Why Is Tokenized Credit Used More as Collateral?
Dune's Q3 2026 RWA report estimates that about 19–21% of tokenized credit sits in lending protocols, versus roughly 0.4% of cash equivalents. The difference points to distinct on-chain uses across asset classes, while leaving liquidity and redemption quality as separate questions.
TL;DR — Key Takeaways
- ✓Credit: About 19–21% of tokenized credit exposure was in lending protocols.
- ✓Cash: Only about 0.4% of cash-equivalent exposure was in lending protocols.
- ✓Snapshot: The comparison is based on the report's August 2026 data.
- ✓Caveat: Protocol deposits do not alone establish secondary-market liquidity.
Credit Has a Different On-Chain Job
Dune’s Q3 2026 report compares where tokenized assets sit and how they are used. Its August snapshot shows about 19–21% of tokenized credit in lending protocols. For cash equivalents, the reported share is just 0.4%.
That gap suggests that credit products are more often being supplied to on-chain borrowing markets, while tokenized cash equivalents function mainly as held cash-like exposure. The report describes government bonds as the usual collateral in traditional markets, making the on-chain pattern notable.
Dune’s August 2026 figures put roughly one fifth of tokenized credit in lending protocols, compared with 0.4% of cash equivalents.
— Dune, After Issuance: Reading the Onchain RWA Market, Q3 2026
The percentages describe the report’s classified exposure, not the share of every credit token that can be freely borrowed against by any user.
Collateral Use Is Not the Same as Liquidity
A token deposited in a lending protocol is being used as collateral or supplied to a market. That does not prove it can be sold quickly at a stable price, redeemed on demand, or liquidated without moving the market.
Credit also carries borrower, portfolio and servicing risk. A protocol’s collateral factor and liquidation rules determine how much borrowing capacity a deposit creates; legal claims and redemption terms remain tied to the underlying instrument and its issuer.
This complements the RedStone analysis of tokenized stock collateral: asset classes can grow on-chain without becoming interchangeable sources of liquidity.
Read the Measure Alongside the Asset
Dune says its underlying registry covers products across 21 chains and labels balances at exchanges, lending protocols, decentralized exchanges, custodians and minters. That classification makes the comparison useful, but a snapshot can change as assets move or the registry expands.
For issuers and market operators, the practical question is not simply whether a token can be deposited. It is whether the legal instrument, valuation source, transfer controls and liquidation path remain dependable under stress.
Frequently Asked Questions
What share of tokenized credit is used in lending protocols?
Dune's Q3 2026 report estimates that about 19–21% of tokenized credit sits in lending protocols, based on its August snapshot.
How does that compare with tokenized cash equivalents?
The same report puts the share of cash equivalents in lending protocols at about 0.4%.
Does collateral use mean the asset is liquid?
No. A deposit in a lending protocol shows a particular use, but does not by itself prove deep secondary markets, reliable redemptions or low liquidation costs.
What data powers the report?
Dune says its dataset tracks asset supply and labelled balances, including addresses for lending protocols, exchanges, custodians and other entities.