RWA Power Map: Understanding How the Five Major Protocols "Divide" Trillions in Institutional Capital

Author: Mesh

Translation: Deep潮TechFlow

Honestly, the development of institutional-grade RWA tokenization over the past six months is worth close attention. The market size is approaching $20 billion. This is not hype; genuine institutional capital is deploying on-chain.

I have been following this space for some time, and recent developments have been astonishing. From government bonds, private credit to tokenized stocks, these assets are moving onto blockchain infrastructure at a faster pace than market expectations.

Currently, five protocols form the foundation of this field: RaylsLabs, OndoFinance, Centrifuge, CantonNetwork, and Polymesh. They are not competing for the same clients but are each targeting different institutional needs: banks require privacy, asset managers seek efficiency, Wall Street firms demand compliance infrastructure.

This is not about who “wins,” but about which infrastructure institutions choose, and how traditional assets are migrating trillions of dollars through these tools.

The overlooked market is approaching $20 billion

Three years ago, tokenized RWA was hardly a category. Today, on-chain deployment of assets like government bonds, private credit, and public stocks is nearing $20 billion. Compared to the $6-8 billion range at the start of 2024, this growth is significant.

Honestly, the performance of submarkets is more interesting than the total size.

According to the market snapshot from rwa.xyz as of early January 2026:

• Government bonds and money market funds: about $8-9 billion, accounting for 45%-50% of the market
• Private credit: $2-6 billion (smaller base but fastest-growing, 20%-30%)
• Public stocks: over $400 million (rapid growth, mainly driven by OndoFinance)

Three major drivers accelerating RWA adoption:

• Yield arbitrage attractiveness: Tokenized government bond products offer 4%-6% returns with 24/7 access, whereas traditional markets have T+2 settlement cycles. Private credit tools provide 8%-12% returns. For financial managers managing billions in idle capital, this is straightforward.
• Regulatory frameworks improving gradually: The EU’s MiCA regulation has been enforced in 27 countries. SEC’s “ProjectCrypto” is advancing on-chain securities frameworks. Meanwhile, No-Action Letters enable infrastructure providers like DTCC to tokenize assets.
• Mature custody and oracle infrastructure: Chronicle Labs has handled over $20 billion in total value locked, and Halborn has completed security audits for major RWA protocols. These infrastructures are mature enough to meet fiduciary standards.

Despite this, industry faces huge challenges. Cross-chain transaction costs are estimated at up to $1.3 billion annually. Due to high capital flow costs exceeding arbitrage gains, price differences of 1%-3% exist for the same assets traded across different blockchains. The conflict between privacy needs and regulatory transparency remains unresolved.

RaylsLabs: Privacy infrastructure truly needed by banks

@RaylsLabs positions itself as a compliance-first bridge connecting banks with DeFi. Developed by Brazilian fintech Parfin, and supported by FrameworkVentures, ParaFiCapital, ValorCapital, and AlexiaVentures, its architecture is a public permissioned EVM-compatible L1 blockchain designed specifically for regulators.

I’ve been following its Enygma privacy tech stack development for some time. The key isn’t just technical specs but its methodology. Rayls is solving real privacy needs of banks, not catering to DeFi community fantasies.

Core features of Enygma privacy stack: 1. Zero-knowledge proofs: ensure transaction confidentiality; 2. Homomorphic encryption: support computations on encrypted data; 3. Native operations across public chains and private enterprise networks; 4. Confidential payments: support atomic swaps and embedded “payment delivery”; 5. Programmable compliance: selectively disclose data to designated auditors.

Real-world applications: 1. Brazil Central Bank: for CBDC cross-border settlement pilot; 2. Núclea: regulated tokenization of receivables; 3. Multiple undisclosed node clients: private payment workflows.

Latest progress

On January 8, 2026, Rayls announced completion of a security audit by Halborn. This provides institutional-grade security certification for its RWA infrastructure, especially important for banks evaluating production deployment.

Additionally, the AmFi alliance plans to reach $1 billion in tokenized assets on Rayls by June 2027, with a reward of 5 million RLS tokens. AmFi is Brazil’s largest private credit tokenization platform, bringing immediate transaction volume to Rayls and setting an 18-month milestone. This is one of the largest institutional RWA commitments in any blockchain ecosystem so far.

Target markets and challenges

Rayls’ target clients are banks, central banks, and asset managers needing institutional-grade privacy. Its public permissioned model restricts validator participation to licensed financial institutions, ensuring confidentiality of transaction data.

However, the challenge for Rayls is demonstrating market traction. Without public TVL data or announced client deployments outside pilots, the $1 billion AmFi target by mid-2027 is a key test.

