RWA Power Map: Understanding How 5 Major Protocols "Divide" the Capital of Top Institutions in One Article

Author: Mesh
Translation: Shen Chao TechFlow

Honestly, the development of institutional-grade RWA tokenization over the past six months warrants close attention. The market size is approaching $20 billion. This is not hype; genuine institutional capital is being deployed on-chain.
I have been following this field for some time, and the recent pace of development is astonishing. From government bonds, private credit to tokenized stocks, these assets are moving onto blockchain infrastructure at a faster rate than market expectations.
Currently, five protocols form the foundation of this space: Rayls Labs, Ondo Finance, Centrifuge, Canton Network, and Polymesh. They are not competing for the same clients but are targeting different institutional needs: banks require privacy, asset managers seek efficiency, and Wall Street firms demand compliance infrastructure.
This is not about who “wins,” but about which infrastructure institutions choose and how traditional assets are migrated through these tools, amounting to trillions of dollars.

Undervalued Market Approaching $20 Billion
Three years ago, tokenized RWA was almost a non-category. Today, on-chain assets for government bonds, private credit, and public stocks are 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 in early January 2026:

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

Three major drivers accelerate RWA adoption:

• Yield arbitrage attractiveness: Tokenized government bonds offer 4%-6% returns with 24/7 access, whereas traditional markets have T+2 settlement cycles. Private credit tools provide 8%-12% yields. For CFOs managing billions in idle capital, this is straightforward.
• Gradual regulatory framework improvement: The EU’s Markets in Crypto-Assets Regulation (MiCA) has been enforced in 27 countries. SEC’s “ProjectCrypto” is pushing on-chain securities frameworks. Meanwhile, No-Action Letters enable infrastructure providers like DTCC to tokenize assets.
• Maturity of custody and oracle infrastructure: Chronicle Labs has handled over $20 billion in total locked value, and Halborn has completed security audits for major RWA protocols. These infrastructures are mature enough to meet custodial standards.

Despite this, the industry still faces significant challenges. Cross-chain transaction costs are estimated at up to $130 million annually. Due to higher capital flow costs than arbitrage profits, transaction spreads of 1%-3% exist across different blockchains for the same assets. The conflict between privacy needs and regulatory transparency remains unresolved.

Rayls Labs: Privacy Infrastructure Wall Street Truly Needs
@RaylsLabs positions itself as a compliance-first bridge connecting banks and DeFi. Developed by Brazilian fintech Parfin and supported by FrameworkVentures, ParaFiCapital, ValorCapital, and AlexiaVentures, its architecture is a public permissioned, EVM-compatible Layer 1 blockchain designed specifically for regulators.
I have been following its Enygma privacy tech stack development for some time. The key is not just technical specs but its methodology. Rayls is solving real banking needs rather than catering to DeFi’s imagination of banking.

Core features of the Enygma privacy stack:

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

Practical use cases:

1. Central Bank of Brazil: for CBDC cross-border settlement pilot;
2. Núclea: regulated accounts receivable tokenization;
3. Multiple undisclosed node clients: private settlement workflows.

Latest developments
On January 8, 2026, Rayls announced the 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 current blockchain ecosystem.

Target Market and Challenges
Rayls’ target clients are banks, central banks, and asset managers requiring institutional privacy. Its public permissioned model limits validator participation to licensed financial institutions, ensuring transaction confidentiality.

However, the challenge for Rayls is demonstrating market attractiveness. Without publicly available TVL data or client deployments beyond pilots, the $1 billion AmFi target by mid-2027 is a critical test.

Ondo Finance: The Rapid Cross-Chain Expansion Race
Ondo has achieved the fastest expansion from institutional to retail in RWA tokenization. Starting with a government bond-focused protocol, it has now become the largest platform for tokenized public stocks.

Latest data as of January 2026:

• TVL: $1.93 billion
• Tokenized stocks: over $400 million, accounting for 53% of the market
• USDY holdings on Solana: approximately $176 million

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

Latest developments
On January 8, 2026, Ondo launched 98 new tokenized assets covering stocks and ETFs in AI, EV, and thematic investments. This is not a small pilot but rapid progress.

