In search of stable, scalable chains, real-world assets (RWA) have become the cornerstone of digital asset strategies. Tokenized souvenirs and private credit bring on-chain chain yields, providing much-needed stability and quickly becoming one of the strongest performing segments in cryptocurrencies.
Top crypto categories that divide market value
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However, most of this early RWA activity reflects traditional finance. The next stage of evolution requires more. Capital moves rapidly and investors want to get more profits from their assets. They are looking for cycle-independent returns, and access does not depend on intermediaries and assets that can be combined throughout the Fefi ecosystem.
An emerging example is tokenized reinsurance, bringing some of the world’s largest, liquid industries into Defi’s fund liquidity.
Reinsurance is a structured financial form that helps insurers manage large or unexpected losses. For most investors, it is inaccessible – blocked by outdated infrastructure, opaque processes and high barriers. Nevertheless, this is a $784B+ global market that generates returns from underwriting profits and investment income, with capital expected to grow to $2 over the next decade.
Let’s take a look:
- Today, $770B of capital supports $460B of property and casualty premiums.
- Within 10 years, the capital base is expected to more than double to 2 tons and write an estimated 1.2 tons premium.
- It is expected that US$740B of liquidity is expected in the market over the next decade.
New infrastructure built on-chain can be rebuilt from scratch, reinsurance from scratch and opens doors for a wider range of investors. Combining stable stocks with yields like Ethena’s Susde with token reinsurance risks, you have a structured product that earns underwriting yields in all markets, captures mortgage gains from the bull cycle, and inserts into the rest of Defi.
This shift is happening in a broader shift in how capital transfers the market. Although the traditional reinsurance market relies on private transactions and siloed systems, Web3 makes it easier to move capital faster and have higher transparency, so capital markets can enter and out of such positions more easily based on reinsurance performance. Synthesis opens the door to new integrations throughout DEFI, and together these features provide a more accessible model.
The introduction of tokenized reinsurance signals how far RWA has progressed. The focus is to shift from simply copying traditional financially on the chain to establishing new, crypto-local structured output. More broadly, RWAS is starting to unlock financial structures that are difficult, if not impossible, to implement in traditional markets. For capital allocators, Chain Reinsurance provides wider access, greater transparency and potentially more resilient returns.
As structured finance continues to intersect with Web3 infrastructure, reinsurance offers a preview of where to go for the next wave of RWA innovation: real-world markets reimagined at speed, scale and open engagement. The greater opportunity lies in connecting dispersed and traditional systems in a scalable, transparent and durable way.
