Most people still picture tokenization as “putting the asset on a blockchain.” A U.S Treasury bond, a building, a single invoice, suddenly turned into a token. That’s not how the best RWA products work today. When you see Treasury‑based RWA tokens, you’re rarely buying a shard of a specific bond; you’re buying financial rights of a regulated fund or money market vehicle that holds those bonds. And that distinction is exactly why tokenized funds fit crypto’s rails—and why they outperform asset-level representation for on‑chain users.

Tokenizing Funds vs Asset-Level Representation

Tokenizing funds is when instead of tokenizing the asset itself (e.g., a Treasury bill), you tokenize a fund/share class that holds those assets (e.g., an MMF, ETF, feeder).

Asset-level representation is to put the real-world asset itself directly on-chain (e.g., tokenize a single T-bill, loan, or piece of real estate).

Asset-level tokens sound pure but may behave poorly. A token tied to one house, one invoice, or one bond inherits all of the off‑chain mess: custody chains, valuation disputes, local legal constraints, and settlement friction. Each tokenized asset must be individually issued, tracked, in the custody, audited. Each asset-level token may require bespoke legal structuring, unlike standardized fund wrappers. Many jurisdictions lack frameworks for direct digital ownership of government bonds, property, or loans. There’s rarely a deep market, so price discovery is weak and liquidity thin.

The result? You end up holding a digital certificate that looks cool in a wallet but hardly moves well through money legos.

Funds are the right abstraction layer

Funds were designed to pool risk, simplify operations, and standardize pricing. Translating that model to crypto means a token that represents a share of a diversified, professionally managed portfolio with a clear NAV and defined liquidity windows. Suddenly the token is useful: easy to value, fast to settle, and composable across DeFi protocols.

That’s why real-world momentum is in tokenized MMFs and tokenized fund units—not in atomized single-asset representations. In the U.S., on‑chain MMFs surpassed $7B by mid‑2025, and the CFTC’s Global Markets Advisory Committee has recommended accepting tokenized MMF shares as eligible collateral in derivatives markets—a strong signal of institutional confidence in fund-based tokens.

What this unlocks for on‑chain investors

Web3 investors need a product that performs and plugs into DeFi. Tokenized funds do that:

• Yield + Liquidity: NAV‑based liquidity, flexibility to customized different yield profiles and durations based on underlying fund design
• Accessibility to real yield: portfolios that were gated by minimums and distribution walls become reachable from a wallet.
• Diversification: one token, many positions, such as, loans, bills, short‑term paper.
• DeFi composability: clean pricing and predictable behavior make these tokens usable as collateral, treasury assets, or building blocks across protocols.

If you already rotate between stables, T‑bill trackers, and safer DeFi venues, fund tokens are the logical next step: real underlying, programmatic access.

Where the design gets interesting: Funds as Flexible Vehicles

A fund isn’t just a wrapper, it’s a flexible vehicle that can be designed to meet different investor needs. That’s why fund-level tokenization is so powerful: the structure itself can be shaped around yield, liquidity, risk appetite, or distribution strategy.

Take high-yield Southeast Asian bond portfolios or money market funds as examples. In traditional form, they are often restricted to local institutions. As tokenized funds, they can be designed for global wallets, offering diversified exposure, NAV-based transparency, and programmable redemption rules.

Funds can pool sovereign bills, short-term corporate paper, or structured credit and still provide clean pricing, diversification, and accessible entry points. On-chain distribution amplifies this flexibility, allowing investors to rotate capital more easily, align with risk preferences, and tap differentiated strategies with just a few clicks.

This is what makes tokenized funds compelling: not only higher yields in select markets, but the adaptability of the fund model itself to serve a wide spectrum of investors.

Why Pruv Finance

At Pruv Finance, we combine deep market insight with regulatory know-how, working hand-in-hand with licensed partners to bring real-world assets on-chain in a secure, efficient way. The result? Web3-native investors gain access to more diverse, high-quality investment portfolios powered by Asia’s economic momentum and tokenization-ready infrastructure.

Pruv Finance is assembling the rails on top of that foundation, starting with tokenized private credit, private equity, and money market funds, so Web3‑native investors can tap APAC’s yield and regulatory momentum directly from a wallet.

The goal isn’t to mirror TradFi; it’s to make high‑quality fund exposure feel native to DeFi: liquid, auditable, and composable.

We’ll be blunt: some DeFi yields are still unstable; some RWA plays are still opaque. Tokenized funds are neither. They’re transparent, auditable, and designed to move. If you’re already on‑chain and already hunting yield, this is the way to step beyond basic stablecoin parks without inheriting the fragility that burned the last cycle.

Tokenized funds aren’t a compromise. They’re the on-chain building block that finally lets real-world yield behave like crypto. Ready to plug in?