Blockchain Fragmentation Causes Billions in Lost Value, Study Finds
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Key Points: Blockchain fragmentation leads to up to $1.3B annual value loss. 52% of RWA are on Ethereum. Data from RWAio highlights interoperability issues. RWAio’s study reveals blockchain fragmentation results in up to $1.3 billion annual losses in the RWA market, impacting $36 billion in tokenized assets globally. The fragmentation issue hinders market scalability, with potential losses climbing to $75 billion by 2030 if tokenization trends continue to rise. Blockchain Fragmentation Costs Up to $1.3B Annually RWAio’s recent study uncovers that fragmentation across blockchain networks results in significant value loss in the RWA market annually. The market currently has over $36 billion in circulation including assets like private credit and U.S. Treasury bonds. Ethereum holds a dominant 52% share of these assets. Fragmentation leads to price discrepancies of 1% to 3% for the same asset across different blockchains. Asset transfers incur losses of 2% to 5% due to fees and slippage. Future predictions indicate that as tokenized markets may grow to as much as $30 trillion by 2030, annual losses could reach up to $75 billion. Industry leaders express concern over the lack of interoperability as a key obstacle. Marko Vidrih, COO of RWAio, noted, “This fragmentation is the single greatest impediment to the market realizing its multi-trillion-dollar potential. In traditional finance, the EU-wide SEPA Instant mandate shows how value can move across accounts in seconds. Tokenized assets should be just as frictionless. Achieving that requires both bottom-up protocol standardisation and top-down coordination from institutions and regulators. Without true interoperability, the industry cannot scale.” The need for coherent standards is pressing across the sector. Ethereum Dominates, But Faces Interoperability Challenges Did you know? The RWA market has expanded over 2,000% since 2020, highlighting both potential and challenges reminiscent of historical fragmentation issues in blockchain development. Ethereum (ETH) is trading at…
