Just twelve months ago, the DeFi landscape looked very different from what it is now, given the sector’s total value locked slid roughly 39% since January. From the outside looking in, much of this damage was done by a steady flow of exploits, with the second quarter alone accounting for 85 incidents that resulted in losses worth $775 million.
That said, despite the overall drop, one corner of the onchain economy that has truly continued to grow is the realm of tokenized real-world assets (RWAs), a domain that reached a valuation of $34.18 billion earlier this month. Of the number, bonds and money market funds made up the bulk of the action, while tokenized equities also kept pace.
The Big Names Have Already Pivoted
The larger platforms haven’t been shy about following the money, as Aave’s institutional Horizon market (designed to let professional investors borrow stablecoins against tokenized Treasuries, credit funds and invoices), hit a record $200 million in active borrows during Q1 this year, with deposits close to $600 million.
Robinhood, meanwhile, pushed tokenized stocks toward the mainstream, with its tokenized stock DEX having crossed $3 billion in volume across a period of just two months.
The shift is one that was a long time coming because after years of yields being propped up by token emissions, real assets are finally being looked at as tangible economic avenues offering returns that are tied to something outside crypto’s own feedback loop.
Still, putting an asset onchain is only half the job and Katerina Vdovichenko, co-founder and chief business officer of intent-based finance protocol ORO, believes:
“RWA conversations still focus heavily on putting assets onchain. The harder problem is often upstream: not how to represent an asset digitally, but how to maintain a trustworthy link between that representation and the underlying asset as its state changes.”
Where AI Fits Into All of This
This is also a domain where AI has started to make an impact, even though DeFi has never really been short on products. However, where the latter has lacked is in terms of people who can comfortably use these products, especially since every lending market, bridge and vault comes with its own interface and learning curve.
AI agents have closed this gap to a large extent and the numbers are there to justify the hype. To elaborate, cumulative payments made by AI agents through the x402 protocol topped $50 million in May, a lane where ORO sits squarely in. Its AskOro AI platform turns plain-language instructions into multi-step onchain transactions, each approved with the user’s own signature. As imagined, the traction has been eye grabbing, with more than 2 million wallets having already interacted with the platform.
Over the next six odd months, DeFi’s next evolutionary chapter probably won’t be written by whoever offers the highest APY but by those entities that are able to bring real assets to people (paired with AI that makes them simple enough to actually use). Interesting times ahead!
