Web3 and RWA Failed to Democratize Finance — Institutions Took Over
RWA tokenization promised to bring mainstream adoption to blockchain by democratizing access to real estate, art, commodities and private credit. As of early 2026 the RWA tokenization market reached roughly $34 billion (up from $24B in mid-2025), driven mainly by private credit and tokenized Treasuries, but still tiny relative to global markets (e.g., $300T real estate). Stablecoins constitute the bulk of reported on-chain figures, liquidity and secondary trading remain limited, and regulation is unsettled. Institutional players — BlackRock (via BUIDL integration with UniswapX) and Apollo (ACRED tokenized private credit via Securitize) — are deploying capital into tokenized products, but access is gated to qualified investors and market makers rather than retail. The article argues Web3 and RWA have largely failed their democratizing mission, enriching opportunists while retail investors suffered large losses in prior cycles (citing $2T lost in the 2022 crash and major security breaches). Key statistics and themes: $34B RWA market (early 2026), projections of up to $30T by 2030s rely on optimistic legal and liquidity improvements, BFSI captured ~23% of Web3 market share in 2023. The piece warns a renewed hype cycle is under way — “institutional adoption” narratives — but suggests this will reproduce the same capture dynamics, with short-term profit incentives outweighing genuine financial inclusion.
Bearish
This article signals increased institutional capture of RWA tokenization and a persistent shortfall in retail adoption, liquidity, and regulatory clarity. For traders, that implies RWA-related tokens and infrastructure coins may face muted demand from retail and higher concentration in fewer institutional hands — a setup that increases counterparty and liquidity risk. Historical parallels: after the 2020–22 crypto boom, institutional re-entry post-crash tended to centralize flows (reducing broad retail volume) and briefly support prices for infrastructure assets while increasing systemic concentration — often followed by volatility when regulatory or liquidity concerns surface. Short-term impact: heightened headline-driven volatility and selective rallies in tokens tied to institutional partners or indexed RWA products, but limited broad market upside. Long-term impact: if institutions truly scale tokenized products with clearer legal frameworks and improved secondary markets, select on-chain RWA infrastructure tokens could appreciate steadily; however, absent regulatory progress and retail participation, the market is likely to remain niche and vulnerable to liquidity shocks. Overall, risks to market stability are elevated due to concentrated holdings, gated access, and unresolved legal frameworks, making this development net bearish for broad crypto market sentiment and risky for retail-focused RWA plays.