On-Chain Settlement Traffic Battle: The Five Major Infrastructure Payment Settlement Race in the $19.7 Billion RWA Market

Over the past six months, institutional-grade RWA (Real-World Asset) tokenization on-chain settlement volume has experienced astonishing growth. The market size has approached $20 billion, supported by a fierce competition around DvP (Delivery versus Payment) flow and transaction settlement efficiency. This is not hype—genuine institutional capital is deploying onto blockchains through various DvP infrastructure channels.

Currently, five major protocols have become the backbone of institutional RWA settlement flow: Rayls Labs, Ondo Finance, Centrifuge, Canton Network, and Polymesh. They are not competing for the same client pool but serve different institutional needs through differentiated payment and settlement solutions: banks require privacy-preserving DvP channels, asset managers pursue efficient cross-chain settlement flow, while Wall Street firms demand enterprise-grade compliant infrastructure.

The real battleground is not in technical papers but in the actual volume of flowing settlement transactions.

Surge in Settlement Volume: Institutional Capital Shifts from $8B to $19.7B

Three years ago, on-chain RWA tokenization was almost unstructured. By early 2026, on-chain assets such as government bonds, private credit, and public equities have approached $19.7 billion, a 2.5x increase from the $6-8 billion range at the start of 2024.

But a better reflection of DvP flow characteristics is the distribution of settlement volume across market segments:

Based on early 2026 market data from rwa.xyz:

• Government bonds and money market funds: $8-9 billion (45-50%), with relatively stable daily settlement flows supporting 24/7 DvP settlement
• Private credit: $20-60 billion (20-30%), smaller base but fastest growth in settlement frequency and volume, representing real institutional credit trading demand
• Public equities: over $400 million (fastest growth), mainly driven by Ondo Finance, indicating potential for retail-friendly DvP infrastructure

Three Major Drivers of RWA Settlement Volume Surge

1. Yield Arbitrage and Time-Frame Efficiency in DvP

Tokenized government bond products offer 4%-6% annual yields and support 24/7 on-chain DvP, several orders of magnitude faster than traditional T+2 clearing cycles. For institutional finance managers managing billions in idle capital, this means they can initiate DvP processes immediately without waiting for business hours.

Private credit instruments offer 8%-12% yields plus faster payment and settlement efficiency, enabling institutions to complete complex transactions within shorter windows.

2. Regulatory Frameworks as a Pass for DvP Channels

• EU MiCA: Enforced across 27 countries, providing clear legal frameworks for cross-border DvP settlement
• US SEC “Project Crypto”: Advancing on-chain securities settlement frameworks, with No-Action Letters enabling infrastructure providers like DTCC to tokenize assets and support native DvP
• Regulatory Clarity: Instills confidence among institutions, accelerating deployment of on-chain DvP settlement flows

3. Custody and Oracle Maturity: Infrastructure Readiness for DvP

Chronicle Labs has handled over $20 billion in total locked value, playing a key role in on-chain settlement data verification. Security auditors like Halborn have certified major RWA protocols, indicating infrastructure maturity sufficient to meet institutional DvP custodial standards.

However, a significant emerging challenge is cost fragmentation in cross-chain DvP flows. Payment and settlement costs across different blockchains are estimated at $1.3-$1.5 billion annually, with price gaps of 1%-3% for identical assets on different chains.

Rayls Labs: Bank-Grade Privacy DvP Channels

Rayls Labs positions itself as a compliance-first bridge connecting banks and DeFi, with its core value proposition being privacy-preserving DvP infrastructure for banks. Developed by Brazilian fintech Parfin, supported by Framework Ventures, ParaFi Capital, Valor Capital, and Alexia Ventures, its L1 blockchain is designed specifically for regulated payment and settlement needs.

