Redstone Research: The $1 Trillion Revenue Opportunity in Crypto Assets Lies in Liquid Staking Derivatives and Tokenization of RWA

A recent study by Redstone revealed a major structural flaw in the crypto economy: in the $3.2 trillion crypto market, only 8% to 11% of the money is able to generate yields, compared to 55% to 65% in traditional finance (TradFi). This five- to six-fold gap highlights the far-reaching impact of interest-bearing products on traditional markets, while cryptocurrencies still rely heavily on their appreciation.

Max Sandy, the product head of Ramp Network, stated that this gap is not just a statistical anomaly, but a fundamental barrier to institutional adoption of crypto assets.

“If there are no predictable, auditable returns, institutions cannot deploy significant capital,” Sandy explained. “Returns drive the design of investment mandates, risk models, and asset allocation frameworks. In the crypto assets space, returns remain fragmented, difficult to assess, and heavily reliant on non-standardized smart contract risks.”

Redstone's research also explains why large capital allocators remain cautious. Due to the lack of standardized yield mechanisms, it is difficult for institutions to integrate Crypto Assets into existing frameworks that rely on stable yield-generating instruments. Sandy believes that bridging this gap requires several key upgrades, including building a resilient infrastructure to reduce systemic risk, increasing the transparency of yield generation and maintenance methods, and improving the user experience to make yield products more accessible.

“Today, for institutional and retail investors, yield products are still too complex,” Sandy pointed out, emphasizing that availability is just as important as infrastructure.

Additionally, according to Redstone's research, the yield gap also represents the greatest opportunity for crypto assets to achieve exponential growth. When asked where the first trillion-dollar new type of yield asset will emerge, Sandy pointed out two direct sources: liquid staking derivatives (LST) and tokenized real-world assets (RWA): “The most direct growth will come from two areas: liquid staking and tokenized real-world assets [RWA], such as government bonds and short-term credit. LST has already been deeply integrated into DeFi, while RWA is exactly the same as the tools used for institutional large-scale allocation.”

Looking ahead, Sandy predicts that the yield on stablecoins will become a basic expectation for users. “If you hold digital dollars, you would expect them to earn a yield by default. This is where consumer applications and wallets will come into play.” He added that Ramp Network plans to enable users to earn yield from their USDC balances on Base. (Bitcoin.com)