Pantera Capital Outlines Four-Stage Tokenization Framework; 77.6% of Market Still in 'Wrapping' Phase

According to Pantera Capital's report released on May 20, the tokenization market has surpassed $300 billion but remains dominated by early-stage asset wrapping. The firm identified four evolution stages: Wrap (converting existing off-chain assets to on-chain tokens), Connect (integrating with on-chain protocols), Compose (combining tokenized assets into new financial instruments), and Originate (creating assets natively on-chain).

Currently, 77.6% of tokenized assets are at the wrapping stage—essentially digital representations of traditional financial products—with only 2.7% being true native on-chain assets. Pantera argued the market's next competitive battleground will center on composability and direct issuance, where tokenized assets function as collateral in DeFi protocols and enable entirely new financial products impossible in traditional infrastructure.