Over the past year, Real World Asset (RWA) protocols have seen a resurgence, with their Total Value Locked (TVL) soaring to nearly $8 billion, driven by a market preference for debt-based, high-yield investments.
Investors are increasingly shifting their focus from volatile tokenized equities to more stable, offchain yield sources, indicating a robust demand for assets that not only provide substantial returns but also minimize price risks associated with underlying assets.
This trend is predominantly evident in debt instruments, where TVL is concentrated in offerings with the highest yields, denominated in dollar values to justify the associated counterparty risks and compensate for liquidity shortfalls compared to traditional stablecoins.
This strategic pivot towards yield-generating debt positions highlights a nuanced understanding of risk and return in the evolving landscape of digital asset investments.
Source: Messari
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