Real-world assets onchain: The next wave of institutional DeFi

TL; DR:

• DeFi lost over 75% of its liquidity after 2022, prompting funds and DAOs to seek more reliable yield sources.

• Zoth enables the restaking of tokenized real-world assets, such as T-Bills and ETFs, by combining off-chain interest with on-chain DeFi yield. Institutions can earn dual returns from a single asset without losing liquidity or violating compliance.

• ZeUSD, a stablecoin backed by staked RWAs, unlocks composability across DeFi protocols.

• With RWA tokenization projected to exceed $2T by 2030, Zoth is building core infrastructure for institutional DeFi.

• Zoth is rebuilding with stronger security partnerships, real-time AI monitoring, and governance upgrades that are setting a new bar for institutional-grade DeFi

The collapse of DeFi liquidity in 2022 exposed more than just a market downturn. Total value locked dropped from $180B to under $40B, and stablecoin supply fell across the board. Yields dried up. Institutional capital didn’t disappear; it pulled back because the risks no longer justified the returns. DeFi wasn’t offering stable, credible income. It was offering volatility wrapped in complexity.

At the same time, traditional markets offered clarity. Treasuries paid 4 to 5 percent with far less risk. Institutions didn’t lose interest in blockchain. They just needed something grounded. Something with real value behind it, built to meet compliance needs, and flexible enough to fit into modern portfolios.

The problem wasn’t yield. It was yield without structure. DeFi relied too heavily on native token incentives and short-term lending models. As confidence fell, stablecoins like USDC, DAI, and Tether lost billions in market cap. Treasury managers and funds had nowhere safe to move capital without taking on volatility or counterparty exposure.

What institutions need hasn’t changed. They want stable yield with transparency. Real-world assets like tokenized T-Bills and receivables deliver that. But to unlock their full value on-chain, they need infrastructure that connects traditional returns with DeFi liquidity.

Rethinking Institutional Yield Through Restaking

Zoth is building the infrastructure layer for institutions to unlock real-world yield within DeFi. It was designed for a new kind of allocator, one that expects regulatory clarity, capital efficiency, and stability from on-chain assets.

Traditional DeFi lending relied on overcollateralization and token-based rewards. That model worked in a speculative cycle but breaks down under institutional standards. It lacks predictability and cannot scale across regulated portfolios.

Zoth takes a different approach. It starts with tokenized real-world assets like Treasury bills, ETFs, or receivables issued through compliant custodians. These assets generate off-chain yield as they would in traditional markets; that’s the first layer. But Zoth allows these same assets to be restaked within DeFi protocols, unlocking an additional layer of returns from lending markets, staking programs, or liquidity strategies.

To make this composable, Zoth introduces ZeUSD, a stablecoin backed by restaked real-world assets. Users can mint ZeUSD without giving up exposure to the original yield source. It functions across DeFi, creating a liquid bridge between regulated collateral and programmable capital.

The result is a dual-yield structure. While staking traditional stablecoins might offer 1 to 2 percent returns, Zoth’s restaked positions often generate between 7 and 9 percent by combining off-chain interest with on-chain rewards.

What Makes Zoth’s Model Work

Zoth isn’t just a technical upgrade; it’s a structural rethink of how real-world assets interact with DeFi. The platform applies institutional finance principles to an on-chain environment without compromising the composability that defines crypto infrastructure.

At the asset layer, Zoth works with trusted tokenization partners who issue regulated, real-world collateral. These assets meet compliance and custody standards and are validated both on-chain and through legal agreements. That dual structure solves a key blocker for institutions: trust in asset provenance and recoverability.

At the protocol layer, Zoth’s staking system is built for interoperability. Its stablecoin, ZeUSD, acts as a cross-chain asset backed by staked real-world instruments. Unlike stablecoins that rely on market pricing or liquidity incentives, ZeUSD is anchored in income-producing collateral.

This system allows institutions to unlock yield across multiple layers while maintaining liquidity, auditability, and control. It’s capital that performs without being locked or exposed to unstable reward mechanisms.

Solving Fragmentation and Regulation

Zoth tackles two of the most persistent barriers to institutional DeFi participation: fragmented liquidity and regulatory uncertainty.

DeFi has long suffered from siloed infrastructure. Assets locked in one protocol often cannot be used elsewhere without unwinding positions. This makes capital inefficient and limits yield opportunities. Zoth addresses this with ZeUSD, a stablecoin that enables tokenized real-world assets to move fluidly across DeFi platforms. Whether used for lending, liquidity provisioning, or credit markets, ZeUSD maintains access to underlying yield while freeing up composable liquidity.

