Fragmentation across blockchain networks is imposing a significant economic burden on the tokenized asset market, with inefficiencies leading to an estimated $600 million to $1.3 billion in annual value loss. This was the key finding of a recent report by RWA.io, a real-world asset (RWA) data provider. The report, sent to Cointelegraph, highlights that while blockchains have spurred innovation, they have also created barriers that restrict liquidity and impede the free movement of capital across networks.
The tokenized RWA market, now impacting a $1.2 trillion tokenized asset market, is behaving more like a collection of disconnected markets rather than a unified financial system. This fragmentation results in price inefficiencies and capital friction across chains. Economically equivalent assets often trade at different prices across various chains, sometimes with spreads of 1% to 3%, despite representing claims on the same underlying assets. Moving capital between these networks remains a costly and complex endeavor, with investors potentially losing 2% to 5% per transaction due to fees and slippage.
Marko Vidrih, co-founder and chief operating officer at RWA.io, emphasized that this fragmentation is the primary obstacle to the market reaching its multi-trillion-dollar potential. He draws a comparison to the EU-wide SEPA Instant mandate, which facilitates near-instantaneous value transfer across accounts, and argues that tokenized assets should offer similar frictionless movement.
Institutional investors are particularly affected by this "two-speed" market, which is split between permissioned blockchains (used for compliance-heavy applications like real-world asset tokenization) and permissionless chains (favoring retail accessibility and programmability). This divide creates silos for liquidity, governance, and settlement processes. Interoperability solutions, such as cross-chain bridges (a $332.8 million market in 2025) and Layer-0 protocols, are crucial for managing tokenized portfolios across these fragmented ecosystems. However, cross-chain bridges also introduce complexities and security risks.
The lack of interoperability creates siloed markets, limits the free flow of tokenized assets, and increases complexity for users and developers who need to navigate multiple incompatible systems. As tokenized asset markets mature, strategic adoption of interoperability infrastructure will define market leadership, with the market projected to reach $1.83 billion by 2035.
The primary advantages of asset tokenization include enhanced liquidity for traditionally illiquid assets, democratization of investment opportunities through fractional ownership, improved operational efficiency via reduced transaction costs and settlement times, and greater transparency in ownership records. By enabling fractional ownership, tokenization can eliminate illiquidity discounts, making assets more accessible and fairly priced.
To overcome the challenges of blockchain fragmentation, the industry needs to focus on creating interoperable systems that foster organic network effects and promote genuine market education. Standardizing data and unifying fragmented on-chain information are also essential for streamlining compliance and facilitating smoother communication across various jurisdictions. BBVA's Samuel Martínez noted that we are entering the era of tokenization, a change that will transform how banks offer services. Integrating the fiat and crypto ecosystems will create more efficient and secure solutions. As the tokenized asset market potentially reaches $16 trillion to $30 trillion by 2030, annual losses from fragmentation could escalate to $30 billion to $75 billion if these challenges are not addressed.
