Arun Krishnakumar, Head of Institutional Growth at Kamino Finance
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Tokenizing real-world assets (RWAs) has shifted from a fringe experiment to one of crypto’s most credible bridges to traditional finance.
What began years ago as “security tokenization” now spans on-chain U.S. Treasuries, private credit, real estate, and even reinsurance yields, all aiming to give digital-asset natives familiar risk/return profiles without off-ramping.
As infrastructure matures, price oracles, on-chain proofs of reserve, and institutional-grade risk tooling, RWA tokenization is moving from proof-of-concept to everyday portfolio allocation.
Against that backdrop, CCN spoke with Arun Krishnakumar, Head of Institutional Growth at Kamino Finance, to unpack the evolution of RWA tokenization, the role of DeFi in bridging TradFi liquidity, and how the sector could withstand bear markets.
In this candid conversation, Arun didn’t hold back on what’s hype, what’s substance, and where Kamino sees the long-term play.
The Evolution of RWA Tokenization in 2025
When asked how RWA tokenization compares today versus 2023 and 2024, Krishnakumar didn’t hesitate to point out the sector’s biggest product-market fit: fiat.
“I think the biggest product market fit for tokenization has been fiat. And because of that, what you’re seeing is the stablecoin market booming. I remember saying at a Consensus panel that stablecoins are the new meme coins. Every single institutional issuer, or even a half-institutional issuer, could potentially launch a stablecoin. That to me is the best product market fit for this industry.”
With the U.S. Genius Act providing regulatory clarity, he believes the door is open for other asset classes to follow suit.
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Beyond Fiat: Where Tokenization Finds Its Next Growth
On where tokenization is headed beyond fiat, Krishnakumar described Kamino’s market-driven approach.
“It is not just Kamino’s decision. We don’t decide which assets to tokenize. It’s really the market telling us where the demand is.”
He pointed to hedge funds looking for liquid, low-risk assets and retail users chasing higher yields:
“After fiat, treasuries started to grow on-chain massively. But on Solana, the risk-free rate is about 6–7%. If you offer 3–4% on a treasury product, people don’t want to go big on that. For retail, though, higher-yield products, 8%, 9%, 10%, become attractive. That’s where options, structured yield products, and private credit funds come in.”
Liquidity Management: The Toughest Challenge
Liquidity remains one of the most debated challenges in RWA adoption. Krishnakumar stressed that tokenization alone doesn’t guarantee growth.
“Tokenization is just the beginning. You’re just getting your product into the on-chain market. The real question is: how do you then scale it? You have to split liquidity across DEXs, lending markets, and the fund itself. Thin DEX liquidity means low LTVs in lending markets. So liquidity planning is crucial from day one.”
He explained that looping mechanisms in DeFi amplify yields and attract volume:
“For a 10–12% yielding product, and if someone can borrow stablecoins at 6–7%, then you’ve got a 500 basis points spread. By looping, that 12% suddenly looks like 20%. That’s when the flywheel really kicks in.”
Transparency and Proof of Reserves in RWA
Transparency, particularly in RWA tokenization, is non-negotiable according to Krishnakumar.
“With RWAs, proof of reserve becomes a challenge. You need real-world price feeds driving LTVs, not just DEX liquidity. At Kamino, we work with Chainlink, who are market leaders in proof-of-reserve.”
He added that Kamino offers a public risk dashboard:
“We have a real-time risk dashboard where anyone can check all our positions sliced across 12 different risk dimensions—VaR, sensitivities, and scenario analysis. I don’t think any other DeFi platform has this level of transparency right now.”
Compliance and the Permissioned vs. Permissionless Debate
When it comes to compliance, Krishnakumar admitted that the RWA market is still experimenting.
“You see two types of assets: permissionless like USDC, and permissioned like treasuries or private credit funds where wallets must be whitelisted. The biggest experiment is figuring out if permissioned RWAs can scale. Out of our 1.7 million users, maybe 10% would KYC. That’s still 170,000, but will the network effects be the same? That’s the question.”
For Kamino, compliance is integrated into the firm’s DNA:
“It’s always a compliance conversation first. Once compliance says go, the risk team gets involved, then the tech team, then business and marketing. That’s our flow.”
RWA as a Bear Market Hedge
Unlike NFTs or the Metaverse hype cycle, Krishnakumar sees RWAs as bear-market resilient.
“I personally think bear markets might be better for RWAs. Imagine losing 70% on Bitcoin—why hold that? Exit early, put it into an RWA yielding 10–12%, loop it into 20%, and then get back into Bitcoin later. RWAs provide on-chain diversification that cushions volatility.”
The Future of DeFi and RWA: Portfolio Management On-Chain
Looking ahead, Krishnakumar sees RWAs reshaping how investors manage portfolios:
“I think we’ll see portfolio management on-chain, much like traditional asset management today. People will want to diversify exits into tokenized treasuries, gold, or CLOs without constantly off-ramping. What’s missing right now is discovery infrastructure. It’s very tribal. We need chain-agnostic discovery mechanisms for investors.”
Regarding Kamino’s five-year plan for RWAs, Krishnakumar was pragmatic.
“We don’t have five-year plans. Narratives change every five days in crypto. What I can say is our focus is on-chain credit. We are a credit house. Everything we build will be aligned around credit. Permissioned RWAs are a tough nut to crack, but that’s where we’re working.”
While the road ahead involves challenges around liquidity, compliance, and transparency, Kamino Finance appears determined to set standards in the space, balancing innovation with discipline.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
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