Tokenized Assets Are Moving Beyond Issuance to Utility

Tokenized U.S. Treasury funds now hold roughly $16 billion in distributed value. Most of the largest traditional asset managers have issued them. Issuance is a solved problem. The harder question is what happens to one of these assets after it exists onchain, because most of them currently do very little, according to Vincent Maliepaard, VP of Marketing at Sentora.

The typical tokenized fund is held, occasionally transferred, and eventually redeemed. That improves distribution and settlement. It leaves the asset economically idle. The larger opportunity lies in financial utility: using a traditional asset inside an onchain system as collateral, as margin, or as a component of a structured position, Maliepaard wrote in a guest post.

Consider an investor holding a tokenized fund that owns $100 million of bonds. The conventional path to get cash is to redeem the fund, wait for the underlying assets to settle, receive the proceeds, and then deploy that capital elsewhere. The plumbing is faster than it would be offchain. The economics are unchanged. The investor gave up the position to access liquidity.

The alternative is to deposit the same token into a lending market as collateral and borrow stablecoins against it. The credit exposure and its yield stay with the investor. The loan provides the cash. Nothing is sold. The function of the asset changes rather than the asset itself. That shift is where tokenization begins to look like financial infrastructure rather than a faster distribution channel, Maliepaard said.

In traditional markets, an enormous amount of financial machinery exists to mobilize the value sitting inside assets rather than simply to own them. That machinery is what tokenization has the potential to make programmable.

A lending protocol cannot treat every tokenized asset as interchangeable. When ETH falls through a liquidation threshold, the protocol sells it into a market that runs continuously and whose depth is visible onchain. A tokenized credit portfolio behaves nothing like that. Its underlying bonds trade during traditional market hours. Its NAV may be struck periodically rather than continuously. Redemption can take days. DeFi liquidates in minutes while traditional credit settles in days. Wrapping the asset in a token does not close that gap. Closing it requires design work around the token rather than inside it, Maliepaard said.

The practical result is that an asset built for distribution and an asset built for collateral use should be held to quite different standards. For an issuer, the question reframes entirely. It is not whether an asset can be tokenized. It is whether an onchain financial system can safely do anything with it once it has been.

mWIN, launched in August 2026, is a useful case study because it was built against the second question from the start. Midas issues the token. Wellington Management runs the underlying credit strategy. Northern Trust holds the assets. The strategy was issued natively onchain rather than wrapped around an existing fund after the fact. The portfolio spans investment-grade CLOs and other asset-backed credit at a current yield of around 6.9%.

mWIN can be minted and redeemed daily on a T+1 basis, drawing on several competing sources of liquidity rather than relying on secondary market depth. Sentora then curates a Morpho market where mWIN backs loans in PayPal's PYUSD. It sets the parameters based on an extensive dossier of historical NAV, past market stress events, liquidity, and redemption mechanics. This combination ensures that a sensible loan-to-value limit can be set, sized so that a forced sale can complete before the collateral is worth less than the debt, according to Maliepaard.

Northern Trust, which acts as custodian for the mWIN assets, carries an Alpha Score of 51 on AlphaScala, reflecting mixed sentiment around its role in digital asset custody.

The industry currently measures tokenization by the value of assets issued onchain. That figure is easy to publish and incomplete as a signal. It counts assets that sit idle alongside assets doing real work. A more useful set of questions is already available, Maliepaard argued. How much tokenized collateral is securing loans? How much stablecoin liquidity can be raised against tokenized securities? How much collateral can move between venues without selling the underlying asset? How much of that activity settles without leaving the common infrastructure?

The market is starting to move in that direction. Figure PRIME’s growth on Morpho this year surpassed $200 million. Aave launched Horizon in August 2025 specifically to let institutions borrow stablecoins against tokenized assets. It currently has a TVL of over $250 million. More Morpho markets are being built around tokenized credit. Tokenized equities are entering the same infrastructure.

Digitizing documents did not make the internet transformative on its own. Networked documents did. Financial assets appear to be following a comparable path, moving from representation to distribution and now to utility. The eventual value of tokenization will be measured by what markets can build once these assets are genuinely usable, rather than by how many of them exist, Maliepaard wrote.