Capital is rotating out of decentralized finance and into tokenized real-world assets as investors adjust to weaker crypto market conditions. Data shows tokenized assets grew to nearly $24.8 billion in distributed value over the past month, while DeFi total value locked dropped about 25% to under $95 billion.
Major DeFi protocols have recorded double-digit declines as yield compression and market volatility reduced lending, staking, and leveraged activity. In contrast, tokenized Treasuries, private credit, and commodities continued to attract inflows, offering comparatively stable onchain returns and clearer cash flow structures.
Analysts say the divergence reflects portfolio reallocation rather than capital flight from crypto. The shift toward regulated, yield-generating instruments suggests a maturing market structure, where institutional and risk-averse participants prioritize predictable returns and legal clarity over emission-driven DeFi incentives.
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