a16z Crypto: Most tokenized assets are digitized; true on-chain composability is unlocked

Mars Finance reports that a16z crypto noted that not all tokenized assets are being fully utilized on-chain. Bonds represent the largest category of tokenized assets, with a market cap of $15.2 billion, yet only about 5% of their supply is currently used in DeFi; a similar situation applies to precious metals, which, although tokenized, remain largely idle. In contrast, smaller categories show different patterns: 84% of reinsurance token supply is deployed in DeFi, and 33% of private credit tokens are in use. a16z considers this logical, as the categories with the highest DeFi adoption were originally built for DeFi—such as Nexus Mutual and Maple Finance. a16z points out that many practices currently labeled as tokenization are more accurately described as digitization—moving records onto the blockchain without unlocking additional functionality. One of the core value propositions of on-chain financial systems is composability.