The rise of blockchain technology has transformed digital finance, with decentralized finance (DeFi) enabling permissionless, transparent financial services like lending, trading and saving. While DeFi has largely focused on crypto-native assets, a new frontier is emerging through the tokenization of real-world assets (RWA), bringing assets like bonds, commodities and real estate onchain. This bridges traditional finance and DeFi, unlocking liquidity, fractional ownership and programmable yield. Despite benefits such as transparency, and accessibility, RWA tokenization introduces new risks such as legal, custodial and ownership risks. As infrastructure and regulation mature, tokenized RWA could significantly expand DeFi’s impact on global finance.