How Traditional Ownership Left the Dock

In 1602, Amsterdam’s harbor was full of ships preparing for long voyages going east. Investors traditionally funded these individual journeys in exchange for a share of the profits on the goods they brought back, but this model carried enormous risk. A single lost ship could mean a total loss of investment.

As trade grew more expensive and complex, it was time to find a different approach to invest money in such activities. This is when the Dutch East India Company (VOC) finally decided to introduce something new. Instead of backing one expedition at a time, people could now invest to finance many voyages, spreading risk across an entire fleet and receiving a share in the overall enterprise.

This concept revolutionized the way people could relate to trade. For the first time, participation was not limited strictly to the wealthiest merchants. The move set off a domino effect where, over time, shares finally offered a chance for ordinary people to take part in the world of the elites. 

While much has changed since 1602, certain asset classes and financial strategies remained the domain of only a select few.

However, with growing effort and vision, innovators have been working on making a wider net of asset classes accessible to everyday people. This has led to the exploration of interesting new ideas that are transforming the world of finance, both for institutions and individuals.

From Tokenized Assets to Tokenized Rights

While we touched on the topic of specialized tokenized instruments in our Top Narratives for Tech Investing in 2026 article, we decided that it would be a disservice not to take a closer look at these interesting emerging asset types.

Back in the day of the launch of platforms like Ethereum, it became possible to represent ownership claims (e.g., equity or property interests) as digital units governed by programmable rules. In the early experiments, startups like Securitize started placing traditional financial instruments onto blockchain systems, creating a new form of business opportunity.

Early tokenization efforts focused on real-world assets (RWAs) – what most people are familiar with these days. These traditional assets, such as real estate or fine art, are represented as a token on a blockchain. Here, the token is meant to represent a legal claim on the real asset, which might be the full asset or a slice of it.

An important note on this technology is that while RWA technology showed that ownership could be represented digitally, it did not fundamentally change the way one can interact with these assets. It was simply a digital representation of something that already existed in the real world. 

Naturally, attention turned to whether this approach could be extended to capture the mechanisms that govern how assets are used and generate value. Specialized tokenized instruments build on this idea. Rather than representing ownership itself, they define specific rights linked to an asset, such as income, yield, performance, or participation, without requiring full ownership of the underlying asset.

In essence, these tools aim to break complex (often illiquid) or exclusive opportunities into smaller, more manageable pieces that more people can participate in.

The Next Evolutionary Stage of Investment Instruments

Tokenized instruments can be understood as part of a broader historical progression in the organization of investment. Earlier systems were based on direct ownership of physical assets such as land or commodities. After many advancements later, tokenized instruments are now described as the next stage in the evolution of investment structures. [1]

Rather than introducing new assets, specialized tokenized instruments alter how financial claims are handled. Once ownership claims exist in a programmable format, it becomes possible to construct financial instruments directly on top of them. 

Early Tokenization Markets: RWAs and Security Tokens

Although tokenization began as a technical experiment, early activity in 2017 and 2018 centered on what was then called the “security token” market.

Blockchain Capital, one of the first tokenized venture funds launched in 2017, and with a fundraising speed most traditional ventures could only envy, raised $10 million in a single day. By 2018, more than $1 billion had been raised through token issuance platforms. 

At this stage, tokenization functioned primarily as infrastructure for fundraising rather than as a liquid financial market. ATS (alternative trading system) platforms such as OpenFinance and regulated trading venues like tZERO emerged, and custodians and broker-dealers began adapting to digital securities. 

However, as is almost tradition with anything blockchain, adoption remained limited largely because the legal frameworks and market structures were still lagging behind the technology.

But that’s what we love about the blockchain landscape – you never quite know what comes next.

The Tokenized Securities Market After 2020

In 2020, COVID-19 hit.

Governments injected trillions into the economy and interest rates dropped to historic lows, leaving financial institutions managing large pools of capital that suddenly earned very little.

Because this liquidity still needed to be parked in safe, low-risk instruments, the focus turned to familiar income-generating assets such as government debt and money market products. When yields later returned, tokenization emerged as an intriguing new way to access these assets more flexibly and efficiently.

With this accelerating force in the background, tokenized asset issuance grew from roughly $59.7 million in 2018 to about $300 billion by October 2025. Much of this growth occurred in highly standardized financial instruments, including tokenized treasury exposures and money market fund structures, where clarity of valuation and regulatory familiarity could support and speed up adoption.

What We Expect in 2026 and Beyond

Tokenized real-world assets sat at roughly 28 billion dollars in market cap by the end of 2025, nearly a fourfold increase in two years. This growth began to move tokenization toward a more established layer of financial infrastructure.

As a result, 2026 is expected to see the development of new on-chain instruments that function as standard components of the system. These tools may become common parts of the market over time, much like how perpetual futures eventually became a standard feature in crypto trading. Institutional adoption has played a central role in the market expansion, with tokenization mainly being used to streamline settlement and collateral management, rather than to create highly active secondary markets.

As yield-bearing assets move on chain, they create a foundation that enables more complex financial structures. Likely developments that we can expect to see in 2026 include instruments such as collateralized note tokens, tranched credit exposures, and insurance-linked claims. These would need to rely on income-generating assets that already exist on-chain in order to work. Recent market developments suggest that this transition is already underway. 

Tokenized money-market funds holding U.S. Treasuries passed 8 billion dollars AUM in December 2025, while tokenized commodities like gold climbed above 3.5 billion. Large banks are now launching their own vehicles: JPMorgan’s MONY tokenized money-market fund on Ethereum is aimed at institutional and wealthy clients, with minimum tickets starting at 1 million dollars and higher thresholds for some accounts.

Goldman Sachs and BNY Mellon are wiring tokenized fund units into platforms like  LiquidityDirect and GS DAP for institutional dealing rather than retail trading. The key importance here is that the token format allows those units to be handled with the operational tools that institutions care about, which include faster settlement and the ability to use holdings as collateral across connected systems. This activity aligns with the World Economic Forum’s 2025 tokenization report, which highlights improved collateral mobility and connectivity across traditionally siloed fixed-income and private asset markets as the primary benefit, rather than building retail-facing trading venues first.

As these operational benefits take hold within institutional markets, tokenization is starting to extend into adjacent sectors where similar needs for efficiency and connectivity exist. Mordor Intelligence estimates the blockchain insurance market at about 0.93 billion dollars in 2025, rising to 5.26 billion by 2030. This growth suggests interest in using tokenized structures to improve processes such as risk sharing and capital allocation.

An Interesting New Era

In 1602, the move from backing individual voyages to investing in an entire fleet changed the way people could access trade. Something comparably large may be taking shape today.

Tokenization is beginning to support new financial instruments that sit on top of familiar assets and reshape how participation is structured. This is already visible in institutional adoption.  Tokenization is being applied to settlement, collateral mobility, capital efficiency, margin management, fund subscription and redemption processes across markets that were previously separated by technical and operational barriers.

All in all, the coming years in finance are shaping up to be interesting. As always, our team at Arcanum Ventures will be here to continue reporting on these exciting developments. Alongside our articles, our Weekly Recap videos on Youtube or Spotify cover the biggest news in tech and finance to keep you up to date.

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Arcanum Ventures also advises founders and teams building in complex, high-stakes environments, from privacy tech and Web3 to data infrastructure and token design.

If you are building something in the tokenization or fintech space and want a second set of experienced eyes, we want to work with you!

References

[1] Ryabokin, M.; Kotukh, Y. Evolution of Investment Instruments: From Traditional Forms to RWA Tokenization, SSRN