Tokenization Use Cases [P3]: New Financial Products Unlocked by On‑Chain RWA Tokenization
Tokenization is unlocking entirely new financial products. We'll dive into how smart contracts & Web3 composability enable RWA-powered stablecoins, auto-rebalancing indexes, programmable credit & more
By now, most readers following the tokenization space understand the basics: real-world assets (RWAs) can be brought on-chain to improve liquidity, transparency, and settlement speed. Once an asset or a basket of assets exists as a token, what entirely new capabilities does that unlock?
Tokenization isn’t just about liquidity—it’s laying the groundwork for entirely new financial products. Once real-world assets are on-chain, they become programmable and composable, opening the door to innovations like automated yield strategies, dynamic mortgages, and tokenized bonds that self-execute payouts.
Onyx by J.P. Morgan calls these “new capabilities…difficult or impossible to implement today,” enabled by fractionalization and tradability. McKinsey and BCG also highlight this shift, pointing to revenue-generating products like tokenized fund shares used as loan collateral or on-chain RWA indices. These aren’t just upgrades—they’re new categories of financial tools, powered by Web3.
This third piece in our series dives into those possibilities. We explore four innovation categories where tokenized RWAs are composed into novel financial products. These are not just digital replicas of legacy instruments, but genuinely new use cases enabled by smart contracts, composability, and the open architecture of Web3.
Think: real-world yield tokens that plug into DeFi, compliant structured portfolios that rebalance themselves, or stablecoins that stream daily interest from U.S. Treasuries.
These aren’t futuristic ideas – they’re happening now.
1. RWA Restaking and Yield Stacking
In traditional finance, a bond earns a yield. In crypto, a staked token earns a yield. What if you could combine the two?
RWA restaking and yield stacking refers to the ability to take a tokenized yield-bearing asset (like a Treasury-backed token), and reuse it in DeFi protocols to earn additional returns. This compounding is only possible because the asset is tokenized and interoperable.
Take BlackRock’s BUIDL fund, for example. It’s a tokenized money market fund composed of U.S. Treasuries, yielding ~5% APY. But when deposited into DeFi platforms like Aave, it can also serve as collateral, enabling lending yields or additional rewards. Investors earn the underlying Treasury interest plus protocol incentives – a structure impossible in traditional finance.
Maple Finance’s syrupUSDC goes a step further. It’s a wrapped version of USDC that earns 6-8% APY by deploying capital into Maple’s private credit pools, while still functioning like liquid USDC in DeFi.
Similarly, Zoth has introduced ZeUSD, a composable stablecoin backed by high-quality RWA tokens like ETF and Treasury assets. ZeUSD can be used across chains, restaked in DeFi, or posted as collateral, all while maintaining exposure to real-world yield.
Restaking unlocks novel capital efficiency. Retail and institutional users alike can earn multiple layers of return from a single RWA position – a DeFi-native behavior applied to traditional yield.
2. RWA-Collateralized Stablecoins and Liquidity Wrappers
Not all stablecoins are created equal. A new generation of on-chain dollar tokens are backed by real-world yield-bearing assets, offering daily interest streams and full composability in DeFi.
Mountain Protocol’s USDM, launched in September 2023, is a permissionless ERC-20 token fully backed by short-term U.S. Treasuries—and it rebases daily, streaming ~5% APY directly to holders in 2024. Unlike bank deposits or fiat-backed stablecoins, USDM doesn’t sleep: it moves through DeFi protocols while still earning real-world yield. It surged to a $150M supply post-launch and stabilized near $50M in 2025, according to RWA.xyz.
Other players are pushing the same model. Ethena’s USDtb, dubbed a “Treasury-backed stablecoin,” crossed $1.4B in supply by 2025, while MakerDAO now backs part of its DAI reserves with over $1.5B in Treasuries and corporate bonds—helping the protocol offer rates as high as 8% via its DSR vault.
Meanwhile, RealUSD (USDR) by Tangible blends TradFi yield-bearing assets into a token that maintains a $1 peg and pays out interest—blurring the line between a stablecoin and an investment fund.
Then there are liquidity wrappers—tokens like Ondo’s OUSG, which wraps a real bond fund into an ERC-20 that flows freely across DeFi. In May 2025, JPMorgan even settled an OUSG trade cross-chain using Chainlink’s CCIP—showcasing how tokenized funds might link traditional banks with on-chain markets. Other wrappers are Robinhood’s on-chain equity tokens, which let KYC’d users mint tradable ERC-20s for U.S. stocks like AAPL. These wrappers preserve the asset’s risk profile but unlock round-the-clock liquidity and collateral utility—functions impossible in legacy markets. These wrapper tokens bring off-chain liquidity on-chain, letting investors trade in and out at any time or use them as collateral (subject to whitelists)
3. Structured & Indexed RWA Pools
Tokenization shines brightest when RWAs are assembled into programmable, indexable, or tranche-based portfolios. With smart contracts, we can build structured finance products without the spreadsheets and SPVs. Building portfolios that run on code. Think credit pools, index vaults, or yield streams—assembled, sliced, and rebalanced entirely by smart contracts.
