RWA trading could redistribute DeFi fee and liquidity power

Lorenzo Valente, ARK Invest’s director of research for digital assets, wrote that growth in trading of tokenized real‑world assets could move liquidity and fee power across decentralized finance. He said specialized onchain venues and customer‑facing applications could win greater control over order flow and revenues.

Valente pointed to recent weekly data showing real‑world assets accounted for a majority of trading volume on one decentralized exchange, with individual equities representing the largest share of that activity. He reported that total perpetual contract volume across decentralized exchanges reached $79 billion in a single week, with $50 billion concentrated on one protocol and roughly $26 billion tied to builder‑deployed perpetuals linked to real‑world assets.

That pooled order flow can give front‑end applications leverage in negotiations over fees. Valente used Trade.xyz as an example, saying if the application became the primary source of a venue’s activity it could press for a larger share of user fees. He wrote, “If trade.xyz grows to 90% of Hyperliquid volume, which I see as very possible, I don’t see why they wouldn’t demand a larger share of the overall user fee.” He added that leaving the underlying exchange entirely would be a separate commercial decision.

The trend raises questions about how revenue is split across the blockchain stack: between layer‑1 and layer‑2 networks, between end‑user applications and host chains, and between broker or builder code and the exchanges that handle matching and settlement. Valente described negotiations over fee allocation and control as an active tension in the sector.

Valente also discussed the conditions under which a front‑end application might operate its own chain. Using pump.fun as an example, he said forking a virtual machine such as the Solana Virtual Machine would increase engineering costs and migration risk and would not automatically improve user acquisition. He framed the choice in economic terms: an application should only run its own chain once the cost of its fee bill exceeds the value of the liquidity, users and security it currently rents. He wrote, “The most popular apps launching their own chains is one possible answer, but it only makes sense once an app’s fee bill exceeds the value of the liquidity, users, and security it’s renting. Some will get there, most won’t.”

Valente highlighted new entrants and nontraditional chains tied to brokerages as possible leaders in specific real‑world‑asset categories. He wrote the ongoing industry debate centers on how much monetization power layer‑1 networks retain, how durable network effects are, and whether applications are paying the right price for blockspace and distribution. He described that question as “the million dollar question for the industry.”