Since RWA, such as mortgages, private equity investments and illiquid funds, have not been historically represented on-chain, TVL primarily focused on the value of digital assets deposited within DeFi protocols. However, as blockchain technology adoption by traditional financial institutions progresses, the inclusion of RWA, measured within the TVL framework, becomes increasingly relevant and necessary. This is a natural progression in line with the continued development of the DeFi ecosystem, which is coming to embrace tokenized RWAs as part of TVL. Moreover, as DeFi platforms attract institutions and large-scale investors (which are vital for scaling), it becomes increasingly attractive to offer the ability to trade tokenized bonds, equity, debt and other assets such as gold, real estate and art.
