to gain ground in a comprehensive push to become an industry staple, with Ondo Finance recently announcing an expansion to the ecosystem.  

⛓️ The 2023 EOY Blockchain Leaderboard:

1. Ethereum (35.3%) 🥇

2. Polygon (14.4%) 🥈

3. BNB Chain (4.3%) 🥉

4. Celo  (3.7%) 

5. Solana  (3.7%)

6. Arbitrum  (3.7%) 

7. Avalanche  (3.2%)

From there, metrics decline towards two or three RWA projects per chain. That can’t last for very long, though. Every week, we see more capital, talent, and interest pointing toward asset tokenization across industries. 

🎉 Year-End Wrap-Up

It’s been a phenomenal year for asset tokenization. At RWA World, our mission is to help make sense of this rapidly evolving landscape. 

You can read the full Annual Report on our website: https://www.rwaworld.fi/2023-rwa-world-report 

A thesis over a decade in the making is playing out before our eyes, and we’re encouraged by the market validation and public support we’ve received thus far. 

We wish you a safe and prosperous conclusion to 2023, and here’s to a resounding beginning to the year ahead.