Investors Look to BlackRock’s Next Target: Real World Assets

Real-world asset (RWA) and adjacent tokens have soared following the approval of spot Ethereum ETFs on May 23.

Ondo Finance, an RWA protocol with nearly $450 million in total value locked (TVL), is up 13% on the day, while oracle provider Chainlink is up over 6%.

RWAs are tokenized representations of traditional assets. Common examples include tokenized bonds, real estate, and treasury bills. The tokenization of traditional financial instruments introduces fractionalization, reduces investor barriers to entry, and adds transparent and trustless verification to the legacy financial system.

Traditional finance behemoths, including BlackRock and JPMorgan, have been dipping their toes in the RWA sector, particularly through collaborations with Ondo and Chainlink.

The Depository Trust and Clearing Corporation (DTCC) recently completed an RWA pilot program with Chainlink alongside 10 industry partners, including JPMorgan, Invesco, and Franklin Templeton.

BlackRock CEO Larry Fink has also expressed the asset management firm's interest in tokenization, telling Bloomberg Television in January, “We believe the next step going forward will be the tokenization of financial assets.”

BlackRock is backing its thesis, with its onchain fund sending over $5m to Ondo Finance in the last month, per Arkham Intelligence.