@bansss
Stage 2: Liquidity - The Market’s Current Center of Gravity
Stage 2 marks the beginning of true financial utility: once RWAs are on-chain, they must be traded, borrowed against, hedged, and integrated into DeFi.
This is where the market is today.
Why liquidity matters
Without secondary markets, RWAs remain static positions - attractive for yield, but limited in economic significance. Liquidity transforms them into productive collateral, enabling:
• intraday trading
• on-chain money markets
• real-time NAV discovery
• automated rebalancing
• yield-curve speculation
• multi-asset strategies
Emerging liquidity engines
Pendle Finance - On-chain interest-rate markets
Pendle has built the most sophisticated yield AMM in crypto, splitting assets into principal tokens and yield tokens. This effectively imports the logic of fixed-income derivatives onto DeFi rails.
Treasury-backed assets, stables, staked assets - all now have liquid forward yield curves.
Morpho & Aave - RWA-backed lending
RWA collateral is being integrated into permissioned lending markets, allowing institutions to borrow against:
• tokenized Treasuries
• private credit claims
• short-duration funds
Morpho’s unified RWA market is a turning point: multiple issuers feed liquidity into a single borrowing venue, improving depth and pricing.
Centrifuge on Base - Unified credit marketplace
Centrifuge’s Base deployment merges RWA issuers, underwriters, and borrowers into a chain-native credit layer, showing what a scalable multi-issuer ecosystem may look like.
The state of liquidity today
• Liquidity is real, but still thin.
• Most RWA tokens remain inside permissioned pools.
• Turnover is rising but mostly concentrated in the short-duration segment (Treasuries, cash-equivalents).
• Yield derivatives (Pendle) show far more activity than spot markets.
Insight
The moment secondary markets deepen, institutional capital will flood in - because liquidity, not tokenization, is the true constraint in fixed income and private credit markets.
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