On the regulatory front, Zoth is built to meet the standards that institutional capital requires. It aligns with frameworks such as MiCA and Basel III by ensuring each RWA on the platform has clear legal ownership, compliant custodianship, and transparent reporting structures. These design choices make it possible for hedge funds, DAOs with legal entities, and asset managers to deploy capital on-chain without triggering regulatory red flags.

By solving for both compliance and composability, Zoth removes two of the largest structural frictions preventing real-world capital from entering DeFi.

The RWA Market Is Scaling

The market for tokenized real-world assets is no longer theoretical. Over eight billion dollars worth of assets have already been issued on-chain. These include Treasury bills, investment-grade credit, real estate debt, and even carbon offsets. Analysts project that this number will grow beyond $2T by 2030, driven by institutional demand for transparent, liquid, and programmable yield instruments.

Major players are already building. BlackRock launched a tokenized Treasury fund with direct access to on-chain settlement. JPMorgan’s Onyx network processes tokenized repo trades and cross-border transactions between global banks. Franklin Templeton and WisdomTree are managing real-time tokenized portfolios with daily net asset value reporting on public blockchains.

What was once an idea is now an active migration. Capital markets infrastructure is being rebuilt with programmable assets and real-world financial primitives. Zoth is positioning itself within this change not just as a tokenization wrapper, but as a restaking engine that makes these assets productive across multiple layers of DeFi.

Expanding the RWA Stack: Zoth’s Roadmap

Zoth is adding support for more asset types beyond short-term Treasuries, including corporate credit, commercial loans, real estate, and private equity. These assets differ in how they are structured, valued, and settled. To support them, the infrastructure needs to account for different data sources, custody models, and time horizons.

ZeUSD is being integrated into treasury management systems, lending protocols, and staking platforms. This allows institutions to use a stable unit of account across DeFi without needing to unwind their real-world positions. That becomes more useful when the underlying assets are less liquid or have longer lock-up periods.

On the security side, Zoth has introduced automated monitoring to track protocol-level behavior in real time. It has also completed independent audits, published a bug bounty, and open-sourced parts of the stack. These measures help reduce the operational overhead for institutions that need audit trails and internal review processes.

The team is also adapting the system to work within regional regulatory frameworks. This includes changes to how asset ownership is recorded, how custody is handled, and how stablecoin mechanics are disclosed. These adjustments are necessary for working with counterparties who have legal or reporting obligations.

DAOs and Hedge Funds are Already Participating

Zoth is already being used by institutional players. Hedge funds are deploying tokenized Treasury bills through the platform to earn dual yield while remaining fully compliant. DAOs are converting idle USDC into ZeUSD to access yield strategies without giving up liquidity.

For treasury managers, ZeUSD offers composability across protocols. It can be lent on platforms like Morpho or Clearpool, used in automated vaults, or paired in liquidity pools. Throughout this process, the underlying real-world assets remain intact and continue generating primary yield.

This dual yield structure is proving to be one of the first practical alternatives to simply holding stablecoins. Institutions no longer have to choose between yield and security. With Zoth, they can have both.

The Team behind Zoth

Co-founder and CEO Pritam Dutta brings 15+ years of experience from Unilever and AB InBev, where he led the Digital Ventures unit. There, he launched fintech and Web3 initiatives, generating $275M in revenue and $12M in gross profit in 2021. He spearheaded Budweiser’s NFT launch, selling $50M worth in under four hours. Pritam also founded Eagle10 Ventures, backing 25+ companies with two exits. His earlier food-tech startup, Pasto, was acquired by Ghost Kitchens after reaching $1M in annual sales.

Co-founder and CTO Koushik Bhargav Muthe is a blockchain researcher and ETH Scholar with experience at UC Berkeley, NTU Singapore, and ASTAR IHPC. A winner of 15+ global hackathons, including ETHDenver, he previously led Web3 initiatives at AB InBev’s ZTech division. Koushik’s work bridges academic research and protocol development, with multiple publications in peer-reviewed journals.

Conclusion: Real Yield Is the Future of DeFi

As DAOs, funds, and asset managers rethink how they allocate capital on-chain, Zoth offers the infrastructure to do it with accountability and scale. The next wave of yield will come from systems built to handle real assets, not just native ones. Zoth combines real-world yield with on-chain utility. Its restaking model turns static collateral into productive capital. ZeUSD enables participation across protocols without sacrificing regulatory standards or asset stability.

If you're allocating in DeFi or designing around tokenized assets, it's time to look at where real yield is coming from. Check Zoth’s technical documentation for a more in-depth look at their system.