Pantera: $321B Tokenization Market Stuck in ‘Wrapper’ Phase

Pantera Capital evaluated 542 live tokenized assets across 11 categories in its State of Tokenization Q1 2026 report and gave the market a composite Tokenization Progress Index score of 2.04 out of 5. The index measures issuance, transferability and composability.

The firm found that 77.6% of scored assets function as digital wrappers around traditional financial infrastructure. Eleven percent qualified as hybrid and 2.7% met Pantera’s definition of native on-chain assets. The report uses the phrase “newspaper-on-a-website” to describe tokenization where blockchain representation has not produced programmable features.

Issuance received the lowest component score, averaging 1.82 out of 5. Pantera recorded that 91.1% of assets depend on gated minting and custodian-mediated exits. Only 13 products offered autonomous mint-and-burn functions.

New tokenized asset launches increased 115% in 2025, but the report notes most new offerings replicated legacy structures rather than enabling continuous settlement or composability. Tracked value rose about 60%, to $320.6 billion from $200.6 billion in 2024.

Stablecoins accounted for $293 billion, or 91.6% of tracked value, and posted an average TPI of 2.67. Outside stablecoins, private credit had the highest share of value active on-chain at 21.4%, followed by actively managed strategies at 19.6%.

Tokenized U.S. Treasuries topped $15 billion through products offered by BlackRock, Franklin Templeton and Fidelity, but those offerings still rely on off-chain ledger structures, the report shows.

Platform concentration is high when excluding stablecoins: about half of scored assets sit on five platforms including Securitize, Maple Finance and Ondo Finance. Public blockchains such as Optimism and Base scored higher on the TPI than permissioned networks; Canton averaged 1.75. Overall, 12% of assets met Pantera’s threshold for meaningful DeFi composability.

The report states: “The industry has successfully proven that assets can be represented on-chain, but it has not yet proven that on-chain representation fundamentally changes how those assets function.”

Pantera identifies next-phase measures of utility to watch: settlement speed, transfer costs, trading activity and the amount of capital actively deployed in decentralized finance. The report recommends issuers move beyond wrapper structures to on-chain native instruments to increase composability and on-chain utility through 2026.