Trillions in TradFi Liquidity Are Coming to Solana — How Will It Reshape DeFi?
Preamble
Over the past few months I’ve been writing a lot about Web3 and product management. On my blog I’ve already covered topics like building an arbitrage bot on Solana, my hands-on experience with Solana DeFi projects, and integrations with Raydium, Meteora, Orca, and other mechanics:
- Fell down the crypto rabbit hole — came back with an arbitrage bot in my pocket 🧩
- DEX from the inside: who actually moves the price
- $700,000 in liquidity, 4B% mCap growth, and zero at the end: a top Solana scam scheme explained
- Lost $800 on CEX, made $2,000 on DEX: real copy-trading experience on Solana
I work with Solana pretty closely: testing strategies, digging into smart contracts, keeping tabs on ecosystem updates, and sharing my findings regularly on my Telegram channel.
Recently, I had an interview with a Web3 company operating at the intersection of blockchain and traditional finance.
I can’t share the name or details — NDA. What I can say is that this is one of the largest infrastructure providers for TradFi, serving banks, exchanges, and major fintech players. Since 2013 they’ve been developing a private blockchain platform, licensed out to institutional clients.
Now they’re preparing a move that, in my view, could seriously shift the balance of on-chain finance: bringing real-world assets (RWA) into the Solana ecosystem.
By the way — if you’d like quicker updates on my journey into Web3, AI, and product management, I share them more often on my Telegram channel. Feel free to hop in.
What Are RWAs and Why Do They Matter?
Real-world assets (RWA) are tokenized versions of traditional financial instruments.
- T-bills — short-term U.S. Treasury bonds (under 1 year), sold at a discount to face value
- Corporate bonds — company debt with fixed yield
- Bank deposits — tokenized balances, pegged 1:1
- Private credit — invoice claims, trade finance
- Bond funds & baskets — a single token backed by multiple debt instruments
- Commodities — gold, silver, oil, and other raw materials in tokenized form
Put simply: these are assets that already exist in the real world — but now they can live on-chain, with instant settlement, automated payouts, and programmable behavior.
- Predictable, stable yields
- High-quality collateral for lending, derivatives, and insurance
- On-chain instruments with risk profiles closer to traditional “risk-free” rates
How It Works Today (Off-Chain)
Right now, this provider serves dozens of major clients through a closed blockchain platform.
Each client gets its own isolated network instance with confidential transactions — visible only to the direct participants of a deal.
Inside the system, billions — even trillions — of dollars in assets are tokenized, including:
- Private blockchain per client — every bank or fund runs its own isolated copy of the network.
- Transaction access control — only the counterparties and trusted nodes can see the deals.
- Full RWA servicing — issuance, accounting, and settlement of tokenized assets, from Treasuries to options.
The issue: all of this remains locked inside corporate infrastructure.
Why Solana
They chose Solana because of a unique mix of factors:
- High throughput and low fees → coupon payments can be made as often as daily
- Mature DeFi ecosystem: lending, DEXs, vaults, derivatives, insurance
- Token-2022 → advanced token features (transfer hooks, interest-bearing mint, whitelisting)
- 24/7 settlement: delivery and DvP executed around the clock, no bank holidays
- Composable strategies: RWAs can be collateralized, traded, insured — all via code
Token-2022: Why It Matters for RWAs on Solana
Token-2022 is an upgraded SPL token standard with extended functionality — tailor-made for institutional RWA use cases.
Here are the key features and how they apply in the RWA context:
👉 Interest-Bearing Mint
- What it does: Token balances automatically accrue interest — no separate payout transactions. Interest just streams directly into the account.
- Why it matters for RWA: Enables real-time coupon payments on bonds or deposit yields without manual distributions or batching. Simplifies accounting and boosts liquidity.
👉 Transfer Fees
- What it does: A fixed amount or percentage is deducted on every transfer, routed to a designated address.
- Why it matters for RWA: Automates fee flows — e.g., remittances to an SPV, secondary market fees, or compensation for service providers.
👉 Default Account State
- What it does: New accounts start in a frozen state and only activate after required procedures.
- Why it matters for RWA: Enforces strict access control — tokens can’t be used until the address passes KYC/whitelisting. Helps meet AML/KYC requirements.
👉 Permanent Delegate
- What it does: A designated delegate always retains authority to move or burn tokens, regardless of the owner.
- Why it matters for RWA: Supports clawbacks (court/regulator-ordered recalls), technical fixes, or corporate actions like conversions and buybacks.
👉 Non-Transferable
- What it does: Token can’t be transferred — it stays permanently bound to the initial owner.
- Why it matters for RWA: Perfect for KYC badges, accredited investor certificates, or identity tokens that must remain immutable.
👉 Metadata Pointer / Immutable Metadata
- What it does: Locks token metadata (e.g., ISIN, issuer, maturity date) permanently.
- Why it matters for RWA: Prevents tampering with issuance terms — investors know exactly what they’re holding.
👉 Confidential Transfers
- What it does: Hides balances and amounts while allowing verification by auditors or regulators.
- Why it matters for RWA: Gives institutions privacy while still enabling oversight. Especially critical for banks and funds.
👉 Token Group / Group Member
- What it does: Allows tokens to be grouped or categorized under shared rules.
- Why it matters for RWA: Simplifies issuance management — e.g., ensuring operations are restricted to a specific bond series or fund.
