Among various stories influencing the digital currency realm, tokenized real-world assets (RWAs) have caught the attention of institutions from the traditional finance scene. These assets are favored by institutions for investment opportunities and liquidity, but they also present unique challenges.

TheNewsCrypto recently spoke with Manuel Rensink, co-founder of Fathom, a DeFi liquidity management protocol on XinFin’s XDC Network, to discuss the appeal of the crypto-driven RWA ecosystem among institutions.

Rensink, who had previous experience in traditional finance before entering the DeFi space, highlighted the challenges of distributing real-world assets in the DeFi ecosystem. By collateralizing these assets and integrating them into various DeFi platforms, such as decentralized exchanges and lending protocols, the assets can reach a broader audience and increase their utility and liquidity.

Institutions are increasingly interested in the stablecoin market, with the total market capitalization of dollar-pegged stablecoins reaching $160 billion. Rensink discussed how Fathom's stablecoin, $FXD, is different from other stablecoins in terms of its mechanism and use cases, particularly in providing on-chain liquidity support and being viewed favorably by regulators.

Fathom, with over $7 million in Total Value Locked (TVL), plans to expand its asset portfolio by incorporating additional assets like gold and tokenized money market funds. These additions aim to diversify the asset mix backing $FXD and further enhance the stability and growth of the protocol.

As institutional involvement in the crypto space grows, Rensink foresees a significant shift in asset managers considering blockchain and DeFi as viable distribution channels due to the recent entry of major players like BlackRock and WisdomTree in the sector. These developments reflect the transformative potential of blockchain technology for traditional finance institutions.

Looking ahead, Rensink predicts significant growth in the RWA ecosystem in the coming years, with the potential for crypto to reach a market size of $30-35 trillion. In the near term, he aims to scale the TVL of the Fathom protocol to $100 million by the end of the year.