> For the complete documentation index, see [llms.txt](https://docs.usefarlight.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usefarlight.com/introduction/why-now.md). # Why the timing works Three conditions had to hold before a syndicated market for loans against tokenized real-world assets could work. In 2026 they do. Farlight rests on three preconditions, and it needed all of them. Tokenized stocks had to become ordinary on-chain assets with prices that can be relied on. There had to be real demand to borrow against RWAs. And the lending designs already deployed had to leave a gap worth filling. Every one of those readouts is now positive. ## Tokenized stocks are an asset class of their own Transferable, non-stablecoin RWAs on public chains stood at roughly $7.9B at the end of 2024, about $21B as 2026 opened, and around $38.7B now. Of every category inside that figure, tokenized stocks are the one growing quickest. | Segment (rwa.xyz, 28 Aug 2026) | Transferable value on-chain | Notes | | ------------------------------ | --------------------------- | ---------------------------------------------------------------------------------------------- | | Stablecoins | \~$303B | The settlement layer for everything else | | Tokenized US Treasuries | \~$16.0B | USYC $2.9B, BUIDL $2.8B, USDY $2.2B, BENJI \~$2.4B | | Tokenized credit | \~$7.5B distributed | Roughly $35B once non-transferable "represented" assets, Figure HELOCs among them, are counted | | Commodities | \~$3.1B | XAUT, PAXG | | **Tokenized stocks** | **\~$2.6B** | Ondo Stocks past $1B TVL; xStocks past $25B cumulative volume; Robinhood, Coinbase, Binance | | Private equity and VC | \~$1.6B | | | Real estate | \~$175M | | Taken alone, tokenized stocks went from around $424M in mid-2025 to around $2.59B in August 2026. Sources differ by about 20 percent, and the disagreement is mostly about whether non-transferable assets belong in the count. ## Demand to borrow against RWAs exists and is rising Across the year, total DeFi deposits fell by about 15 percent. RWA deposits into DeFi lending went the other way and tripled, to $7.4B (CoinShares, Q2 2026). * By mid-2026 **Aave Horizon** had roughly $540M supplied and $163M borrowed against permissioned treasury and CLO tokens. * **Morpho** grew RWA deposits from almost nothing to about $400M during 2025, reached around $875M on Avalanche by March 2026, and already carries about $80M to $90M live on Robinhood Chain. * On Solana, **tokenized stocks used as collateral** (Kamino, Jupiter Lend) came to about $53M by late July 2026. The number is small for a structural reason: a pooled market has to cap single-stock exposure hard. For scale, US margin debt on its own is above $900B, and securities-backed lending worldwide is a multi-trillion-dollar business that prime brokers and private banks run almost entirely for wealthy clients. ## Robinhood Chain removed the last blocker Robinhood Chain reached mainnet on 1 July 2026. It is the only L2 where a regulated broker issues 1:1-backed tokenized stocks as plain ERC-20s, alongside Chainlink 24/5 price feeds, ERC-4337 account abstraction and permissionless contract deployment. Robinhood's own material describes the tokens as usable for "lending pools and trading collateral". The full case is made in [Why Robinhood Chain](/robinhood-chain/why-robinhood-chain.md). ## Pools leave the long tail unserved Almost all on-chain lending against RWAs is pooled (Aave Horizon, Morpho vaults, Kamino), and a pool carries three limits it cannot design away: * one utilisation curve sets the rate for every borrower, regardless of collateral quality, * bad debt is shared by every supplier, * any asset without deep liquidity has to be capped or excluded. For treasuries and index ETFs, none of this is a problem. For someone holding one mid-cap stock token who wants a 30-day loan at a rate a specific lender would accept, all of it is. The answer is a price per loan, a fixed term and exposure kept separate, which is exactly what Farlight provides. The [design principles](/introduction/design-principles.md) set this out rule by rule. ## What the last cycle taught The previous wave of RWA credit left a clear record of what fails: unsecured loans to borrowers nobody could see into, covenants no chain could enforce, exposure concentrated in a handful of obligors, and wrapper prices that were manipulated. Farlight writes only overcollateralised loans against liquid, oracle-priced collateral held on-chain, so recovery is a smart-contract liquidation rather than a legal claim. Each case is examined in [Lessons from RWA lending](/risk/lessons.md). --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. 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