Ethereum’s RWA Surge: Why Tokenization Is Redefining Finance

Ethereum continues to solidify its position as the leading blockchain for real-world asset (RWA) tokenization, capturing 56% of the market, and rising to over 77% when layer-2 networks are included. This dominance is underscored by recent developments, including the launch of tokenized U.S. stocks and exchange-traded funds (ETFs) by Ondo Finance, which has integrated Chainlink’s oracle services for data verification. The platform, now live on Ethereum for non-U.S. investors, exemplifies how traditional financial instruments are increasingly being integrated into blockchain ecosystems.

The onchain value of tokenized RWA reached a record high of $27.8 billion in mid-2025, up 223% from the beginning of the year. This growth is primarily driven by tokenized private credit and U.S. Treasury debt, reflecting Wall Street's growing appetite for tokenized assets. The U.S. Federal Reserve's announcement of a conference on tokenization in October 2025 further highlights the increasing institutional interest in RWA tokenization. The event is expected to bring together industry leaders to discuss innovations at the intersection of traditional and decentralized finance, stablecoin developments, and the role of artificial intelligence in payments.

A key driver of RWA adoption is the ability to tokenize digital-native, revenue-generating assets such as AI servers. A recent pilot project by Aurora Optoelectronics in China demonstrated this shift, marking the first tokenization of AI servers in the country. Unlike earlier tokenization efforts focused on physical assets like solar farms or property, AI servers generate measurable data such as uptime and utilization, reducing the need for third-party verification. This development is expected to expand the scope of RWA tokenization into capital-intensive, high-demand sectors, including cloud computing and AI infrastructure.

From a financial standpoint, tokenizing assets such as AI servers offers businesses several advantages, including faster fundraising cycles, lower financing costs, and increased liquidity. For instance, tokenized AI server projects in China have seen interest rates drop from 15% to below 8%, potentially saving millions annually in interest payments. Additionally, tokenization enables fractional ownership, making it possible for retail investors to access previously unattainable asset classes. This democratization of investment access is a key factor in RWA tokenization’s explosive growth in 2025.

Blockchain infrastructure is also evolving to support a broader range of RWA use cases. Enhanced cross-chain interoperability, improved regulatory clarity in regions such as the UAE, Singapore, and the European Union, and the adoption of layer-3 and zero-knowledge (ZK) solutions are enabling faster, more secure, and privacy-preserving transactions. These advancements are critical for institutional adoption, as they address concerns around compliance, transparency, and performance. Furthermore, the integration of RWA tokens into decentralized finance (DeFi) platforms is enabling new financial instruments such as yield-generating tokens and tokenized bonds, broadening their appeal across both retail and institutional markets.

The growing acceptance of RWA tokenization is also evident in the expansion of use cases, ranging from real estate and infrastructure to art and farmland. These assets are being tokenized to provide investors with liquidity, transparency, and diversified returns. The trend is further supported by favorable regulatory developments and increased participation from traditional financial institutions, many of which are exploring tokenized bonds and other digital securities. As the ecosystem matures, RWA tokenization is increasingly viewed not just as an alternative to traditional finance but as a complementary framework that enhances efficiency and inclusivity.