Standard Chartered expects decentralized assets (DeFi) to grow 37-fold to $2.7 trillion by the end of 2030.
The expansion will be driven by both tokenized real-world assets (RWAs) and crypto assets passing through onchain protocols, Geoff Kendrick, head of digital assets research at Standard Chartered, said in a research note on Monday.
“I think the next opportunity for generational wealth in digital assets will come through DeFi protocols,” Kendrick said. “I estimate that by the end of 2030, the amount of tokenized assets active in DeFi will increase 37 times.”
According to Kendrick, only 3% of stablecoins and 10% of tokenized RWAs are currently used in DeFi. He predicted that the share of tokenized assets used in DeFi will augment to 30% by the end of 2030 from about 3.5% currently.
The forecast highlights growing institutional expectations that tokenization could funnel more capital into DeFi. However, reaching $2.7 trillion would require rapid growth in onchain assets and a nearly ninefold augment in the share of tokenized value used in DeFi protocols.
Total value of decentralized finance locked. source: DefiLlama
Standard Chartered previously forecast that non-tokenized Stablecoin RWAs will grow to $2 trillion by the end of 2028, with the majority of the projected market being tokenized money market funds and US equities.
While Standard Chartered expects tokenized assets to drive much more activity in DeFi, some researchers caution that tokenization does not guarantee deep or unified markets.
Axis CEO Chris Kim previously told Cointelegraph that issuing the same asset on multiple blockchains and formats could result in siled liquidity, price gaps and higher costs, limiting the ease of trading tokenized assets even as their overall market value increases.
Oya Celiktemur, Ondo Finance’s sales director for Europe, the Middle East and Africa, also said at April’s Blockchain Week in Paris that tokenizing illiquid assets does not “magically” make them liquid.
Uniswap seen as a potential hub for tokenized markets
Kendrick said Uniswap could become a key trading system as more tokenized assets move on the network. He highlighted the scale, brand and operating history of the decentralized exchange over multiple cryptocurrency cycles.
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Kendrick added that these attributes may be particularly significant for conventional financial institutions, for which security and reliability are likely to be a priority when bringing tokenized risk-weighted assets to DeFi.
“If Uniswap manages to commercialize enough and create significant enough TradFi partnerships to enable scaling, its market cap to transaction fee multiple will likely increase, closing the gap with Coinbase,” he wrote.
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