The special power dynamics of the RWA ecosystem: How the five major agreements control the flow of capital in trillion-dollar institutions

In the institutional-level tokenized asset (RWA) market, there exists a subtle and special power dynamic. It is not the absolute dominance of a single protocol, but rather five core infrastructure players, each with their own strengths, occupying different positions and exerting influence based on institutional needs. The formation of this power structure marks a critical turning point in the migration of traditional finance onto the blockchain.

Over the past six months, the development of institutional RWA tokenization has exceeded expectations. The market size has approached $20 billion, jumping from the $6-8 billion range at the start of 2024 to $19.7 billion at the beginning of 2026. This is not market hype; genuine institutional capital is being deployed on-chain, flowing into these protocols, and managed by these infrastructures.

New Flows of Institutional Capital: From Margins to the Center

According to the market snapshot provided by rwa.xyz in early January 2026, the internal structure of the RWA market is worth noting:

• Government bonds and money market funds: approximately $8-9 billion, accounting for 45%-50%
• Private credit: $2-6 billion, the fastest-growing segment, representing 20%-30%
• Public equities: over $400 million, rapidly growing, mainly driven by Ondo Finance

Behind this growth are three powerful drivers: first, the appeal of yield arbitrage. Tokenized government bond products offer 4%-6% returns, with 24/7 access. Compared to traditional markets’ T+2 settlement cycle, this makes economic sense for institutional finance managers managing billions in idle capital. Second, the gradual improvement of regulatory frameworks. The EU’s Markets in Crypto-Assets Regulation (MiCA) has been enforced in 27 countries, and the US SEC’s “ProjectCrypto” is pushing on-chain securities frameworks. No-Action Letters enable institutions like DTCC to tokenize assets. Lastly, the maturity of technical infrastructure. Chronicle Labs has handled over $20 billion in oracle demands, and Halborn has completed security audits for major protocols.

The Special Power Relationships of the Top Five Protocols: A Differentiated Ecosystem

These five protocols—Rayls Labs, Ondo Finance, Centrifuge, Canton Network, and Polymesh—are not competitors but form a unique ecosystem of power. Each is designed around core institutional pain points rather than chasing the same customer base.

Rayls Labs: Privacy Power Reimagined for Banking

Developed by Brazilian fintech Parfin, supported by FrameworkVentures, ParaFi Capital, Valor Capital, and Alexia Ventures, Rayls positions itself as a compliant-first bridge connecting banks and DeFi. Its architecture is a public permissioned EVM-compatible L1 blockchain designed specifically for regulators.

At its core is the Enygma privacy tech stack. Zero-knowledge proofs ensure transaction confidentiality, homomorphic encryption supports computations on encrypted data, and programmable compliance allows selective data disclosure to designated auditors. Practical applications include Brazil’s central bank CBDC cross-border settlement pilot, Núclea’s regulated receivables tokenization, and private payment settlement workflows for several undisclosed clients.

By early January 2026, Rayls completed a security audit by Halborn, providing essential certification for its institutional infrastructure. More importantly, the AmFi alliance plans to reach $1 billion in tokenized assets on Rayls by June 2027. AmFi is Brazil’s largest private credit tokenization platform, promising immediate transaction volume and setting an 18-month milestone. This is one of the largest institutional RWA commitments in any blockchain ecosystem to date.

Ondo Finance: Retail Expansion Power for Tokenized Stocks

Ondo has achieved the fastest expansion from institutional to retail. By January 2026, its TVL reached $1.93 billion, with over $400 million in tokenized stocks, representing 53% of the tokenized stock market. On Solana, USDY holdings are about $176 million.

Recently, Ondo launched 98 new tokenized assets, including stocks and ETFs in AI, electric vehicles, and thematic investments. In Q1 2026, it plans to launch tokenized US stocks and ETFs on Solana, aiming to list over 1,000 tokenized assets according to its product roadmap.

