Some years ago, the question of “why tokenize” was commonplace. This is no longer the case. Financial institutions have moved past proof of concept and into the harder problem – making tokenized assets genuinely useful across the full surface area of onchain capital markets: trading, clearing, settlement, risk, and the compliance boundaries that define how regulated funds actually work. Intrinsic to this work is a different question, not of the value of tokenization, but of how far tokenization actually can go.
This report is our attempt to answer that question with a clear-eyed account of the use cases for tokenized funds: where the infrastructure is today, what it can already do, and a shared vision for building together.
The thesis is straightforward: the first chapter, issuance, is largely done. The second chapter, composability, is in progress. What comes next is whether financial instruments represented as tokenized assets can securely move between blockchains, serve as collateral, settle intraday, and power stablecoin yield strategies, all while maintaining the legal and operational structures that they come with. This report addresses the key questions related to managing and ensuring composability for tokenized RWAs.
This is the purpose behind the combined solution that Centrifuge and LayerZero have built together: a hub-and-spoke architecture that allows compliance to travel with tokenized funds directly; a scalable way to realize distribution even with the known hurdles.
The next chapter of onchain capital markets will be written by those who leverage novel solutions like the one outlined in this report to expand the imagination of what tokenization can do.