Ethereum's Dominance in the RWA Market: Who Will Take Over Next?

This report analyzes Ethereum's dominant position in the current real-world asset tokenization market, examines the structural challenges it faces, and explores which blockchain platforms are expected to lead the next phase of RWA growth.

Key Points Summary

• Ethereum, with its first-mover advantage, past institutional experiments, deep on-chain liquidity, and decentralized architecture, currently leads the RWA market.

• However, general-purpose blockchains with faster and cheaper transactions, as well as RWA-specific chains designed to meet regulatory requirements, are addressing the cost and performance limitations of Ethereum. These emerging platforms are positioning themselves as next-generation infrastructure by offering superior technical scalability or built-in compliance features.

• The next stage of RWA growth will be led by a chain that successfully integrates three elements: on-chain regulatory compliance, a service ecosystem built around real-world assets, and meaningful on-chain liquidity.

1. Where is the RWA market currently growing?

The tokenization of real-world assets (RWA) has become one of the most prominent themes in the blockchain industry. Global consulting firms have released extensive market forecasts, and some institutions have conducted in-depth analyses of emerging markets—highlighting the growing importance of this field.

RWA refers to the conversion of tangible assets such as real estate, bonds, and commodities into digital tokens. This tokenization process requires blockchain infrastructure. Currently, Ethereum is the main infrastructure supporting these transactions.

Despite increasing competition, Ethereum still maintains its dominant position in the RWA market. Professional RWA blockchains have emerged, and some mature platforms in the DeFi space are also expanding into the RWA sector. Nevertheless, Ethereum still accounts for over 50% of the total market activity, highlighting the stability of its existing position.

This report examines the key factors that currently position Ethereum as a dominant player in the RWA market and explores the evolving conditions that may shape the next phase of growth and competition.

2. Why can Ethereum maintain its leading position?

2.1. First-Mover Advantage and Institutional Trust

The reason why Ethereum has become the default platform for institutional tokenization is clear. It was the first to introduce smart contracts and actively prepared for the RWA market.

With the support of 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 groundwork for pilot projects.

Therefore, many institutions began evaluating Ethereum before considering alternatives. Several notable initiatives from the late 2010s helped validate Ethereum's role in institutional finance:

• JPMorgan's Quorum and JPM Coin (2016-2017): To support enterprise use cases, JPMorgan developed Quorum, a permissioned fork of Ethereum. The launch of JPM Coin for interbank transfers indicates that the architecture of Ethereum—albeit in a private form—can meet regulatory requirements for data protection and compliance.

• Société Générale bond issuance (2019): SocGen FORGE issued a guaranteed bond worth 100 million euros on the Ethereum public mainnet. This demonstrates that regulated securities can be issued and settled on a public blockchain while minimizing the involvement of intermediaries.

• European Investment Bank Digital Bond (2021): The European Investment Bank (EIB) collaborated with Goldman Sachs, Banco Santander, and Société Générale to issue a digital bond worth €100 million on Ethereum. The bond was settled using the central bank digital currency (CBDC) issued by the French central bank, highlighting Ethereum's potential in fully integrated capital markets.

These successful pilot cases have enhanced the credibility of Ethereum. For institutions, trust is based on verified use cases and references from other regulated participants. Ethereum's track record continues to attract attention, creating a reinforced adoption loop.

For example, in 2018, a certain platform announced in official documents that it would build tools on Ethereum to manage the entire lifecycle of digital securities. This initiative laid the foundation for the eventual launch of the largest tokenized fund.

2.2. The platform for real capital flow

Another key reason why Ethereum continues to dominate the RWA market is its ability to convert on-chain liquidity into actual purchasing power. The tokenization of real-world assets is not just a technical process. A fully functional market requires capital that can actively invest in and trade these assets. In this regard, Ethereum is the only platform with deep and deployable on-chain liquidity.

This is evident on some platforms, which hold a large amount of tokenized funds on Ethereum. These platforms have attracted hundreds of millions of dollars by offering products based on tokenized US Treasury bonds, stablecoin lending, and synthetic yield USD tools.

• A certain platform has accumulated over $600 million in total locked value (TVL) through its government bond-backed products.

• Another platform utilized liquidity from MakerDAO's DAI to purchase over $2.4 billion worth of real-world government bonds.

• There is another platform that has established a bankless yield infrastructure using its synthetic stablecoin on Ethereum, attracting institutional demand and DeFi liquidity.

These examples indicate that Ethereum is not just a platform for asset tokenization. It provides a strong liquidity foundation that enables real investment and asset management. In contrast, many emerging RWA platforms struggle to ensure capital inflow or secondary market activity after the initial token issuance phase.