OndoFinance: The fastest race in cross-chain expansion

Ondo has achieved the fastest expansion from institutional to retail in RWA tokenization. Starting from a protocol focused on government bonds, it has now become the largest platform for tokenized public stocks.

As of early January 2026:

• TVL: $1.93 billion
• Tokenized stocks: over $400 million, 53% market share
• USDY holdings on Solana: about $176 million

I personally tested the USDY product on Solana; the user experience is seamless—combining institutional-grade government bonds with DeFi convenience, which is key.

Latest updates

On January 8, 2026, Ondo launched 98 new tokenized assets covering stocks and ETFs in AI, EV, and thematic sectors. This is not small-scale testing but rapid advancement.

Ondo plans to launch tokenized US stocks and ETFs on Solana in Q1 2026, its most aggressive move into retail-friendly infrastructure. According to its roadmap, as expansion continues, it aims to list over 1,000 tokenized assets.

Industry focus:

• AI sector: Nvidia, data center REITs
• EV sector: Tesla, lithium battery manufacturers
• Thematic investments: traditionally limited by minimum investment thresholds

Multi-chain deployment strategy:

• Ethereum: DeFi liquidity and institutional legitimacy
• BNB Chain: reach exchange-native users
• Solana: support large-scale consumer use with sub-second finality

Honestly, Ondo’s TVL reached $1.93 billion while its token prices declined—that’s the most important signal: protocol growth prioritizes institutional capital over speculation. This growth is mainly driven by institutional demand for government bonds and DeFi protocols’ need for idle stablecoin yields. The TVL increase during Q4 2025 market consolidation shows real demand, not just chasing hype.

By establishing custody relationships with brokers-dealers, completing Halborn security audits, and launching products on three major blockchains within six months, Ondo has gained a competitive edge, making it hard for rivals to catch up. For example, its competitor Backed Finance’s tokenized assets are only about $162 million.

However, Ondo still faces challenges:

• Price volatility outside trading hours: tokens can be transferred anytime, but pricing still references exchange hours, potentially causing arbitrage during US night trading.
• Compliance restrictions: securities laws require strict KYC and verification, limiting the “permissionless” narrative.

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Centrifuge: How asset managers truly deploy billions

Centrifuge has become the standard infrastructure for institutional private credit tokenization. By December 2025, its TVL soared to $1.3–$1.45 billion, driven by actual deployment of institutional capital.

Major institutional deployment cases

• Janus Henderson partnership (global asset manager with $373 billion AUM)
• Anemoy AAACLO fund: fully on-chain AAA-rated collateralized loan obligation (CLO)
• Using the same portfolio management team as its $21.4 billion AAACLO ETF
• Announced expansion plans in July 2025, targeting an additional $250 million on Avalanche
• Grove capital allocation (institutional credit protocol in Sky ecosystem)
• Committed capital allocation strategy reaching $1 billion
• Initial seed capital: $50 million
• Founding team from Deloitte, Citigroup, BlockTower Capital, Hildene Capital Management
• ChronicleLabs oracle partnership (announced Jan 8, 2026)
• Asset proof framework: provides cryptographically verified holdings data
• Supports transparent NAV calculation, custody verification, and compliance reporting
• Dashboard access for LPs and auditors

I’ve been following oracle issues in blockchain; Chronicle’s approach is the first to meet institutional needs: providing verifiable data without sacrificing on-chain efficiency. The Jan 8 announcement included a video demo showing this solution in real use, not just future promise.

Unique operation mode of Centrifuge:

Unlike competitors that simply package off-chain products, Centrifuge tokenizes credit strategies directly at issuance. Its process:

• Issuers design and manage funds via a transparent, single workflow;
• Institutional investors allocate stablecoins for investment;
• Funds flow to borrowers after credit approval;
• Repayments are proportionally distributed to token holders via smart contracts;
• AAA assets yield 3.3%-4.6% APY, fully transparent.

Supported multi-chain networks: Ethereum; Base, Arbitrum, Celo, Avalanche.

The key is that asset managers need to prove on-chain credit can support deployment of billions, and Centrifuge has already achieved this. Its partnership with Janus Henderson alone provides tens of billions of capacity.

Furthermore, Centrifuge’s leadership in setting industry standards (co-founding Tokenized Asset Coalition and Real-World Asset Summit) further cements its role as infrastructure rather than just a product.

Although $1.45 billion TVL demonstrates institutional demand, its 3.8% target APY appears modest compared to higher-risk, higher-return opportunities in DeFi history. How to attract DeFi-native liquidity providers beyond Sky ecosystem allocations will be Centrifuge’s next challenge.

