Ethereum's upward momentum isn't driven by one or two institutions buying or promoting it. It's the collective choice of mainstream institutions during a transformative period, and the tipping point for this trend is approaching.
Recent strong performances from crypto-related stocks like CRCL and HOOD have prompted investors to ask crucial questions: "Where will market growth come from if the stablecoin bill passes?" "Why do assets like SBET and BMNR surge when associated with Ethereum?" "What is the relationship between RWA and Ethereum?" "Why are you so bullish on ETH regardless of short-term price movements?"
This article systematically addresses these questions from a foundational logic and long-term perspective, serving as a supplement to previous analyses.
Examining the Data
Stablecoins have exceeded market expectations, reaching a new all-time high market capitalization of $2.583 trillion. The U.S. "Genius" bill has passed Senate voting and moved to the Republican-led House stage. Former President Trump has called for stablecoin legislation to be completed before Congress's August recess. Hong Kong's "Stablecoin Ordinance" has passed and will take effect on August 1.
U.S. Treasury Secretary Janet Yellen predicts that if U.S. stablecoin legislation passes, the stablecoin market could grow to over $2 trillion in the coming years—more than ten times its current size.
Asset tokenization represents one of the fastest-growing markets alongside stablecoins. The Real-World Asset (RWA) sector has grown from $5.2 billion in 2023 to $24.3 billion today, representing a 460% increase.
Traditional financial markets boast a total capitalization exceeding $400 trillion, while the entire crypto market stands at $3.3 trillion. The stablecoin market is $0.25 trillion, and RWA totals $0.024 trillion. Industry predictions from Standard Chartered, Redstone, and RWA.xyz suggest that 10%-30% of global assets could be tokenized by 2030–2034, representing $40–120 trillion in value—a potential 1000-fold increase for RWA.
Major Institutional Players in Tokenization
BlackRock's BUIDL Fund: This tokenized dollar-pegged fund represents underlying assets (primarily U.S. Treasuries) using blockchain technology. With Assets Under Management (AUM) reaching $2.86 billion (11.7% of the RWA market), 95% of these assets are deployed on Ethereum.
Securitize: Backed by BlackRock, Jump, and Coinbase, this asset tokenization company has partnered with multiple traditional financial institutions to issue various tokenized products. Their tokenized products total $3.7 billion (15% of RWA market), with 80% deployed on Ethereum.
Franklin Templeton's BENJI Fund: This tokenized fund converts traditional assets into digital tokens, enabling fractional ownership and smart contract functionality for automated distributions. With AUM of $743 million (3% of RWA market), 59% is deployed on Stellar and 10% on Ethereum.
These initiatives represent years of infrastructure development finally reaching production-scale deployment.
Understanding Real-World Asset (RWA) Tokenization
RWA refers to the process of digitizing tangible or intangible real-world assets—such as real estate, art, bonds, stocks, and commodities—and mapping them onto blockchain as digital tokens. Broadly speaking, RWA encompasses any asset tokenization beyond native blockchain assets, where ownership rights, transfer, and settlement occur entirely on-chain.
Structural Advantages of Tokenization
Programmability - Smart Contract-Driven Innovation: Smart contracts enable automated, verifiable encoding of asset rules and conditions. Tokenized assets can embed functions like dividends, redemptions, and staking, eliminating manual processes and transforming static holdings into dynamically managed assets.
Settlement Revolution - Efficiency and Risk Reduction: Tokenization enables peer-to-peer instant settlement on blockchain, replacing traditional finance's lengthy T+2 settlement cycles. This direct transfer of ownership reduces counterparty risk and capital requirements.
Liquidity Revolution - Unlocking Traditional Finance: By fractionalizing traditionally illiquid assets like real estate and private equity into standardized tokens, tokenization enables secondary market trading. When combined with DeFi systems and 24/7 trading environments, liquidity improves dramatically.
Global Accessibility - Breaking Geographic Barriers: Blockchain's distributed nature allows global investors to access tokenized assets without complex cross-border intermediaries or local accounts, significantly expanding investor bases while reducing distribution costs. Stablecoins' global adoption demonstrates this trend, now extending to stock markets and beyond.
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What Assets Are Being Tokenized?
Private Credit - The Largest RWA Segment: Contrary to common perception, private credit represents the largest tokenized market at $14.3 billion (58.8% of RWA). Key players include Figure, Tradable, and Maple with $10.6B, $2B, and $800M in active loans respectively.
Treasuries - Institutional Starting Point: Tokenized treasury products total $7.4 billion (30% of RWA), featuring BlackRock's BUIDL, Franklin Templeton's BENJI, Superstate's USTB, and Ondo Finance's USDY. Traditional institutions are using these products to explore derivative development and DeFi integration.