The reason for this difference is clear. Ethereum has integrated stablecoins, DeFi protocols, and compliance-ready infrastructure. This has created a comprehensive financial environment where issuance, trading, and settlement can all occur on-chain.

Therefore, Ethereum is the most effective environment for converting tokenized assets into actual purchasing activities. This gives it a structural advantage that goes beyond simple market share.

2.3. Establishing trust through decentralization

Decentralization plays a key role in establishing trust. The tokenization of real-world assets involves transferring the ownership and transaction records of high-value assets into a digital system. In this process, institutions focus on the reliability and transparency of the system. This is where Ethereum's decentralized architecture offers significant advantages.

Ethereum runs as a public blockchain, supported by thousands of independently operating nodes around the world. The network is open to anyone, with changes determined by consensus among participants rather than centralized control. This avoids single points of failure, ensures resilience against hacking and censorship, and maintains uninterrupted uptime.

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, execute agreements, and participate in financial activities without centralized approval.

These features------transparency, security, and accessibility------make Ethereum an appealing choice for institutions exploring asset tokenization. Its decentralized system meets the key requirements for operating in high-risk financial environments.

3. Emerging challengers reshaping the landscape

The Ethereum mainnet has demonstrated the viability of tokenized finance. However, along with success, it has also exposed structural limitations that hinder broader institutional adoption. Key obstacles include limited transaction throughput, latency issues, and an unpredictable fee structure.

To address these challenges, several Layer 2 Rollup solutions have emerged. Major upgrades, including The Merge (2022), Dencun (2024), and the upcoming Pectra (2025), have brought improvements in scalability. Nevertheless, the network still falls short of traditional financial infrastructure. For instance, a certain payment network processes over 65,000 transactions per second, a level that Ethereum has yet to reach. For institutions that require high-frequency trading or real-time settlement, these performance gaps remain a critical constraint.

Delays also pose challenges. The average block generation takes 12 seconds, and with the additional confirmations required for secure settlement, finality can often take up to three minutes. In cases of network congestion, this delay may further increase------which creates difficulties for time-sensitive financial operations.

Moreover, the volatility of Gas fees remains a concerning issue. During peak times, transaction fees have exceeded $50, and even under normal circumstances, costs frequently rise above $20. This level of fee uncertainty complicates business planning and may undermine the competitiveness of services based on Ethereum.

A certain platform has well illustrated this dynamic. After encountering the limitations of Ethereum, the company expanded to other platforms while also developing its own chain. Although Ethereum played a crucial role in facilitating early institutional experiments, it is now facing increasing pressure to meet the demands of a more mature and performance-sensitive market.

3.1. The Rise of a Fast, Efficient, and Cost-Effective General Blockchain

As the limitations of Ethereum become increasingly apparent, institutions are exploring alternative advantages in key performance bottlenecks such as transaction speed, cost stability, and finality time to complement Ethereum's general-purpose blockchain.

However, despite ongoing collaboration with institutional participants, the actual number of tokenized assets on these platforms (excluding stablecoins) is still much lower compared to Ethereum. In many cases, the tokenized assets launched on general-purpose chains are still part of the multi-chain deployment strategy dominated by Ethereum.

Even so, there are still signs of substantial progress. In the private credit sector, new tokenization initiatives are emerging. For example, on one platform, a platform has gained attention, accounting for over 18% of the activity in this field—second only to Ethereum.

At this stage, the general blockchain is just beginning to establish its foothold. Platforms like certain ones that have experienced rapid growth in their DeFi ecosystems now face a strategic question: how to translate this momentum into a sustainable position in the RWA field. Relying solely on excellent technical performance is not enough. To compete with Ethereum, it is necessary to provide infrastructure and services that can meet the trust and compliance expectations of institutional investors.

Ultimately, the success of these blockchains in the RWA market will depend less on the original throughput and more on their ability to provide tangible value. The differentiated ecosystems built around the unique advantages of each chain will determine their long-term positioning in this emerging field.

3.2. The Emergence of RWA Dedicated Blockchains

More and more blockchain platforms are abandoning generic design in favor of specialization in specific domains. This trend is also evident in the RWA sector, where a wave of new dedicated chains optimized for the tokenization of real-world assets is emerging.

The reasons for a dedicated blockchain for RWA are clear. The tokenization of real-world assets needs to be directly integrated with existing financial regulations, which makes the use of generic blockchain infrastructure insufficient in many cases. Specific technical requirements—especially those around regulatory compliance—must be addressed from the ground up.

A key area is compliance processing. KYC and AML procedures are essential for tokenized workflows, but these have traditionally been handled off-chain. This approach limits innovation as it merely wraps traditional financial assets in a blockchain format without redesigning the underlying compliance logic.

The current shift is to transform