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

Industry focus:

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

Multi-chain deployment strategy:

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

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

By establishing custody relationships with brokers-dealers, completing Halborn security audits, and launching products on three major mainstream chains within six months, Ondo has gained a leading advantage, making it difficult for competitors to catch up. For example, its competitor Backed Finance’s tokenized asset size is only about $162 million.

However, Ondo still faces some challenges:

• Price volatility outside trading hours: Although tokens can be transferred anytime, pricing still references exchange trading hours, which may cause arbitrage spreads during US night trading.
• Regulatory compliance restrictions: Securities laws require strict KYC and certification checks, limiting the “permissionless” narrative.

Centrifuge: How Asset Managers Truly Deploy Billions
Centrifuge has become the standard infrastructure for institutional private credit tokenization. By December 2025, its TVL surged to $1.3–$1.45 billion, driven by actual deployment of institutional capital.

Major institutional deployment cases:

• Janus Henderson partnership (a global asset manager with $373 billion AUM)
• Anemoy AAACLO fund: fully on-chain AAA-rated secured loan securities (CLO)
• Using the same investment team managing its $21.4 billion AAACLO ETF
• Announced expansion plans in July 2025 to add $250 million on Avalanche
• Grove capital allocation (an institutional credit protocol in Sky ecosystem)
• Committed capital reaching $1 billion
• Initial capital of $50 million
• Founding team from Deloitte, Citigroup, Block Tower Capital, and Hildene Capital Management
• Chronicle Labs oracle partnership (announced January 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 have been following oracle issues in blockchain, and Chronicle Labs’ approach is the first to meet institutional needs: providing verifiable data without sacrificing on-chain efficiency. The January 8 announcement also included a video demo showing this solution is already in practical use, not just future promise.

Centrifuge’s unique operation mode:
Unlike competitors that simply package off-chain products, Centrifuge tokenizes credit strategies directly during issuance. Its process:

• Issuers design and manage funds through 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;
• AA-rated 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 tens of billions of dollars, and Centrifuge has already achieved this. The partnership with Janus Henderson alone provides capacity for billions.

Furthermore, Centrifuge’s leadership in setting industry standards (such as co-founding the 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, the 3.8% target APY appears modest compared to the historically higher risk and return opportunities in DeFi. Attracting DeFi-native liquidity providers beyond Sky ecosystem allocations remains a challenge for Centrifuge.

Canton Network: Wall Street’s Blockchain Infrastructure
Canton is a response to Wall Street’s vision of permissioned, privacy-preserving public networks for institutional-grade blockchain.

Participating institutions: DTCC (Depository Trust & Clearing Corporation), BlackRock, Goldman Sachs, Citadel Securities.
Canton aims to handle the $3.7 quadrillion annual settlement flow processed by DTCC in 2024. Yes, this number is correct.

Canton-DTCC partnership (announced December 2025):
This cooperation is critical. It’s not just a pilot but a core commitment to building US securities settlement infrastructure. With SEC No-Action Letter approval, some DTCC-custodied US Treasuries can be natively tokenized on Canton, with a planned controlled MVP launch in the first half of 2026.

Key details:

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

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

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

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

Ecosystem partners:

1. Franklin Templeton managing $828 million in money market funds;
2. JPMorgan enabling payments and settlement via JPMCoin.

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

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

For institutions accustomed to Bloomberg terminals and dark pools, Canton’s architecture offers blockchain efficiency while avoiding exposure of trading strategies—this design is particularly rational. After all, Wall Street will never expose proprietary trading activities on a transparent public ledger. Canton’s over 300 participating institutions demonstrate its appeal within the industry. 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 delivery in the first half of 2026 reflects multi-quarter planning, whereas DeFi protocols often launch new products within weeks.

Polymesh: The Security Blockchain Network Built 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, eliminating the need for custom code.

