Wrappers Are 78% of Tokenized Assets.

The Tokenized Asset Coalition's Industry Veteran Series publishes perspectives from experts on various topics impacting tokenized assets. Our goal is to surface the most important ideas that will drive the industry forward. None of these perspectives should ever be construed as giving investment, legal or financial advice.

A token that wraps a security still relies on manual reconciliations, T+2 settlement windows, and the multitude of intermediaries (transfer agents, paying agents, issuer agents, the central securities depository, calculation agents, custodians, and so on), all of whom take basis points along the way. With wrapper tokenization, none of that chain has been disrupted. A blockchain acts as a digital facade.

A new Pantera study counted 542 live tokenized assets across various asset classes, and 78% of them are wrappers. The token sits onchain. The actual asset, the originator, and the servicing all remain off-chain, controlled by the same intermediaries the industry once promised to disrupt.

That gap, between what tokenization looks like and what it was supposed to do, is the argument worth having right now. From JPMorgan to BlackRock, the largest institutions in finance are moving toward tokenization. The question is no longer whether public blockchains will sit underneath securities infrastructure. The question is whether they will replace the intermediary stack or simply be bolted onto its front.

Wrapping TradFi assets was the path of least resistance for tokenization platforms that wanted to tap into onchain liquidity pools for a product that already had PMF in the TradFi world: the treasury bill. From a go-to-market perspective, it worked. TVL scaled from zero to several billion dollars in a short window. But it left a conundrum:

The tokenization layer neither disrupted the intermediary stack the T-bill was originally issued on, nor created an incentive for TradFi market participants to buy onchain, at a higher price, the same asset they already had access to off-chain.

What a wrapper actually does

A token that wraps a security still relies on manual reconciliations, T+2 settlement windows, and the multitude of intermediaries (transfer agents, paying agents, issuer agents, the central securities depository, calculation agents, custodians, and so on), all of whom take basis points along the way. With wrapper tokenization, none of that chain has been disrupted. A blockchain acts as a digital facade.

The advancements in rehypothecation and 24/7 markets this approach offers are real, but they pale in comparison to the real prize: moving the existing $100T+ debt capital market natively onchain.

The original promise of putting financial infrastructure on public blockchains was always more than offering traditional finance a new distribution channel for the same products. It was that programmable, composable infrastructure could meaningfully lower costs for issuers and investors alike, by removing friction rather than adding a more fashionable layer on top of it.

That is why it makes sense to take a step back and reflect on the why of it all.

Coase, and the cost of enforcement

When I was first introduced to the writing of Ronald Coase, in 2017, my view on technology and the economy changed. In The Nature of the Firm, Coase makes the deceptively simple observation that money, intermediaries, and firms themselves exist only as a function of the transaction costs in their environment. Search costs, bargaining costs, coordination costs, and above all enforcement costs are what give rise to the institutional fabric of modern finance. The banks, custodians, registrars, transfer agents, clearinghouses, and paying agents that are taken for granted are not natural features of capital markets. They are responses to a particular cost structure that had gone unchallenged for a long time.

To be clear, blockchain applied to institutional finance does not eliminate trust. Trust, in some form, will always be required: in the issuer's ability to pay, in the protocol's continued functioning, in the legal recognition of the digital instrument. What blockchain technology does is collapse the cost of enforcement. Settlement becomes atomic. Ownership becomes verifiable. Securities become programmable. That is a structural shift, and it redraws the line between which intermediaries remain economically necessary and which become dead weight.

The question every serious tokenization project should be asking is precisely that: given that enforcement costs have collapsed, which intermediaries in the legacy chain still earn their basis points, and which no longer do?

Stablecoins ran the experiment

Stablecoins have already run this experiment for the payment leg of finance. They exposed the cash transmission system for what it is: slow, expensive, geographically siloed, operationally outdated. The roughly $46 trillion in stablecoin transaction volume processed last year was a novel technology on its path to disrupting a high-friction correspondent banking system.

The securities leg is next, and the gap is wider. Setting up a corporate bond today still takes months. In some jurisdictions, it still involves physical paper. It still passes through arrangers, paying agents, settlement agents, transfer agents, and registrars, each adding cost, latency, and operational risk. The result is a technology stack that, in 2026, in a world of self-driving cars and human-level artificial intelligence, feels like a floppy disk found in the attic.

This is the gap that onchain native issuance is built to close.

Origination, not wrapping

Guy Wuollet, General Partner at a16z crypto, put the point plainly in the firm's Big Ideas for 2026:

"Debt assets should be originated on chain, not originated off chain and tokenized."

His argument is that wrapping off-chain-originated loans offers little real benefit beyond distribution to users already onchain. The structural gains (lower servicing costs, lower back-office structuring costs, broader accessibility) come from origination itself happening natively onchain. The remaining challenges, he notes, are compliance and standardization, not technology. These are precisely the problems that builders like ourselves have spent years solving.

When debt is originated natively onchain, the cost structure collapses in a way that wrappers structurally cannot replicate. There is no separate ledger to reconcile, because the chain is the ledger. There is no transfer agent, because transfers settle onchain. Lifecycle management and asset servicing are handled by smart contracts. Investor eligibility is enforced through permissioned smart contracts at the point of transfer. What remains of the legacy stack is what genuinely earns its keep.

Why now: the case for real yield

This is not theoretical. Figure has already demonstrated the potential of the technology in the HELOC market, squeezing basis points out of a TradFi market by virtue of using a mix of blockchain technology, straightforward digitization, and legal tech.

The same logic applies, with equal force, to natively issued onchain debt. Disrupt the overhead discussed above, and plenty of basis points move back to issuers and investors rather than to intermediaries.

The timing could hardly be better. The exploits that wiped out billions in DeFi TVL over the past year made plain a structural weakness the industry has been slow to confront: a large share of DeFi yield is reflexive, generated by stacking crypto exposure on crypto exposure, restaking on staking, and lending against tokens whose value depends on the same lending markets that collateralize them. Closed loops tend to fail at their weakest link, and the industry has now seen what that failure looks like at scale.

DeFi needs real yield from real economic activity. Native onchain debt issuance, originated under regulated frameworks and backed by genuine credit exposure to operating issuers, is precisely that. It is yield produced outside the crypto cycle rather than derived from it.

Composability is what makes this work at scale. A natively issued, onchain debt instrument can be packaged into a yield-bearing token, compatible with the major onchain lending markets. Because the underlying is transparent and the cash flows are programmable, that token can command more favorable loan-to-value ratios than opaque wrapped equivalents, and serve as collateral across lending markets with risk parameters that reflect the asset's actual quality. The basis points recovered at issuance, once composed and leveraged inside DeFi's lending and structured-product layers, compound into yields several percentage points above the base for a sophisticated allocator.

Wrappers cannot keep up. They inherit the operational inefficiency and opacity of the off-chain asset they represent.

The Bottom Line

The 78% wrapper figure should be read as a warning. The industry is in danger of becoming what it set out to replace: a polite, well-dressed distribution layer for traditional finance, optimized for the comfort of incumbents. The number to watch is the ratio in Pantera's next count. If native issuance is not visibly taking share from wrappers over the next twelve months, tokenization will have settled for being a better distribution channel rather than a rebuilt stack. The basis points that move back to issuers and investors when intermediaries are removed, composed across DeFi's lending and structured-product layers, are what the next chapter of onchain capital markets will be built on. Wrappers structurally cannot deliver that. Native origination can.

Benedikt Schuppli is Co-founder of Obligate, a Swiss AML/CFT-regulated onchain capital markets infrastructure company focused on native debt issuance, settlement, and digital securities.