The token tidalwave

The tokenization of everything is underway. Data issues and ownership clarity remain persistent bugs.

The token tidalwave

Another of 2025's big crypto trends is the tokenization of everything. Big firms are making moves toward making tokenization a reality, bringing real‑world assets (RWAs) onchain on both the technical side — how you actually tokenize assets — and by building accessible markets for tokenized RWAs.

Right now the tokenized RWA market is worth $24 billion, according to RedStone Finance’s freshly minted H1 report — a 380 percent swell since 2022. But where things get interesting is how that number is expected to grow over the next ten years. The same report sketches an audacious horizon line: one‑tenth to nearly one‑third of the world’s financial assets could migrate on‑chain by 2034.

Also this week, underscoring that tokenized RWAs are becoming a big deal, Robinhood, J.P. Morgan, and Kraken each released new tokenized products.

One of the reasons all this is happening now is a recent change in regulatory stance toward digital assets. Tokenization has been in the works for years, but the timing now feels right. Although, as we’ll see, there are still big challenges to overcome before moving RWAs onchain can fully scale.

The RWA split screen

So far two competing narratives are emerging about the value of tokenizing real‑world assets. On one hand, something like Robinhood’s new tokenized equity platform means traditional markets (in Europe, for now) are now tradable around the clock. Robinhood’s EU platform, for example, lets a night‑owl in Berlin trade more than two hundred US stocks and ETFs — 24 hours a day, five days a week — settling instantly in dollar‑denominated blockchain receipts.

For some, this week distilled down to the moment when Wall Street went onchain and the flurry of tokenization announcements signaled a full embrace of more open and programmable finance.

At the same time, there are questions about what you are actually buying when you buy a tokenized share of something. During Robinhood’s announcement of its new tokenized equity product, the company claimed that customers could access leading companies through its tokens. OpenAI hurried out a public disclaimer, emphasizing that Robinhood’s tokenized equity conveys mere economic exposure, not the underlying shares — a semantic nuance with legal teeth.

Despite what feels like some regulatory clarity, there are still many legal complications that accompany tokenized ownership, including how to handle ownership across jurisdictions. There is also the issue of how and where to custody the real‑world assets.

The oracle problem

It's interesting that one of the biggest challenges facing tokenization is not regulatory friction or market appetite. Both seem largely in place. Instead, the obstacle is what is being called the oracle problem. In an onchain world, oracles exist to ingest data and establish a shared reality. Removing centralized structures makes agreeing on data more complex.

Tokenized portfolios do not move on a single price feed. Instead, they juggle net‑asset value calculations, auditor attestations, and illiquidity haircuts — orders of magnitude trickier than piping in spot‑crypto ticks. When creating tokenized equities, for example, and in the absence of perfect data, platforms default to synthetic wrappers, precisely what Robinhood and Kraken offer today.

But introducing synthetic wrappers brings us full circle back to some of the shortcomings of traditional finance. If we all own wrappers of real assets based only on second‑hand data, what do we really own?

The oracle problem is not just a philosophical conundrum. Exploiting data feeds to hack DeFi protocols has already proven costly, siphoning millions of dollars and highlighting real security concerns.

Threading it through the Open Money thesis

The purpose of the Open Money framework is straightforward: programmable, borderless value transfer will out‑compete creaky legacy rails.

In this spirit, tokenizing the world’s assets seems like a perfect fit. When an equity slice, a Treasury coupon, and a shipping container full of consumer goods can all talk to the same smart contract, capital becomes a composable and interactive financial toolset rewired for the internet age.

But every innovation carries its shadow. If the pipes for tokenization remain centralized — wrapped receipts rather than bearer assets, KYC fortresses instead of open gardens — then we have merely rebuilt TradFi on shinier servers. That outcome keeps value flows firmly gated, a neo‑Wall‑Street disguised by a thin layer of cryptographic paint.

The big thing to watch in the second half of 2025 is whether advances in oracle architecture and self‑custody UX can keep RWA tokens from ossifying into private enclaves.

If they can, the Open Money framework gains a foothold. If not, the tidal wave might simply carve new canals for the same old ships.

Open Money project update

I am still largely in the same phase I have been in for the last several weeks. In many ways I feel like a scientist tinkering in the lab. I hope to share a chapter soon to collect feedback on the new direction.

You can respond to this email with questions or comments. Or connect on X or BlueSky.

One of the biggest things I am working on is figuring out the optimal workflow. When I first started this project, I wrote a daily post with the idea that the post was a small chunk of the draft. Over time, I realized I was just collecting a bunch of posts without any real direction or flow. Now I am trying to find a way to make small, daily, incremental progress while also maintaining a clear narrative arc.

It is proving to be more of a struggle than I thought, mainly because I keep trying approaches that do not feel like they lead to an obvious next step.

Hopefully that changes soon.