How private credit tokenization is leading the race in tokenization

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Every traditional asset will eventually be tokenized.

Here’s BlackRock CEO Larry Fink making the case in his latest 2025 investor letter:

“Every stock, every bond, every fund — every asset — can be tokenized. If they are, it will revolutionize investing. Markets wouldn’t need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.”

Which asset is winning that race? It’s private credit, with about $12.9 billion onchain, as of today. For context, tokenized T-bills are currently $6.2 billion, commodities are $1.4 billion, and equities are $484 million.

Source: RWA.xyz

Private credit markets involve businesses borrowing from institutional lenders like private equity funds and asset managers, rather than banks.

It’s a booming ~$2 trillion market globally today, with potential growth to $3 trillion by 2028, by Moody’s estimates.

Now, here are the problems:

Lender access to traditional private credit is limited — only accredited investors get to participate (due to regulatory laws).
Traditional private credit is illiquid and not easily tradable. Due to its private lender-borrower relationship structure, the asset class lacks a public market where loan values can be easily benchmarked. This lack of standardized pricing, along with its multi-year maturity, is why private credit yields are typically higher (8-12%) so as to compensate for that risk.

These problems — inaccessibility, illiquidity and non-transparency — are ameliorated by blockchains to an extent.

It’s a $2 trillion market for the taking, and crypto companies are seizing the opportunity.

A snapshot of DeFi onchain credit

Each company’s model varies, but the idea is generally the same.

Offchain loan originators offer loans to lenders issued as an ERC-20 token or ERC-721 non-fungible token governed by smart contracts. Lenders deposit stablecoins or crypto asset collateral, entitling them to the token which represents a legal claim on future interest payments.

DeFi private credit is dominated today by Figure, with about $9.9b in active loans today.

Source: RWA.xyz

Figure tokenizes its private credit assets on Provenance, an L1 blockchain built with the Cosmos SDK. While the chain is publicly usable, smart contracts require governance approval, presumably to limit the chain’s use for RWA tokenization. The majority of Figure’s loans are “Home Equity Lines of Credit” (HELOC) — revolving credit products offered to everyday homeowners. For a deep dive on Provenance, see Marc-Thomas Arjoon’s Blockworks Research report.

Tradable, on the other hand, has tokenized $1.8 billion in more than 30 institutional-grade private credit positions on the ZKsync L2 chain. Tokenized assets on Tradable vary from fintech senior secured loans and legal receivables to music royalties.

Maple Finance is another prominent player in the onchain private credit space. Maple uses a pooled model where pools are overseen by “pool delegates” who determine creditworthiness and loan terms. Its Syrup platform is one of the few DeFi opportunities where retail investors can access yields from the private credit market.

Private credit assets are still largely perceived as securities. For that reason, most of the aforementioned platforms still largely employ geofences and KYC/AML restrictions that exclude the average retail investor from participation.

Yet, onchain private credit can still benefit from liquidity and transparency improvements by offering real-time visibility and verification.

In a recent report, Keyrock estimates a gradual growth of onchain private credit to $15-17.5 billion by 2026.

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