"For many institutions, [wrappers] are a practical first step because they fit familiar compliance and operating models while improving distribution and access. But they do not fully unlock what makes blockchains distinct. The biggest gains come when assets become more natively on-chain and can move, settle, and integrate more fluidly across the system."
"Tokenization is in its newspaper-on-a-website phase. The $321 billion market has proven that assets can be distributed on-chain. It has not yet produced the native financial innovations that could arise from fully on-chain assets."
Tokenization represents real-world assets as blockchain tokens, but 78% remain as wrappers, merely claims on off-chain assets. A report scored 542 tokenized assets, revealing that most projects replicate traditional assets without leveraging on-chain benefits. Major financial institutions are involved, yet the current state resembles early internet usage, where potential was not fully realized. Wrappers serve as a practical first step for compliance but do not maximize blockchain's capabilities. The market has shown asset distribution on-chain but lacks native financial innovations.
Read at Fortune
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