Talking Tokenization: How The Future of Credit Markets Come Onchain

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As the tokenized equities market heats up, new emerging assets are going to come to market in the near future as issuers look to attract investors, Mary Gooneratne, cofounder of Loopscale shared on Talking Tokens.

Categories like securities lending or RWA looping are “starting to bring us toward the institutional side, while still appealing to mass market retail,” Gooneratne said. “We talk with companies like Superstate or Securitize that are pushing more assets onchain and having these native issuances where users are actually the end custodians of their assets, [this] unlocks a huge opportunity.”

However, RWA looping is the same as any other looping product, Gooneratne noted. In these structures, users aim to gain leverage exposure or access to yield bearing products in a more capital-efficient way.

“So put more plainly, if you deposit $100 worth of some asset, you're using that as collateral to go and mint more of that asset and deposit that as collateral again and borrow more and do that four times all atomically,” Gooneratne said. “And so with a $100 deposit, you're effectively getting four times exposure on that $400.”

Although looping strategies has been around for a while, issuers have only recently begun to recognize the appeal. “[They] are realizing that this is the secret to making their 6% to 8% assets interesting for retail,” Gooneratne said. “A lot of these issuers aren’t in the trenches every day and don’t really understand the different tradeoffs users are making, but I think [looping] has been a big driver.”

Even though it may be taking the front seat today, Gooneratne views RWA looping as a short term growth opportunity over the next one to three years and more of a “gateway” to other products. “I think the end state for credit from an institutional perspective, you’ll see more sophisticated players using borrowing.”

Currently, the tokenized private credit market holds about $20 billion in active loans value, up over 100% from the year-ago date, according to rwa.xyz data.

As the market grows, platforms will continue to introduce more tokenized credit products that appeal to a broad institutional user base, Gooneratne said. “I think that is an important place to get to. Then private credit becomes a little bit less private credit.”

That’s the direction we need to go, to make sure we’re headed toward, as we bring all these different off-chain assets onchain,” Gooneratne said.

Check out the next section for more details and the full episode.

For today’s episode, I interviewed Mary Gooneratne, co-founder of Loopscale, about how tokenization, credit markets and asset mobility are converging into the next major wave of onchain finance. Mary explains why only a tiny fraction of the financial system exists onchain today, why future assets will look nothing like governance tokens or digital gold, and what traits are required for the “next 99 percent” of assets to become composable in DeFi.

We discuss tokenized private credit, payment streams, real world lending, and why credit not trading is where crypto offers the biggest step-function improvement. Mary breaks down RWA looping, why liquidity and duration risk matter, how fixed-rate lending unlocks institutional use cases, and why collateral mobility is the missing piece for onchain credit markets to flourish. She also shares Loopscale’s roadmap, the evolution of issuer demand, and why institutions are finally getting comfortable with digital credit rails.

This episode is sponsored by Securitize, the proven leader in tokenized funds, equities, and private markets. Discover more at securitize.io.

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