Pantera Capital said the $321 billion tokenization market remains early in its development, assigning an average score of 2.04 out of 5 on its on-chain maturity index and finding that 77.6% of 542 assessed assets function primarily as digital wrappers around traditional financial infrastructure.

Market Movement

The firm’s latest assessment depicts a sector expanding in size but not yet in sophistication. Pantera reported that tracked tokenized value rose roughly 60% to $320.6 billion from $200.6 billion in 2024, a pace that underscores growing issuance and investor interest. Yet the composition of that growth points to limited transformation in how most instruments operate once represented on-chain. New tokenized asset launches climbed 115% in 2025, but the report said the bulk continued to replicate legacy structures rather than embrace features such as continuous settlement or composability that native digital assets typically enable.

Pantera evaluated 542 live tokenized assets across 11 categories using its Tokenization Progress Index (TPI), which grades issuance, transferability, and composability on a five-point scale. On this measure, the composite average reached 2.04, with 11.1% of assets qualifying as hybrid and just 2.7% achieving native status. The firm characterized the sector as stuck in a “newspaper-on-a-website” phase—assets are present on public ledgers, but most do not yet take advantage of programmable, interoperable design that could alter market plumbing or trading dynamics.

Issuance practices were the weakest link. Pantera’s issuance sub-score came in at 1.82 out of 5, reflecting that 91.1% of assets still depend on gated minting processes and custodian-mediated exits. Only 13 products were identified with autonomous mint-and-burn functionality, a sign that permissionless creation and redemption—key to continuous liquidity and efficient market-making—remain the exception rather than the rule. The firm summarized the picture as a market “getting wider, not deeper,” where more products exist but infrastructure maturity and composability have not kept pace.

Key Drivers

Stablecoins continue to anchor tokenization’s scale and usage. According to Pantera, stablecoins accounted for $293 billion, or 91.6% of total tracked value, and posted an average TPI of 2.67. In the firm’s view, they remain the only category that pairs meaningful real-world transaction volumes with measurable on-chain utility, supporting everything from trading pairs to settlement rails across crypto markets.

Beyond stablecoins, private credit stands out for on-chain activity. Pantera highlighted private credit as the leading non-stablecoin category for decentralized finance penetration, with 21.4% of its value already active on-chain. Actively-managed strategies followed at 19.6%. These figures indicate that, among tokenized instruments tied to traditional assets, segments with recurring cash flows or programmatic distribution models are taking comparatively larger steps toward integration with DeFi protocols.

Tokenized U.S. Treasuries have grown into a notable submarket as well, surpassing $15 billion through products offered by BlackRock, Franklin Templeton, and Fidelity Investments. Even so, Pantera observed that these instruments still rely on off-chain ledger structures, limiting the degree to which they can participate in fully composable, on-chain financial workflows. The result is significant nominal growth without a corresponding jump in the kinds of automated settlement and interoperability that could reshape treasury trading and collateral management within crypto-native venues.

Investor Reaction

Capital concentration remains evident. Excluding stablecoins, the top five platforms—among them Securitize, Maple Finance, and Ondo Finance—hold roughly half of all scored assets. That footprint suggests market participants continue to cluster around a handful of issuance and distribution venues as they navigate legal, operational, and liquidity considerations in a still-forming ecosystem.

Public blockchain environments appear to be gaining the upper hand over closed networks in Pantera’s scoring. The report noted that public chains such as Optimism and Base outscored permissioned networks like Canton, which averaged 1.75 on the TPI. Even so, only 12% of the assets reviewed met Pantera’s threshold for meaningful DeFi composability, underscoring how limited interoperability continues to shape trading flows and the availability of on-chain collateral across protocols.

Taken together, these findings point to an investor base increasingly comfortable with token-based representations of familiar instruments, particularly cash-like assets and high-quality collateral, while remaining cautious about fully embracing the mechanics that enable continuous, permissionless market activity. The persistence of gated issuance and custodian-mediated off-ramps reflects that most flows still pass through architectures designed around traditional counterparties and controls.

Broader Impact

Pantera’s framing emphasizes that the core challenge is no longer whether assets can be placed on a blockchain but whether doing so changes their economic and operational behavior. As the firm put it, the industry has shown that on-chain representation is possible, yet it has not demonstrated that representation fundamentally alters how the assets function. In this context, the metrics that matter most to market structure—settlement speed, transfer costs, trading activity, and the amount of capital actively deployed in DeFi—are set to become the yardsticks for the next phase of development.

Looking ahead, progress will likely be measured less by assets under management and more by the degree to which tokenized instruments gain native capabilities. Issuers that evolve beyond wrappers and move toward composable, on-chain native designs are positioned to shape the sector’s credibility through 2026. If issuance models open up, autonomous lifecycle management expands, and assets interoperate more seamlessly across protocols, the market’s depth could begin to match its growing breadth.

For now, Pantera’s snapshot captures a market at an inflection point. The headline figures—rapid growth in tracked value and a surge in new launches—reflect strong momentum. Yet the low composite TPI score, the dominance of wrapper-style products, and the limited share of assets reaching meaningful composability all point to a transitional stage. Stablecoins supply liquidity and usage, private credit shows promising DeFi engagement, and tokenized Treasuries underscore institutional interest, but most instruments still mirror off-chain processes. The path forward, in Pantera’s view, runs through utility: faster settlement, lower friction, livelier trading, and deeper integration with decentralized financial infrastructure.