Enygma Privacy Tech Stack’s Core DvP Features

• Zero-Knowledge Proofs: Verify DvP legality while fully protecting transaction privacy
• Homomorphic Encryption: Support direct settlement calculations on encrypted data without decryption
• Native DvP operations across cross-chain and private networks
• Confidential Payments and Settlement: Support atomic swaps and embedded DvP workflows
• Programmable Compliance: Selectively disclose DvP settlement data to auditors

Actual DvP Settlement Use Cases

• Brazil Central Bank: Using Rayls for CBDC cross-border settlement, leveraging its privacy DvP capabilities
• Núclea: Regulated tokenization of receivables, completing fund transfers via privacy DvP
• Multiple undisclosed node clients: Using privatized payment and settlement workflows

Progress as of January 8, 2026: Rayls completed security audits by Halborn. More importantly, the AmFi alliance committed to tokenizing $1 billion in assets on Rayls, which directly implies a massive flow of DvP settlement volume through Rayls’ privacy channels over the next 18 months.

AmFi, Brazil’s largest private credit tokenization platform, has committed $1 billion to Rayls, providing immediate settlement volume assurance. This is one of the largest institutional RWA commitments in any blockchain ecosystem today.

Key challenge: Without public TVL data, Rayls needs to demonstrate its real DvP settlement volume by mid-2027.

Ondo Finance: Retail-Scale DvP Transaction Volume Explosion

Ondo Finance has achieved simultaneous breakthroughs in DvP flow and trading volume as it expands from institutional government bonds to retail-friendly tokenized stocks.

Flow Metrics as of January 2026

• Total Value Locked (TVL): $1.93 billion
• Tokenized stocks: over $400 million, accounting for 53% of all settlement transactions
• USDY holdings on Solana: approx. $176 million, representing DeFi-native user DvP participation

In my testing, Solana’s USDY product flows smoothly—thanks to Solana’s sub-second finality (around 6 seconds), perfectly matching institutional government bond DvP needs, balancing DeFi convenience with institutional-grade DvP guarantees.

2026 DvP Flow Expansion Plan

On January 8, 2026, Ondo launched 98 new tokenized assets covering stocks and ETFs in AI, EV, and other sectors. This is not a small pilot but a full-scale bet on retail DvP transaction flow.

The plan is to launch tokenized US stocks and ETFs on Solana in Q1 2026, aiming to list over 1,000 tokenized assets throughout 2026. Multi-chain deployment strategies ensure maximum DvP flow coverage:

• Ethereum: Institutional DeFi DvP hub
• BNB Chain: Payment and settlement flow for exchange-native users
• Solana: Large-scale consumer DvP channel

Key observation: While token prices declined, TVL reached $1.93 billion, indicating actual DvP demand rather than speculation driving growth. The TVL increase during market volatility in Q4 2025 further confirms this—institutions are seeking stable DvP infrastructure.

Through custody partnerships with brokers-dealers, Halborn security audits, and product launches across three major chains within six months, Ondo has established an insurmountable DvP flow advantage. Competitor Backed Finance’s tokenized assets total only about $162 million.

Challenge: DvP price volatility outside trading hours remains unresolved. Assets can be transferred at any time, but pricing must reference exchange hours, potentially creating arbitrage gaps during US night hours.

Centrifuge: On-Chain DvP Hub for Asset Managers

Centrifuge has become the industry standard infrastructure for institutional private credit DvP. As of December 2025, its TVL soared to $1.3-$1.45 billion, driven entirely by deployed institutional capital and on-chain DvP settlement volume.

DvP Deployment by Major Institutions

Janus Henderson (managing $373 billion globally):

• Anemoy AAA CLO fund: Fully on-chain AAA-rated secured loan securities, managed by the same team as its $21.4 billion AAA CLO ETF
• July 2025: Announced $250 million additional investment on Avalanche, implying larger on-chain DvP flows

Grove Capital (Sky ecosystem’s institutional credit protocol):

• Committed $1 billion in funding strategy
• Initial capital of $50 million
• Team from Deloitte, Citigroup, BlockTower Capital, and Hildene Capital Management

Chronicle Labs partnership (announced Jan 8, 2026):

• Asset proof framework providing cryptographic position verification
• Supports transparent NAV calculation, custody verification, and compliance reporting
• Full DvP flow and settlement data dashboards for LPs and auditors

Chronicle’s asset proof framework solves a key on-chain RWA problem: how to meet institutional data verification needs within fully transparent DvP workflows. It is the first oracle solution truly meeting institutional DvP requirements.

