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The tokenization of traditional assets is accelerating rapidly. From JPMorgan's blockchain initiatives to emerging DeFi protocols, institutions across the spectrum are working to bring stocks and bonds onto blockchain infrastructure. Industry analysts project this could evolve into a multi-trillion dollar market over the next decade.
However, current implementations face significant technical and economic challenges.
That's the frank assessment from Rohan Rathod, co-founder of Solistic Finance, a protocol developing a new approach to real-world asset tokenization. Rather than creating another synthetic token that struggles with price accuracy, Solistic aims to address the core infrastructure problems that have limited the effectiveness of existing RWA platforms.
We spoke with Rohan about the current market dynamics and Solistic's strategy for improvement.
Rohan: The existing solutions have fundamental structural issues that we believe need addressing. Current synthetic stock tokens often trade at significant premiums or discounts to their underlying assets—sometimes 5-10% off the actual stock price. This isn't acceptable for serious financial applications.
Additionally, many protocols charge substantial management fees, often around 1% annually, while failing to distribute dividends to token holders. This means users pay more while receiving fewer benefits than traditional stock ownership.
The liquidity infrastructure is also problematic. Most tokens are distributed across fragmented AMM pools, creating slippage even for relatively modest transaction sizes on assets representing companies worth hundreds of billions of dollars.
Rohan: It comes down to architectural design. Most existing protocols lack proper issuance and redemption mechanisms. They essentially create derivative tokens and rely on market makers to maintain price parity, but without robust arbitrage mechanisms, prices inevitably drift from their underlying assets.
Solistic addresses this through direct issuance and redemption functionality. When token prices diverge from underlying asset values, arbitrageurs can mint new tokens or redeem existing ones to capture the spread, naturally maintaining price accuracy.
Rohan: Rather than attempting to bootstrap liquidity through incentive programs, we connect directly to institutional liquidity sources—the interbank market and established stock exchanges.
When users trade tokenized assets on Solistic, they're accessing the same liquidity depth that institutional players use. Token supply expands and contracts based on actual demand, similar to how traditional ETFs operate. This approach provides significantly better execution than typical AMM pools.
Rohan: The fundamental question around the RWA tokenization is this. The proper displaying of the real-world assets calls for that there is a connection with the traditional financial infrastructure. The major point is to make these connections in such a way that no unnecessary gatekeeping or restrictions are created.
Our answer to this problem is the dual interfaces that cater to different user segmentations. We are providing a simplified application interface that is like the traditional fintech platforms, which will lead the tokenized assets to the general public who might not be very much familiar with the crypto protocols. At the same time, the very same tokens are traded through our open dApp, where users can take advantage of the complete DeFi capabilities—such as using tokens as collateral, engaging in automated market making, or collaborating with other protocols.
Both interfaces access identical liquidity pools and token supplies, preventing market fragmentation.
Rohan: Our first move directed towards equities and fixed income is significant, however, the full extent of the opportunity lies with tokenizing sophisticated financial instruments—options, derivatives, and structured products that are now confined to the institutional markets.
Consider the possibilities: tokenized call options that can serve as collateral in DeFi lending protocols, or government bonds that can be swapped instantly for other assets without traditional settlement delays. As of now, cross-asset trading requires multiple broker relationships, extended settlement periods, and geographic restrictions. Most importantly, the infrastructure of blockchain eliminates these friction points greatly.
The vision is a unified financial layer where any tokenized instrument can interact with any other, regardless of asset class or geographic origin.
Rohan: The law is the main consideration in the entire process of our development. The regulatory framework for tokenized securities is changing constantly, but we are setting up our infrastructure to be compliant with laws that are in place now whilst getting ready for the future when regulations around this area will be clearer.
It is our view that tokenization will not just be a way of escaping regulation but will actually enhance regulatory control. Transactions made on-chain will have the least audit difficulty and will be the most transparent ones compared to those made in the traditional financial systems. Regulators see it as a fact that if tokenization is done properly then it will be able to support market surveillance and investor protection.
Rohan: We're prioritizing infrastructure development over rapid market entry. Both the technical architecture and compliance framework require substantial development work before we can offer a production-ready platform.
Our current timeline targets user availability in 2025, beginning with a curated selection of major equity assets. We believe it's more valuable to launch with robust, properly functioning infrastructure than to rush to market with the same limitations that affect current platforms.
Rohan Rathod is co-founder of Solistic Finance. As institutional and retail interest in tokenized assets continues growing, Solistic's approach to combining institutional-grade liquidity infrastructure with accessible user interfaces represents one potential path toward broader RWA adoption.
