According to DefiLlama data, as reported by DeepFlow TechFlow on December 29th, RWA protocols have surpassed DEXs to become the fifth largest category in decentralized finance (DeFi) by total value locked (TVL). RWA protocols currently have approximately $17 billion locked, a significant increase from approximately $12 billion in the fourth quarter of 2024. Vincent Liu, Chief Investment Officer of Kronos Research, stated that RWA's growth is primarily driven by "balance sheet incentives rather than experimental demand." Higher interest rates have made tokenized government bonds and private credit high-yield on-chain assets, while improved regulatory environments have lowered the entry barrier for institutional investors.