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CantonNetwork: Wall Street’s blockchain infrastructure

Canton is a response to institutional-grade, permissioned, DeFi-oriented blockchain: a privacy-preserving public network supported by top Wall Street firms.

Participants: DTCC (Depository Trust & Clearing Corporation), BlackRock, Goldman Sachs, Citadel Securities.

Canton aims to tap into the $37 trillion annual settlement flow processed by DTCC in 2024. Yes, that number is correct.

DTCC partnership (Dec 2025)

Collaboration with DTCC is crucial. It’s not just a pilot but a core commitment to building US securities settlement infrastructure. With SEC No-Action Letter approval, this partnership allows some US Treasuries held by DTCC to be tokenized natively on Canton, with a planned production MVP in H1 2026.

Key details:

• DTCC and Euroclear serve as co-chairs of the Canton Foundation;
• Not just participants but governance leaders;
• Initial focus on Treasuries (lowest credit risk, high liquidity, clear regulation);
• Post-MVP, potential expansion to corporate bonds, equities, structured products.

Initially, I was skeptical about permissioned blockchains. But DTCC’s involvement changed my view. Not because of technical superiority, but because this is the infrastructure traditional finance will truly adopt.

Temple Digital platform launch (Jan 8, 2026): Canton’s institutional value proposition is further clarified in the private trading platform launched by Temple Digital Group on Jan 8, 2026.

Canton offers sub-second matching speed via a central limit order book, non-custodial architecture. Currently supports crypto and stablecoin trading, with plans to support tokenized stocks and commodities in 2026.

Ecosystem partners: 1. Franklin Templeton manages $828 million in money market funds; 2. J.P. Morgan via JPM Coin for settlement.

Canton’s privacy architecture: Based on smart contract level privacy using Daml (Digital Asset Modeling Language):

• Contracts specify which parties see which data;
• Regulators have full audit access;
• Counterparties can view transaction details;
• Competitors and the public cannot see transaction info;
• State updates propagate atomically across the network.

For institutions used to Bloomberg terminals and dark pools, Canton’s architecture offers blockchain efficiency without revealing trading strategies—an especially rational design. Wall Street will never expose proprietary trading activities on a transparent public ledger. Canton’s 300+ participating institutions demonstrate its appeal. However, much of the reported trading volume may be more pilot activity than actual production flow. The current limitation is development speed: the MVP scheduled for H1 2026 reflects multi-quarter planning, whereas DeFi protocols often launch new products within weeks.

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Polymesh: The security token blockchain born for compliance

Polymesh stands out through protocol-level compliance rather than complex smart contracts. As a blockchain designed specifically for regulated securities, Polymesh performs compliance verification at the consensus layer, avoiding reliance on custom code.

Core features:

• Protocol-level identity verification: verified via licensed KYC providers;
• Embedded transfer rules: non-compliant transactions are rejected at consensus;
• Atomic payment delivery: transactions settle within 6 seconds.

Production integrations:

• Republic (Aug 2025): supports private securities issuance;
• AlphaPoint: over 150 exchanges across 35 countries;
• Target sectors: regulated funds, real estate, corporate equity, etc.

Advantages: No need for custom smart contract audits; protocol automatically adapts to regulatory changes; cannot execute non-compliant transfers.

Challenges and future: Polymesh currently runs as a standalone chain, isolating it from DeFi liquidity. To address this, a bridge to Ethereum is planned for Q2 2026. Whether it can be delivered on time remains to be seen. Frankly, I underestimated the potential of this “compliance-native” architecture. For security token issuers frustrated by ERC-1400 complexity, Polymesh’s approach—embedding compliance directly into the protocol—is more attractive: no reliance on complex smart contracts.

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How do these protocols divide the market?

These five protocols do not compete directly because they address different problems:

Privacy solutions:

• Canton: Daml-based, focused on Wall Street’s counterparty relationships;
• Rayls: zk-proofs providing bank-grade mathematical privacy;
• Polymesh: protocol-level identity verification offering a one-stop compliance solution.

Expansion strategies:

• Ondo: manages $1.93 billion across three chains, prioritizing liquidity speed over depth;
• Centrifuge: focuses on institutional credit market of $1.3–$1.45 billion, prioritizing depth over speed.

Target markets:

• Banks/CBDC → Rayls
• Retail/DeFi → Ondo
• Asset managers → Centrifuge
• Wall Street → Canton
• Securities tokens → Polymesh

In my view, this market segmentation is more important than many realize. Institutions will not choose the “best blockchain” but will select infrastructure that solves their specific compliance, operational, and competitive needs.

