Plume co-founder and CEO Chris Yin has identified asset distribution and sustainable liquidity as two of the main challenges facing the real-world asset (RWA) tokenization sector, arguing that the industry must move beyond proving the viability of tokenized assets and focus on delivering them to users.
Speaking on the Wu Blockchain podcast, Yin discussed the development of RWA markets, including yield sources, liquidity, custody risks and regulatory compliance. He said stablecoins have already validated the broader RWA model, but believes the next stage will depend on how effectively tokenized assets reach investors and develop lasting liquidity.
Distribution Emerges as a Key RWA Challenge
Yin's assessment places distribution at the center of the next phase of RWA development. While stablecoins have demonstrated the use of tokenized representations of value, he argued that expanding the market requires more than issuing assets on blockchain networks.
Projects must also establish ways to deliver those assets to users and build sustainable liquidity around them. Without effective distribution and sufficient market liquidity, tokenized assets may struggle to reach broader investor audiences, even when the underlying assets are available onchain.
The distinction is important because tokenization changes how assets are represented and transferred, but does not automatically create demand or guarantee that holders can trade or redeem them easily.
High Yields Come With Credit and Custody Risks
Yin also cautioned against evaluating RWA products solely by their advertised yields. High-yield offerings can carry risks linked to the underlying credit exposure and custody arrangements, as well as the maturity of the assets supporting them.
Redemption restrictions are another factor investors need to consider. The terms governing when and how an asset can be redeemed may affect its practical liquidity, regardless of whether its ownership or representation has been tokenized.
His comments underscore the difference between blockchain-based transferability and the liquidity of the underlying financial asset. Tokenization alone does not remove credit exposure, eliminate custody risks or change the maturity profile of an asset.
Traditional Institutions Expected to Expand RWA Activity
Looking ahead, Yin expects more traditional financial institutions to enter the RWA market over the next two to three years. He outlined several areas that could develop as institutional participation increases, including native onchain issuance, derivatives, yield splitting and new types of investment portfolios.
Native onchain issuance would bring the creation of financial assets directly onto blockchain infrastructure. Derivatives and yield-splitting structures could introduce additional ways to structure exposure to tokenized assets, while new investment portfolios could broaden the range of products built around them.
Yin's outlook points to a market that may expand beyond the initial tokenization of existing assets. However, his comments also emphasize that distribution, liquidity, credit quality, custody arrangements, asset maturities and redemption conditions remain important considerations as the sector develops.
Writer: Victoria Hale Technology & Blockchain Writer
Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.
She prioritises clarity and accuracy when explaining technical developments to a general audience.
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The articles on Hokanews are here to keep you updated on the latest buzz in crypto, tech, and beyond—but they’re not financial advice. We’re sharing info, trends, and insights, not telling you to buy, sell, or invest. Always do your own homework before making any money moves.
Hokanews isn’t responsible for any losses, gains, or chaos that might happen if you act on what you read here. Investment decisions should come from your own research—and, ideally, guidance from a qualified financial advisor. Remember: crypto and tech move fast, info changes in a blink, and while we aim for accuracy, we can’t promise it’s 100% complete or up-to-date.