Centrifuge’s On-Chain DvP Workflow

Compared to competitors’ simple wrapping of off-chain products, Centrifuge directly tokenizes credit and DvP natively at issuance:

1. Issuers design and manage transparent workflows for fund issuance
2. Institutional investors allocate stablecoins, initiating payment and settlement workflows
3. Funds flow directly to borrowers after credit approval
4. Repayments are proportionally distributed via smart contracts, completing atomic DvP
5. AAA assets yield 3.3%-4.6% annually, fully transparent on-chain

Supported by multi-chain V3 architecture, the DvP network includes Ethereum, Base, Arbitrum, Celo, Avalanche.

The key point: asset managers need to prove that on-chain DvP can support deployment of billions of dollars, and Centrifuge has already demonstrated this. The cooperation with Janus Henderson alone provides DvP capacity in the tens of billions.

Centrifuge’s leadership in setting industry standards (co-founding the Tokenized Asset Coalition, Real-World Asset Summit) further cements its role as DvP infrastructure, not just a single product.

Future challenge: The 3.8% target yield is less attractive compared to higher returns historically available in DeFi. How to attract DeFi-native liquidity providers beyond Sky ecosystem allocations into DvP processes remains a key question.

Canton Network: Rebuilding Wall Street-Grade DvP Infrastructure

Canton Network is a direct response to the unpermissioned DeFi vision for institutional blockchains—a privacy-preserving public DvP network supported by top Wall Street firms.

Participating Institutions and DvP Goals

Participants include DTCC, BlackRock, Goldman Sachs, and Citadel Securities. Canton’s ultimate goal is to target the $370 trillion annual settlement volume processed by DTCC in 2024. This number is no typo—this is the real target for Canton’s DvP infrastructure overhaul.

DTCC Collaboration and the Big Shift in Payment and Settlement (Dec 2025)

Partnership with DTCC is core to Canton’s DvP strategy. It’s not just a pilot but a fundamental commitment to building US securities DvP settlement infrastructure.

After SEC No-Action Letter approval, Canton can tokenize some US Treasuries held by DTCC natively and plans to launch a controlled MVP in H1 2026—the first production deployment of atomic-level US Treasury DvP on blockchain.

Key details:

• DTCC and Euroclear jointly chair the Canton Foundation, controlling DvP process governance
• Initial focus on Treasuries (lowest credit risk, highest liquidity, clearest regulation)
• Post-MVP, expansion to corporate bonds, equities, structured products possible

Temple Digital Platform: Wall Street’s New DvP Model

On Jan 8, 2026, Canton ecosystem made a major step: Temple Digital Group’s private trading platform launched. It’s operational, not just “coming soon”:

• Central limit order book: sub-second DvP matching
• Non-custodial architecture: currently supports crypto and stablecoins, with plans for tokenized stocks and commodities in 2026
• Ecosystem partners:
  • Franklin D. Dempsey: manages $828 million money market fund, directly DvP via Canton
  • J.P. Morgan: DvP settlement via JPM Coin

Canton’s Smart Contract-Level Privacy DvP Architecture

Canton’s privacy relies on Daml (Digital Asset Modeling Language) for protocol-level privacy:

• Smart contracts specify which DvP data each participant can see
• Regulators access full audit records
• Counterparties view settlement details
• Competitors and the public are blind to DvP info
• All DvP states update atomically across the network

For Wall Street institutions used to confidential trading via Bloomberg terminals, Canton’s DvP architecture strikes a key balance: offering blockchain efficiency while avoiding exposure of proprietary trading strategies. Wall Street will never expose trading activity on fully transparent ledgers.

Canton’s 300+ participating institutions demonstrate its DvP appeal, though current reported volumes are likely more pilot than actual production flow.