An interesting phenomenon is that while token prices declined, TVL still hit $1.93 billion. This indicates growth is driven by institutional demand for government bonds and real needs for idle stablecoin yields in DeFi protocols, rather than speculation. In comparison, competitor Backed Finance’s tokenized assets are around $162 million.

Centrifuge: On-Chain Deployment Power for Asset Managers

Centrifuge has become the standard infrastructure for institutional private credit tokenization. By December 2025, its TVL surged to $1.3-$1.45 billion, entirely driven by institutional capital deployment.

Its key partnership is with Janus Henderson, a global asset manager with $373 billion AUM. The Anemoy AAACLO fund is a fully on-chain AAA-rated secured loan security, using the same investment team managing its $21.4 billion AAACLO ETF. Announced in July 2025, the expansion plan aims to add $250 million on Avalanche.

The Sky ecosystem’s institutional credit protocol Grove also committed $1 billion, with an initial capital of $50 million. The founding team includes veterans from Deloitte, Citigroup, Block Tower Capital, and Hildene Capital Management.

Recent progress includes a partnership with Chronicle Labs announced on January 8, 2026. The asset proof framework provides cryptographically verified holdings data, supporting transparent NAV calculations, custody verification, and compliance reporting, with dashboards accessible to LPs and auditors. This is the first oracle solution truly meeting institutional needs—providing verifiable data without sacrificing on-chain efficiency.

Canton Network: Wall Street’s Special Settlement Power

Canton represents a response to the permissionless DeFi paradigm at the institutional level. Participants include DTCC, BlackRock, Goldman Sachs, and Citadel Securities. Canton aims to handle the $3.7 quadrillion annual settlement flow processed by DTCC in 2024.

Collaboration with DTCC is crucial. It’s not just a pilot but a core commitment to building US securities settlement infrastructure. With SEC No-Action Letter approval, some US Treasuries, partially custodied by DTCC, can be tokenized natively on Canton. A controlled MVP is planned for H1 2026. DTCC and Euroclear serve as co-chairs of the Canton Foundation, leading governance.

On January 8, 2026, Temple Digital Group launched a private trading platform with Canton providing sub-second matching via a non-custodial central limit order book. Currently supporting crypto and stablecoin trading, plans include tokenized stocks and commodities in 2026. Ecosystem partners include Franklin Templeton’s $828 million money market fund and JPMorgan’s JPM Coin for settlement.

Canton’s privacy architecture is based on smart contract-level modeling using Daml. Contracts specify data visibility for participants, regulators can access full audit logs, counterparties see transaction details, but competitors and the public cannot see any transaction info. For institutions used to Bloomberg Terminals and dark pools, Canton offers blockchain efficiency without exposing proprietary trading activities.

Polymesh: Structural Power in Compliance Frameworks

Polymesh stands out through protocol-level compliance rather than complex smart contracts. Its key features include protocol-level identity verification, embedded transfer rules, and atomic settlement. Non-compliant transactions fail at consensus, with finality within 6 seconds.

In August 2025, Republic integrated Polymesh to support private securities issuance, with AlphaPoint covering over 150 trading venues across 35 countries. Its “compliance-native” architecture is especially attractive to securities issuers frustrated by ERC-1400 complexity. A bridge to Ethereum is planned for Q2 2026 to address DeFi liquidity fragmentation.

Market Division in the Power Structure: Ecosystem of Differentiated Needs

These five protocols form a special power structure—not zero-sum competition, but differentiated positioning based on institutional needs:

In privacy, Canton leverages Daml smart contracts focused on Wall Street counterparties; Rayls uses zero-knowledge proofs for bank-grade privacy; Polymesh offers protocol-level identity verification and one-stop compliance.

In expansion strategy, Ondo manages $1.93 billion across three chains, prioritizing liquidity speed over depth; Centrifuge focuses on $1.3-$1.45 billion institutional credit, prioritizing depth over speed.

