RWA Tokenization Growth Sparks Liquidity Paradox Concerns: Tristero Research

The real-world asset (RWA) tokenization market has expanded from $85 million in 2020 to $25 billion in 2025, marking a 240-fold increase. Analysts project this sector could reach $16 trillion by 2030. Yet, Tristero Research warns of systemic risks in converting illiquid assets like real estate and commodities into tradable tokens.

"Tokenization wraps slow-moving assets in hyper-liquid shells," the report states. Office buildings and Gold bars remain bound by physical constraints, but their digital counterparts face instant trading, leverage, and liquidation. This mismatch creates volatility risks where traditional credit shocks become high-frequency market contagion.

The September 3 analysis highlights vulnerabilities in oracle reliability, collateral frameworks, and compliance systems. Structured products and synthetic RWAs compound these issues, potentially setting the stage for an on-chain subprime crisis. Trading continuous tokens backed by inherently illiquid collateral presents what researchers term a "liquidity paradox"—a frictionless market for assets that fundamentally lack liquidity.