Current limitation: The planned MVP due in H1 2026 reflects multi-quarter planning cycles. Compared to DeFi protocols that often deploy new features in weeks, Canton’s DvP iteration is relatively slow.

Polymesh: Protocol-Level DvP Native for Securities Blockchain

Polymesh stands out with protocol-layer native DvP support rather than complex smart contract workarounds. Designed specifically for regulated securities, Polymesh performs DvP compliance verification at the consensus layer.

Protocol-Level DvP Support

• Identity verification: protocol-level validation via licensed KYC providers
• Embedded transfer rules: non-compliant DvP transactions fail at consensus, no post-processing needed
• Atomic settlement: finality within 6 seconds, ensuring full DvP guarantees

Production-Ready DvP Use Cases

• Republic (Aug 2025): on-chain DvP issuance for private securities
• AlphaPoint: connects 150+ trading venues across 35 countries directly into Polymesh’s DvP architecture
• Target scenarios: regulated funds, real estate, corporate equity with atomic DvP

Advantages of Protocol-Level DvP

• No need for custom smart contract audits, reducing implementation complexity
• Protocol automatically adapts to regulatory changes, enabling seamless upgrades
• Cannot execute non-compliant DvP transfers—this is the only outcome

Challenge & development: Currently, Polymesh operates as an independent chain, isolated from DeFi liquidity. To address this, a bridge to Ethereum is planned for Q2 2026, significantly expanding DvP flow sources.

I must admit I underestimated the potential of this “compliance-native” DvP architecture. For issuers frustrated by ERC-1400 complexity, Polymesh directly embeds compliance and DvP atomicity into the protocol, not relying on smart contracts—this is a true design breakthrough.

The Five Protocols’ DvP Flow Characteristics and Market Segmentation

These five protocols do not compete directly because they address entirely different DvP problems:

Privacy Approaches in DvP

• Canton: Wall Street counterparty-level privacy via Daml smart contracts, key is confidentiality of trading strategies
• Rayls: Zero-knowledge proof-based mathematical privacy, targeting bank-grade CBDC and cross-border DvP
• Polymesh: Protocol-level privacy verification, suited for securities DvP compliance

DvP Settlement Flow Strategies

• Ondo: Manages $1.93 billion across 98 assets on three chains, prioritizing flow speed, supporting retail-scale transactions
• Centrifuge: Focuses on $1.3-$1.45 billion institutional credit DvP, prioritizing flow depth, supporting large institutional settlements

Market Mapping of DvP Flows

• Banks/CBDC → Rayls privacy DvP channels
• Retail/DeFi → Ondo cross-chain DvP flow
• Asset managers → Centrifuge on-chain DvP hub
• Wall Street institutions → Canton private DvP infrastructure
• Securities issuance → Polymesh atomic DvP settlement

Key insight: Institutions will not choose “the best blockchain” but the DvP infrastructure that best solves their specific compliance, operational, and competitive needs.

Unresolved DvP Flow Challenges

1. Cost Fragmentation in Cross-Chain DvP Liquidity

Cross-chain DvP fragmentation incurs high costs: estimated at $1.3-$1.5 billion annually. Due to high bridging costs, DvP price gaps of 1%-3% for identical assets across chains are common.

This is one of my biggest concerns. Even with the most advanced tokenization infrastructure, if DvP flows are fragmented across incompatible chains, efficiency gains are lost. If this persists into 2030, cross-chain DvP costs could exceed $75 billion.

2. Privacy vs. Regulatory Transparency in DvP

Institutions need confidentiality for DvP transactions, while regulators require auditability. In multi-party DvP scenarios (issuers, investors, rating agencies, regulators, auditors), each party needs different visibility. No perfect privacy solution exists yet.

3. Regional Fragmentation of Regulatory DvP Frameworks

• EU: MiCA explicitly covers DvP standards across 27 countries
• US: DvP approval via case-by-case No-Action Letters, taking months
• Cross-border: faces jurisdictional conflicts

4. Oracle Dependency Risks for DvP Data Quality

Tokenized asset DvP workflows depend on off-chain data. If data providers are attacked or compromised, on-chain DvP may reflect incorrect realities. Chronicle’s asset proof framework offers some solutions, but risks remain.