👉 Mint Close Authority / Freeze Authority
- What it does: Grants the ability to fully shut down a token mint or freeze individual accounts.
- Why it matters for RWA: Essential for controlling issuance, halting operations during incidents, or freezing assets by regulator request.
👉 CPI Guard / Memo Rules
- What it does: Restricts cross-program invocations and enforces transaction memos.
- Why it matters for RWA: Reduces risk from complex on-chain exploits and simplifies audits by ensuring transactions only run through approved flows.
The First Wave of Assets
If real-world financial instruments were to enter Solana tomorrow, the obvious question is: where do you start?
It’s unlikely the first movers would be complex derivatives or illiquid private credit. The initial assets need to be simple, reliable, and universally understood — by hedge funds, regulators, and everyone in between.
That’s why the first wave will almost certainly include:
- T-bills / money market instruments — tokenized U.S. Treasuries with maturities from 4 to 52 weeks. Among the most liquid and trusted assets globally, offering ~4–5% annual yield with a clear risk profile.
- Tokenized deposits — a digital twin of bank money, pegged 1:1 to fiat accounts. Access restricted to whitelisted addresses, ensuring KYC/AML compliance from day one.
This starting point gives Solana DeFi what it’s been missing: high-quality collateral and stable yield — the perfect foundation for the first wave of institutional strategies.
Strategies and Use Cases
If the first wave of RWAs on Solana starts with the simplest and safest assets — like T-bills and tokenized deposits — the natural next step is to layer in more complex, higher-yield instruments: corporate bonds, private credit, structured products, and eventually commodities and derivatives.
Once that base layer of stable collateral is in place, the real strategies begin — from straightforward collateralized loans to multi-asset structured plays.
What could emerge:
- Lending & Repo (marginfi, Solend, Kamino K-Lend, Drift)
- Cheap loan against T-bills: Post $1M in Treasuries (earning ~3% annually), borrow $800k USDC at 2%, and pocket the spread.
- On-chain repo: Post $5M in T-bills with a 2% haircut, receive $4.9M USDC for 14 days at 3% APR, repay and reclaim your collateral.
- Cross-collateral: Combine T-bills with liquid staking (e.g., jitoSOL) to earn yield on both while offsetting borrowing costs.
- Yield Containers (Vaults & Baskets via Kamino, Meteora)
- Cash parking: Deposit USDC into a Vault that buys T-bills; the Vault token steadily appreciates as coupons accrue.
- Bond basket: 70% T-bills, 30% corporate bonds, with auto-rebalancing.
- Private credit with tranching: Senior tranche for conservative investors (low risk, fixed income) and junior tranche for those chasing higher returns.
- Trading & Liquidity (Orca, Raydium, Phoenix)
- Whitelist pools: Only addresses that pass KYC via Civic Pass can trade.
- Order book markets: Trading pairs like RWA/USDC with tight spreads.
- Insurance & Protection (Amulet, insurance funds)
- Parametric protection: Automatic payouts if a token depegs from the dollar or its NAV drops.
- Income-backed insurance fund: Holds T-bills and pays claims out of yield or repo proceeds.
- Compliance & Access (Civic Pass + Token-2022)
- Hedging & Combinations (Drift, lending markets)
Why This Matters for Solana DeFi
Bringing RWAs to Solana isn’t just about “a new token type” — it’s a fundamental shift in the liquidity profile of the ecosystem.
Up to now, most of Solana DeFi has revolved around volatile assets: SOL, stablecoins, and derivatives. With RWAs, Solana gets high-quality, reliable collateral with predictable yield. That means you can finally build long-term credit products without worrying about sudden price crashes wiping out collateral.
For institutions and funds, it’s a clear signal: Solana is a place where you can safely park capital, earn fixed income, and still remain fully on-chain. The influx of “grown-up” liquidity — from funds, DAOs, and corporate treasuries — could mean billions, even trillions, flowing into DeFi that previously stayed away.
RWAs also open new product niches: repo markets, lending desks, insurance, hedging, and structured products. Yield generation moves beyond speculation — anchored instead in real financial instruments.
And finally, it’s legitimization of DeFi in the eyes of TradFi. When the same T-bills, corporate bonds, and deposits that banks and funds already trade start moving on-chain, the line between “crypto” and “traditional finance” begins to blur. For Solana, this is a step toward becoming not just Web3 infrastructure, but part of the global financial system.
What’s Next
The first wave of assets is just the warm-up.
After T-bills and tokenized deposits, we’ll likely see corporate bonds, securitized loans, and eventually complex baskets of assets — where a single token could represent multiple classes of debt instruments at once.
And all of it will live on Solana: with low fees, atomic settlement, and seamless integration into existing DeFi protocols. Picture a DAO treasury holding a tokenized mix of T-bills, corporate bonds, and gold — and then using it as collateral across any strategy, from lending to hedging.
But the real questions that keep me thinking today are:
- Which RWA strategies on Solana will prove the most profitable and sustainable over the next 1–2 years?
- And should we start building products ahead of the curve — before the big wave of institutional liquidity even arrives?
What Do You Think?
Which RWA strategies on Solana do you believe have the biggest potential — lending, hedging, asset baskets, insurance, or something else entirely?
And should we already be designing products for the future — while the real wave of liquidity is only just preparing to enter the ecosystem?