Tokenization of Real Assets (RWA): How Does It Work? Principles, Steps and Flagship Projects

The tokenization of real assets (RWA) is no longer a laboratory experiment: it is a global undertaking that, quietly, is rewriting the way we own a building, a government bond, or a corporate debt. The idea is simple: to represent an economic right (rent, coupon, dividend) by a token registered on a blockchain, exchangeable at any time and, above all, programmable. But behind the apparent simplicity hides a legal, technical and financial mechanism that is refined month after month.

From the real world to the blockchain: the tokenization cycle

It all starts off-chain, in the well-defined world of corporate law or real estate law. A vehicle (company, trust or SPV) acquires the asset; it bears the risk and receives the income.

In a second step, a smart contract issues digital tokens corresponding to fractions of this asset: 10,000 tokens for a house in Detroit, a single token for $100,000 of Treasury bonds. These tokens are then sold to investors, who automatically receive rents or coupons, distributed in stablecoins.

These tokens are not magic: they merely reflect an economic right whose existence, validity and flow still largely rely on off-chain infrastructures. Hence the importance of servicing, a crucial step in any RWA operation: collecting rents, paying charges, updating the annual appraisal, then pushing this data to an on-chain oracle. The shorter the information loop, the more fluid the secondary market will be.

Three RWA projects showing the diversity of the field

RealT has become the textbook example of tokenized real estate. Each property is housed in a US LLC; the ERC-20 token entitles the holder to a rent share, paid weekly in USDC: a frequency impossible with traditional real estate. Investors can keep the flow or automatically reinvest it in new properties. By 2025, more than 200 houses and residential buildings are thus “split” into tokens, with an instant resale option on the YAM for those favoring liquidity.

At the other end of the spectrum, Ondo Finance transforms US Treasury bonds into tokens called OUSG: stablecoin is deposited, and a token yielding the equivalent of a money-market fund is received, redeemable 24/7. By mid-2025, OUSG capitalization exceeds 700 million dollars, and Bank of America records more than 7 billion Treasuries “on-chain”, a sign that tokenization is no longer reserved for startups.

Between these two poles is Centrifuge: invoices or SME loans are pooled in a Tinlake pool. Investors choose the DROP tranche, safer but less profitable, or TIN, first to absorb losses but better remunerated. Each asset is minted as an NFT, then monitored daily in a public dashboard displaying value, risk and defaults.

Where is the value born?

The added value of RWAs rests on four fundamental pillars.

1. Fractionalization radically lowers the entry ticket. Owning $200 of an apartment in Chicago or $1,000 of a lot of Treasuries becomes as simple as buying a share online. Investment in assets long reserved for institutions or the ultra-rich thus becomes accessible to all.
2. Permanent liquidity changes the game: tokens representing these assets can be traded at any time, without waiting for a notary’s signature or the next valuation date of a fund. It is frictionless finance, where entry and exit are fluid by design.
3. Programmability, inherent to smart contracts, opens new perspectives. A mortgage can self-liquidate, a dividend can be redirected to a DeFi pool, a token can automatically serve as collateral: financial logic becomes codable, automated, optimized.
4. Finally, transparency is native. Every transaction, every payment is recorded on the blockchain, viewable in real-time. The audit no longer relies on a firm, but on the block explorer.

Risks and limits of the model

The main fragility remains off-chain: tenant default, vacancy, price variation, land disputes. That is why platforms often impose a conservative LTV (60% for real estate, 80% for Treasuries) and insurances against default. The other challenge is regulatory: in Europe, the MiCA regulation has introduced a status for “crypto-assets linked to assets”, a key that should accelerate the supply while requiring transparency and approval.

The RWA scales up

Numbers set the pace: from $2 billion in 2023, the value of tokenized RWAs surpassed $10 billion in summer 2025, driven by rental real estate, Treasury bonds, and more recently corporate debt. Bank of America, in an early August report, speaks of a “multi-year cycle” where institutional investors will want to put “everything yielding” on blockchain rails.

The next step? Interoperability. RWA tokens, like those of RealT or OUSG, are beginning to circulate on low-fee layer-2 networks. In Singapore, Asian stocks are tokenized to be used as collateral on Ethereum. And in DeFi, stablecoins backed by US or European Treasuries now serve as settlement currency.

These signals converge towards the same ambition: to connect traditional and decentralized finance within a fluid, automated, and broadly interoperable system.

Tokenization, the world of tomorrow?

Tokenization of real assets is no longer a mere promise; it is embedded in industrial processes, with specialized players: RealT for real estate, Ondo for US Treasury, Centrifuge for SME debt.

The challenge is no longer to prove the technology, but to standardize issuance, secure the oracle and organize liquidity. If these three conditions converge, and the 2025 trajectory seems to indicate this, the boundary between traditional finance and DeFi could quite literally become a line of code.

La Rédaction C.

The Cointribune editorial team unites its voices to address topics related to cryptocurrencies, investment, the metaverse, and NFTs, while striving to answer your questions as best as possible.