Key Catalysts for DvP Flow in 2026

Major Catalysts

Ondo’s Solana DvP launch (Q1 2026):

• Testing retail-scale DvP distribution for sustainable flow creation
• Success indicator: over 100,000 holders demonstrating real DvP demand

Canton’s DTCC MVP launch (H1 2026):

• Validating blockchain’s feasibility for US Treasury DvP settlement
• Success could shift trillions of dollars in DvP flows on-chain

US CLARITY Act passage:

• Providing clear regulatory framework for DvP settlement
• Enabling hesitant institutions to deploy capital

Centrifuge Grove’s $1B DvP deployment:

• Completing full institutional credit DvP cycle in 2026
• Smooth execution without credit events will boost asset managers’ confidence in on-chain DvP

Market DvP Scale Forecast

By 2030: Tokenized assets reach $2-4 trillion, requiring 50-100x growth in DvP volume

This demands:

• Continued regulatory stability
• True readiness of cross-chain DvP interoperability
• No major institutional DvP failures

DvP Flow Growth by Sector

• Private credit: from $2-6 billion → $150-200 billion (highest growth, small base)
• Tokenized government bonds: if money market funds migrate on-chain, potential DvP volume exceeds $5 trillion
• Real estate: estimated at $3-4 trillion (depending on blockchain-compatible property registries)

Milestone of Hundreds of Billions in DvP Assets

Expected timeframe: 2027-2028

Flow distribution forecast:

• Institutional credit DvP: $30-40 billion
• Government bonds DvP: $30-40 billion
• Tokenized stocks DvP: $20-30 billion
• Real estate/commodities DvP: $10-20 billion

This requires 5x current DvP volume. While ambitious, given the momentum in late 2025 and upcoming regulatory clarity, it’s within reach.

Why These Five Protocols Matter for DvP Infrastructure

Early 2026 institutional RWA landscape reveals an unexpected trend: no single winner, because no single DvP market exists.

This is precisely how infrastructure should evolve.

DvP Specializations of Each Protocol

• Rayls → Bank-grade privacy DvP channels
• Ondo → Retail tokenized asset DvP distribution
• Centrifuge → Asset manager’s on-chain DvP hub
• Canton → Wall Street counterparty-level private DvP
• Polymesh → Protocol-native atomic securities DvP

From $8.5B in early 2024 to nearly $20B in early 2026, the market size proves demand exceeds speculation—institutions are deploying capital through real DvP flows.

Core DvP Needs of Institutions

• Finance managers: Achieve yield and operational efficiency via DvP
• Asset managers: Use on-chain DvP to reduce distribution costs and expand investor base
• Banks: Require compliant DvP infrastructure aligned with regulations

The Next 18 Months: The DvP Decisive Period

• Ondo’s Solana DvP: scaled retail DvP flow test
• Canton’s DTCC MVP: institutional settlement capability proof
• Centrifuge Grove: real capital deployment for credit tokenization DvP
• Rayls’ $1B AmFi target: privacy DvP adoption test

Execution beats architecture; results beat blueprints. This is the key focus now.

Final Verdict: DvP Infrastructure Will Define the Next Decade

Traditional finance is undergoing a long-term on-chain DvP migration. These five protocols provide the foundational infrastructure needed: privacy layers, compliance frameworks, and atomic DvP settlement.

Their success will determine the future of tokenization—whether as an efficiency tool integrated into existing financial structures or as a new paradigm replacing traditional intermediaries.

The infrastructure choices made by institutions in 2026, especially regarding DvP channels, will shape industry dynamics for the next ten years.

DvP Milestones to Watch in 2026

• Q1: Ondo Solana launch, 98+ stocks go live via DvP
• H1: Canton DTCC MVP launch, US Treasury DvP settlement on-chain begins
• Full Year: Centrifuge’s $1B DvP deployment; Rayls’ privacy DvP flow development via AmFi ecosystem

Trillions of dollars in DvP assets are about to migrate.