Unresolved issues

Inter-chain liquidity fragmentation: Cross-chain fragmentation costs are very high, estimated at $1.3–$1.5 billion annually. High bridging costs cause 1%-3% price differences for the same assets across chains. If this persists until 2030, annual costs could exceed $75 billion. This is one of my biggest concerns. Even with the most advanced tokenization infrastructure, if liquidity is dispersed across incompatible chains, efficiency gains are lost.

Privacy vs. transparency conflict: Institutions need confidentiality for transactions, while regulators require auditability. In multi-party scenarios (issuers, investors, rating agencies, regulators, auditors), each needs different visibility levels. No perfect solution exists yet.

Regulatory fragmentation: EU’s MiCA regulation applies in 27 countries; US requires case-by-case No-Action Letters, taking months; cross-border capital flows face jurisdictional conflicts.

Oracle risks: Tokenized assets depend on off-chain data. If data providers are attacked, on-chain assets may reflect false realities. Chronicle’s asset proof framework offers some solutions, but risks remain.

Path to trillions: key catalysts in 2026

Catalysts to watch in 2026:

Ondo’s Solana launch (Q1 2026): Testing whether retail distribution can create sustainable liquidity; success indicated by over 100,000 holders, proving real demand.

Canton’s DTCC MVP (H1 2026): Validating blockchain’s feasibility in US Treasury settlement; if successful, trillions of dollars could shift onto on-chain infrastructure.

US CLARITY Act passage: Providing clear regulation; enabling hesitant institutional investors to deploy capital.

Centrifuge’s Grove deployment: $1 billion allocation planned for 2026; testing real capital flow in credit tokenization; smooth execution without credit events will boost asset managers’ confidence.

Market forecasts

• 2030 target: $2–$4 trillion in tokenized assets;
• Growth from current $197 million by 50–100x;
• Assumptions: regulatory stability, cross-chain interoperability readiness, no major institutional failures.

Industry-specific growth projections:

• Private credit: from $20–$60 million to $150–$200 billion (small base, highest growth rate);
• Tokenized government bonds: potential over $5 trillion if money market funds migrate on-chain;
• Real estate: estimated $3–$4 trillion (depending on whether property registries adopt blockchain-compatible titles).

Milestone of hundreds of billions:

• Expected realization: 2027–2028
• Distribution: institutional credit $30–$40 billion; government bonds $30–$40 billion; tokenized stocks $20–$30 billion; real estate/commodities $10–$20 billion.

This requires a 5x increase from current levels. Although ambitious, considering the momentum in Q4 2025 and upcoming regulatory clarity, this goal is not out of reach.

Why are these five protocols so critical?

Early 2026 institutional RWA landscape reveals an unexpected trend: no single winner, because no single market.

Frankly, this is exactly how infrastructure should evolve.

Each protocol addresses different issues:

• Rayls → banking privacy;
• Ondo → tokenized stock distribution;
• Centrifuge → on-chain deployment for asset managers;
• Canton → Wall Street infrastructure migration;
• Polymesh → simplifying securities compliance.

From $8.5 billion in early 2024 to nearly $20 billion now, the market size indicates demand has surpassed mere speculation.

Core needs of institutional players:

• CFOs: yield and operational efficiency;
• Asset managers: lower distribution costs, expand investor base;
• Banks: compliant infrastructure.

The next 18 months are critical

• Ondo’s Solana launch → test retail market expansion;
• Canton’s DTCC MVP → test institutional settlement;
• Centrifuge’s Grove deployment → test real capital in credit tokenization;
• Rayls’ $1 billion AmFi target → test privacy infrastructure adoption.

Execution takes precedence over architecture; results matter more than blueprints. That’s the key at this moment.

Traditional finance is heading into a long-term on-chain migration. These five protocols provide the necessary infrastructure: privacy layers, compliance frameworks, and settlement infrastructure. Their success will determine the future path of tokenization—whether as efficiency improvements to existing structures or as a new system replacing traditional financial intermediaries.

The infrastructure choices made by institutions in 2026 will shape the industry landscape for the next decade.

Key milestones in 2026

• Q1: Ondo’s Solana launch (98+ stocks listed);
• H1: Canton’s DTCC MVP (US Treasury tokenization based on Wall Street infrastructure);
• Ongoing: Centrifuge’s $1 billion Grove deployment; Rayls’ ecosystem development with $1 billion AmFi.

Trillions of assets are on the horizon. NFA.