Ethereum's Dominance in the RWA Market: Who Will Be the Next Leader?

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, is currently leading the RWA market.

• However, universal blockchains with faster and cheaper transactions, as well as RWA-specific chains designed to meet regulatory requirements, are addressing Ethereum's limitations in cost and performance. These emerging platforms are positioning themselves as next-generation infrastructure by offering outstanding 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 conducted in-depth analyses of emerging markets, highlighting the growing importance of this field.

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

Despite the increasingly fierce 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 domain. Even so, Ethereum still accounts for more than 50% of the total market activity, highlighting the solidity of its existing position.

This report examines the key factors that enable Ethereum to dominate 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 prepare 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 basis for pilot projects.

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

• A large bank's blockchain project (2016-2017 ): To support enterprise use cases, the bank developed a permissioned fork of Ethereum. The launch of a digital currency for interbank transfers indicates that Ethereum's architecture—even in its private form—can meet regulatory requirements for data protection and compliance.

• A French bank bond issuance ( in 2019: A secured bond worth 100 million euros was issued on the Ethereum public mainnet. This indicates that regulated securities can be issued and settled on public blockchains while minimizing the involvement of intermediaries.

• European Investment Bank Digital Bond ) 2021: The European Investment Bank ( EIB ) collaborated with several large banks to issue a digital bond worth 100 million euros on Ethereum. The bond is settled using the central bank digital currency ( CBDC ) issued by the French central bank, highlighting the potential of Ethereum in fully integrated capital markets.

These successful pilot cases have enhanced the credibility of Ethereum. For institutions, trust is based on validated use cases and references from other regulated participants. Ethereum's past record continues to attract attention, forming 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 a large asset management company's fund, which is currently the largest tokenized fund issued on Ethereum.

( 2.2. A 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 several platforms, which all hold a large number of tokenized funds on Ethereum. These platforms have attracted hundreds of millions of dollars by offering products based on tokenized U.S. Treasury bonds, stablecoin lending, and synthetic yield dollar tools.

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

• Another platform utilized liquidity from a certain protocol to purchase real-world government bonds valued at over $2.4 billion.

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

These examples show 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 inflows 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 take place on-chain.

Therefore, Ether 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 digital systems. In this process, institutions focus on the reliability and transparency of the system. This is where the decentralized architecture of Ethereum provides significant advantages.

Ethereum operates as a public blockchain, supported by thousands of independently running nodes around the world. The network is open to anyone, and changes are determined by participant consensus rather than centralized control. As a result, it avoids single points of failure, ensures resilience against hacking attacks 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 attractive 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 proven the feasibility 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, some Layer 2 Rollup solutions have emerged. Major upgrades, including The Merge in 2022, Dencun in 2024, and the upcoming Pectra in 2025, have brought improvements in scalability. Nevertheless, the network still fails to match 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 bring challenges. The average block generation takes 12 seconds, plus the additional confirmations required for secure settlement, finality can often take up to three minutes. In cases of network congestion, this delay may increase further—causing 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 often rise above $20. This level of uncertainty in transaction fees complicates business planning and may undermine the competitiveness of services based on Ethereum.

A certain platform has illustrated this dynamic well. 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 now faces increasing pressure to meet the demands of a more mature and performance-sensitive market.

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( 3.1. The Rise of Fast, Efficient, and Cost-effective General-purpose Blockchain

As the limitations of Ethereum become increasingly apparent, institutions are exploring alternative advantages in key performance bottlenecks such as transaction speed, fee stability, and finality time to complement Ether's general 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, tokenized assets launched on general-purpose chains are still part of a multi-chain deployment strategy dominated by Ethereum.

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

At this stage, general-purpose blockchains have just started to establish a foothold. Platforms like certain public chains, which 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 outstanding 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 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.

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) 3.2. The Emergence of RWA-Specific Blockchain

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

The reasons for a dedicated blockchain for RWAs are clear. The tokenization of real-world assets requires direct integration 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 handling. KYC and AML procedures are crucial for tokenization 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 transformation lies in fully transferring these compliance functions onto the chain. Regarding the blockchain