Core features:

• Protocol-level identity verification: via licensed KYC providers;
• Embedded transfer rules: non-compliant transactions fail at consensus;
• Atomic settlement: transactions settle within 6 seconds with finality.

Production-level integrations:

• Republic (August 2025): supports private securities issuance;
• AlphaPoint: over 150 trading venues 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 operates as an independent chain, which isolates it from DeFi liquidity. To address this, an Ethereum bridge is planned for Q2 2026. Whether this will be delivered on time remains to be seen. Frankly, I underestimated the potential of this “compliance-native” architecture. For security token issuers overwhelmed by ERC-1400 complexity, Polymesh’s approach—embedding compliance directly into the protocol rather than relying on smart contracts—is more attractive.

How do these protocols divide the market?
They do not compete directly because they solve different problems:

Privacy solutions:

• Canton: Daml-based, focused on Wall Street’s counterparty relationships;
• Rayls: ZKP-based, 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 the $1.3–$1.45 billion institutional credit market, 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 people realize. Institutions do not choose the “best blockchain” but select infrastructure that addresses their specific compliance, operational, and competitive needs.

Unresolved issues:
Inter-chain liquidity fragmentation: Cross-chain bridging costs are very high, estimated at $130–$150 million annually. Due to high bridging costs, the same assets traded across different chains can have spreads of 1%-3%. 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 will be lost.
Privacy vs. transparency conflict: Institutions need confidentiality, regulators require auditability. In multi-party scenarios (issuers, investors, rating agencies, regulators, auditors), each party needs different levels of visibility. No perfect solution exists yet.
Regulatory fragmentation: The EU’s MiCA regulation applies to 27 countries; the US requires case-by-case SEC 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 asset performance may reflect false realities. While Chronicle’s asset proof framework offers some solutions, risks remain.

Path to hundreds of billions: 2026 key catalysts
2026 catalysts to watch:

• Ondo’s Solana launch (Q1 2026): test whether retail issuance can create sustainable liquidity; success indicator: over 100,000 holders, proving real demand.
• Canton’s DTCC MVP (H1 2026): validate blockchain’s feasibility in US government bond settlement; if successful, trillions of dollars could move on-chain.
• US CLARITY bill passage: provide clear regulatory framework; enable cautious institutional investors to deploy capital.
• Centrifuge’s Grove deployment: $1 billion allocation to be completed in 2026; test actual capital flow in institutional credit tokenization; if executed smoothly without credit events, it will boost asset managers’ confidence.

Market forecasts:

• 2030 target: tokenized assets reach $2–4 trillion;
• Growth demand: increase from current $19.7 billion by 50–100 times;
• Assumptions: regulatory stability, cross-chain interoperability readiness, no major institutional failures.

Industry growth projections:

• Private credit: from $2–6 billion to $150–2000 billion (small base, highest growth rate);
• Tokenized government bonds: if money market funds migrate on-chain, potential exceeds $5 trillion;
• Real estate: estimated at $3–4 trillion (depending on whether property registries adopt blockchain-compatible titles).

Hundred-billion milestone:

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

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

Why are these 5 protocols so critical?
The institutional RWA landscape in early 2026 reveals an unexpected trend: no single winner because there is no single market.
Frankly, this is exactly how infrastructure should develop.

Each protocol solves different problems:

• Rayls → Banking privacy;
• Ondo → Tokenized stock distribution;
• Centrifuge → On-chain deployment for asset managers;
• Canton → Wall Street infrastructure migration;
• Polymesh → Simplified securities compliance.

From a market size of $8.5 billion in early 2024 to $19.7 billion now, demand has surpassed mere speculation.

Core needs of institutional players:

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

The next 18 months are critical:

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

Execution takes precedence over architecture; results matter more than blueprints. This is the key at present.

Traditional finance is heading toward 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 development 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 define the industry landscape for the next decade.

2026 Key Milestones:

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

Trillions of assets are on the horizon. NFA.