Market segmentation is clear: Rayls targets banks/CBDCs; Ondo targets retail/DeFi; Centrifuge targets asset managers; Canton targets Wall Street; Polymesh targets securities tokens.

From $8.5 billion at the start of 2024 to $19.7 billion in 2026, demand has surpassed speculation. Institutions do not choose the “best blockchain,” but rather the infrastructure that best solves their compliance, operational, and competitive needs.

Unresolved Challenges in the Power System

Despite these five major protocols holding key positions, the market still faces structural challenges.

Cross-chain liquidity fragmentation costs an estimated $1.3-$1.5 billion annually. High bridging costs cause 1%-3% price differences for the same asset traded across chains. If unresolved by 2030, annual costs could exceed $75 billion.

The privacy vs. transparency dilemma remains unresolved. Institutions require confidentiality, regulators demand auditability. In multi-party scenarios involving issuers, investors, rating agencies, regulators, and auditors, each needs different levels of visibility.

Regulatory fragmentation is another challenge. The EU’s MiCA applies in 27 countries; in the US, approval of No-Action Letters takes months on a case-by-case basis; cross-border capital flows face jurisdictional conflicts.

Oracle risks also exist. Tokenized assets depend on off-chain data. If data providers are attacked, on-chain asset performance may reflect false realities. Chronicle’s asset proof architecture offers some solutions, but risks persist.

2026: A Critical Moment for Power Transition

The next 18 months will determine the stability of this power structure. Key catalysts include:

Ondo’s Solana launch (Q1 2026): Testing whether retail issuance can create sustainable liquidity. Success is over 100,000 holders, proving real demand.

Canton’s DTCC MVP (H1 2026): Validating blockchain’s feasibility in US government bond settlement. Success could shift trillions of dollars into on-chain infrastructure.

US CLARITY legislation passage: Providing clear regulation, enabling hesitant institutional investors to deploy capital.

Centrifuge’s Grove deployment: $1 billion allocation to be completed in 2026, testing real institutional capital for credit tokenization.

Rayls’ $1 billion AmFi target: Testing adoption of privacy infrastructure.

Market forecasts suggest tokenized assets could reach $2-4 trillion by the 2030s, requiring 50- to 100-fold growth from the current $19.7 billion. Industry analysis projects private credit from $2-6 billion to $150-200 billion (small base, high growth); government bonds, if money market funds move on-chain, could surpass $5 trillion; real estate may reach $3-4 trillion.

The milestone of hundreds of billions is expected around 2027-2028, with institutional credit at $30-40 billion, government bonds $30-40 billion, tokenized stocks $20-30 billion, real estate and commodities $10-20 billion. This requires a fivefold increase from current levels, but considering Q4 2025 institutional momentum and upcoming regulatory clarity, this goal is not out of reach.

The Essence of Power: Execution Over Architecture

The institutional RWA landscape in early 2026 reveals an unexpected trend: no single winner, because there is no single market. This is precisely the direction infrastructure should develop.

From $8.5 billion at the start of 2024 to nearly $20 billion in 2026, the formation of this special power dynamic shows that institutional tokenization has shifted from marginal experimentation to core infrastructure. Each protocol addresses different problems, forming a complementary rather than competing power system.

Execution takes precedence over architecture; results matter more than blueprints. This is the key at present. Traditional finance is in a long-term process of migrating on-chain. These five protocols provide the necessary infrastructure for institutional capital: privacy layers, compliance frameworks, and settlement infrastructure. Their success will determine the future development path of tokenization—whether as efficiency improvements to existing structures or as a completely new system replacing traditional intermediaries.

The infrastructure choices made by institutions in 2026 will define the industry landscape for the next decade. In this ecosystem of constructed special power relationships, the winners will not be a single protocol but the collective success of the entire tokenized asset ecosystem.

NFA

(Content adapted from PANews authorized report, source: Deep潮 TechFlow)