Tokenized Stocks - Accelerating Adoption: Recently, exchanges Kraken and Bybit announced tokenized U.S. stocks and ETFs through xStocks, enabling 24/5 trading. While not native blockchain stocks, they enable price participation across geographic boundaries. Robinhood is building "Robinhood Chain" on Arbitrum to support decentralized asset ownership management. Coinbase has prioritized tokenized stocks, actively seeking SEC approval for blockchain-based stock trading services on its Base Layer 2 network. We may witness native blockchain stocks from these leaders this year.
Commodities - Dominated by Gold: Gold represents nearly 100% of tokenized commodities, with Paxos Gold (PAXG) leading at approximately $850 million market capitalization.
Private Equity - Exploring Ultimate Potential: Private equity represents tokenization's ultimate goal, potentially solving decades-old liquidity problems in traditional private markets.
The Stablecoin-RWA-DeFi Trinity
Stablecoins form the fundamental foundation for traditional finance's integration with blockchain, making money programmable and decentralized. They serve as the basic unit of account and value transfer for all on-chain financial assets.
RWA's current rapid development benefits from institutions exploring new compliance approaches and pushing for digital asset market structure legislation. Once stablecoin and market structure laws are established, massive assets will rapidly move on-chain, with trading, yield generation, and settlement occurring on native blockchain networks using stablecoins as the primary monetary unit.
As assets migrate on-chain, DeFi will integrate with these new assets through increasingly mature protocols, driving efficiency, automation, and compliance while enabling derivative creation and high-liquidity yield generation and distribution. This cycle may represent DeFi's most significant growth opportunity since DeFi Summer.
Case Studies: RWA and DeFi Integration
Securitize's sTokens Bridge to DeFi: The world's largest tokenized asset issuer addresses compliance considerations by allowing token holders to deposit assets into sVaults to mint DeFi-compatible sTokens, enabling integration with existing DeFi ecosystems.
- BlackRock BUIDL with Euler Protocol: Securitize's sBUIDL (a derivative of BUIDL) has integrated with Avalanche's Euler lending protocol. Holders can deposit sBUIDL to borrow other assets while continuing to earn BUIDL's daily yield.
- Apollo ACRED with Morpho Protocol: The sToken version of ACRED (sACRED) operates on Polygon PoS through Morpho, allowing holders to use sACRED as collateral to borrow USDC for automated reinvestment and yield amplification.
Ethena's USDtb Integration with BUIDL: Ethena's risk committee approved USDtb as primary backing assets when delta-neutral funding strategies hit local minima. With 90% of reserves held in BlackRock's BUIDL fund, USDtb serves dual functions: providing low-risk collateral for centralized exchange margin trading and offering compliant treasury exposure during unfavorable funding environments.
This integration has catalyzed complex DeFi yield strategies, particularly through Pendle's principal and yield token mechanisms. During periods of negative or compressed funding rates, USDtb backing provides crucial yield floor stability (typically 4-5% APY), offering predictable minimum returns essential for zero-coupon bond mechanisms and safer liquidation systems.
Traditional financial institutions are beginning with stablecoins and tokenized treasury products before exploring derivative development and compliant DeFi integration.
Ethereum: The Institutional Choice of Today
Current data shows Ethereum remains the primary blockchain for institutional asset tokenization, with $7.5 billion in tokenized value (58.41% of total). ZKsync Era, an Ethereum Layer 2, hosts $2.245 billion (17.47%), while Aptos—the leading non-Ethereum chain—hosts $540 million (approximately 4.23%).
Three fundamental reasons explain institutions' preference for Ethereum:
1. Unmatched Security: Ethereum boasts the strongest security record among all public blockchains, with a decade of operation without significant downtime. Its seamless transition from Proof-of-Work to Proof-of-Stake—often described as "changing an airplane's engines mid-flight"—demonstrated exceptional technical foundation and organizational capability that aligns with institutional谨慎原则 (prudent principles).
2. Mature DeFi Ecosystem and Superior Liquidity: Ethereum hosts the most developed DeFi ecosystem with the deepest liquidity pools and most innovative product mechanisms. Institutions can quickly integrate with mature DeFi systems and access superior liquidity when deploying on Ethereum.
3. Maximum Decentralization and Global Reach: Ethereum's high decentralization makes it the interest balance center for large institutions and global investors. Just as stablecoins enable decentralized global dollar access beyond political boundaries, tokenized assets on Ethereum allow global participation in previously restricted markets like U.S. equities. Major sovereign institutions prefer a neutral, decentralized blockchain rather than one controlled by any single nation.