In the structured-credit lane, tokenization has made real-world securitization radically more efficient. Take BlockTower Capital’s $220M consumer loan portfolio. Using Centrifuge, the assets were minted as NFTs, bundled into senior and junior tranches, and managed on Ethereum—dropping costs from millions to just $60K in gas, while delivering a 24% return to investors by late 2024.
Those same rails now support Treasury ladders, invoice factoring, and other real-world use cases. With the core infrastructure already built, it's easier and cheaper to launch new pools using on-chain tooling. Protocols like MakerDAO and Aave Arc are already involved as lenders—Maker, for example, lends DAI into Centrifuge’s real-world asset pools, while Aave Arc offers a permissioned credit market for KYC-compliant participants. These integrations show how structured RWA tokens plug into the broader DeFi ecosystem as composable, yield-generating collateral.
Meanwhile, the index vault model is picking up steam. OpenEden’s TBILL Vault, for instance, tokenizes short-dated U.S. Treasuries into an ERC-4626 vault—earning the risk-free rate while remaining usable as DeFi collateral. Over on Index Coop, the new “REAL” Index is bundling tokens like Ondo and Maple into a single ERC-20 with revenue-sharing mechanics.
Whether you’re tranche-splitting debt or packaging yield tokens into a fund, the core idea is simple: use code to rebundle real-world cash flows into one transparent, self-executing token. These aren't just portfolio products—they're permissionless, composable money legos.
And importantly, they don’t replace the fundraising primitives like tokenized equity or debt. They sit on top, turning those building blocks into next-gen financial instruments.
4. Dynamic Compliance and Composability
A key challenge for institutional adoption of DeFi is compliance. How do you let regulated assets flow through open markets without breaking KYC/AML standards? The answer: smart contracts.
Securitize is leading the way. Its sToken Vault wraps compliant RWA assets—like BlackRock-backed BUIDL—into programmable tokens (e.g., sBUIDL) that only move between verified wallets. But here’s the twist: these tokens aren’t stuck in a walled garden. They still plug into protocols like Euler and Morpho, letting holders borrow stablecoins while keeping exposure to real-world yield—compliance and composability in one package.
Then there’s Plume Network, a modular L2 built specifically for tokenized RWAs. Plume uses the ERC-3643 standard to enforce compliance directly at the token level—integrating features like KYC/KYB verification, transfer restrictions, and jurisdictional filtering. These permissions are enforced on-chain, making Plume's RWA tokens usable only by eligible wallets, yet fully composable across DeFi.
Crucially, Plume’s architecture also supports composability: these compliant assets can plug into lending, AMMs, or structured vaults across EVM chains. Builders can use Plume-issued RWAs for things like yield stacking, DeFi leverage, or structured product creation—without violating regulatory boundaries.
(If you wonder, besides ERC20 and ERC721, what other popular token standards are used and purpose-built for RWA tokenization, this blog is for you: Token Standards for RWA Tokenization. ERC-3643 is one of them)
This is what we mean by dynamic compliance—rules that live in smart contracts, not in PDFs, not on spreadsheets. A token can self-enforce transfer restrictions, lock-up periods, or regional blocks in real time—without middlemen or clearing houses.
Best of all? It doesn’t kill composability. These assets still talk to the rest of DeFi, making regulated RWAs as interoperable as any crypto token. That's something traditional finance just can’t match.
Final Thoughts: From Replication to Reinvention
Tokenizing RWAs doesn’t stop at digitizing bonds or shares. It opens up new frontiers in product design. Today’s innovators aren’t just moving Wall Street on-chain – they’re rebuilding the toolbox.
The rise of programmable structured portfolios, DeFi-compatible yield tokens, and compliant composability points toward a financial system that’s more flexible, inclusive, and 24/7. Investors from anywhere in the world can access sovereign debt, private credit, or real estate portfolios with a few clicks, while institutions gain modular tools for liquidity and risk management.
As infrastructure matures and regulation evolves, expect these experiments to go mainstream. Tokenized finance isn’t just translating the past – it’s inventing the future.
Disclaimer: This content is for informational and research purposes only. DYOR!
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