The Etherealize Perspective
Ethereum Foundation has undergone significant functional specialization, restructuring into three major business groups while spinning off specific functions to external organizations. Etherealize emerged as Ethereum's "institutional marketing and product pillar," focused on traditional finance and Wall Street对接 to accelerate institutional adoption.
Etherealize argues ETH shouldn't be evaluated as a tech stock but as a new asset category: "digital oil" that powers, secures, and serves as reserve for the internet's new financial system.
"Traditional finance is at the beginning of a structural transition from analog infrastructure to digital-native architecture. Ethereum is positioned to become the foundational software layer—similar to an operating system like Microsoft Windows—upon which the global new financial system will be built."
When this materializes, ETH will become the foundational asset of a comprehensive global platform encompassing finance, tokenization, identity, computing, AI, and more. This inherent complexity makes ETH harder to define compared to simpler stores of value like Bitcoin—but also makes it strategically more valuable with greater long-term potential.
ETH functions as: computational fuel; yield-bearing store of value; primitive settlement collateral; deflationary asset; representation of tokenized economic growth; reserve trading pair; and strategic reserve asset.
Thus, ETH cannot be accurately valued through discounted cash flow analysis. Instead, it must be viewed through strategic value storage and utility-driven scarcity. ETH powers the digital economy, secures it, captures value from its growth, and possesses inherent scarcity due to its supply dynamics and issuance cap. As the global economy transitions to tokenized infrastructure, ETH will become indispensable—not just as fuel but as the native asset of the future financial system's monetary and settlement layer.
Why Has ETH Lagged Behind BTC?
The answer is simple: Bitcoin's narrative has been accepted by institutions, while Ethereum's has not yet been fully embraced. Ethereum's value proposition is more difficult to define—not because it's weaker, but because it's broader. Bitcoin is a single-purpose store of value, while Ethereum is a programmable foundation supporting an entire tokenized economy.
The process of accelerating ETH's repricing is underway:
- Demand Surge: Institutional-level adoption and deployment of tokenized assets and financial infrastructure on Ethereum has begun at scale, as demonstrated throughout this article.
- Native Crypto Yield Demand Acceleration: As institutions build on Ethereum, staking for ETH ETFs becomes inevitable. The emergence of institutional physical creation/redemption models will significantly increase interest in ETH staking yields.
- Strategic ETH Accumulation: Competition is brewing within the Ethereum ecosystem to accumulate ETH as a monetary premium store of value. Recent examples include Bitmine Immersion Technologies raising $250 million to launch an ETH treasury strategy, driving its stock price from $4 to $74 (1800%+ increase) in two days.
- ETH as Institutional Treasury Asset: ETH's unique characteristics—primitive collateral, neutrality, yield generation, and global utility—make it the preferred treasury reserve asset for institutions worldwide.
In summary, while Ethereum may not be institutions' only long-term blockchain choice, it currently represents the optimal solution for large-scale asset tokenization. Based on data, case studies, foundational logic, and recent developments, Ethereum's renewed importance appears imminent.
Frequently Asked Questions
What makes Ethereum more suitable for institutions than other blockchains?
Ethereum offers superior security with a decade of uninterrupted operation, the most mature DeFi ecosystem with deepest liquidity, and maximum decentralization that serves as a neutral ground for global institutions. These characteristics align with institutional requirements for security, liquidity, and geopolitical neutrality.
How does tokenization actually benefit traditional finance?
Tokenization enables fractional ownership of previously illiquid assets, 24/7 global trading, automated compliance through programmable smart contracts, and instantaneous settlement that reduces counterparty risk. These efficiencies ultimately lower costs, increase accessibility, and create new financial products impossible in traditional systems.
What role do stablecoins play in the tokenization ecosystem?
Stablecoins serve as the fundamental monetary unit for on-chain finance, providing price-stable settlement assets that enable trading, lending, and borrowing of tokenized real-world assets. Their programmability allows for automated financial operations while maintaining stable value reference to traditional currencies.
Are tokenized assets compliant with existing regulations?
Leading tokenization platforms work closely with regulators to ensure compliance. Most tokenized securities incorporate transfer restrictions, investor accreditation checks, and other regulatory requirements directly into their smart contracts, often exceeding traditional compliance capabilities through programmable enforcement.
How does Ethereum's proof-of-stake consensus benefit institutional participants?
Proof-of-stake enables institutional participants to earn yield through staking while participating in network security. This native yield generation represents a fundamental advantage over proof-of-work systems, providing additional revenue streams alongside asset appreciation potential.
What prevents other blockchains from capturing Ethereum's institutional market share?
While other chains have technical merits, Ethereum's combination of network effects, developer ecosystem, institutional confidence, and decentralized security creates significant competitive advantages. Migration costs, liquidity fragmentation, and established integration patterns create switching barriers that reinforce Ethereum's position.