In our last article, we explained the basics for understanding the onchain economy - its meaning, key components, and the foundational infrastructure required for its operation. Now, we delve deeper into the key areas that will shape its future trajectory.

1. Demand and Participation: The Engines 

The vitality of any economy hinges on participation and demand. In the onchain realm, these are being fueled by:

• Assets such as Tokenized RWAs (Demand): From real estate and commodities to potentially even equities, tokenization fractionalizes ownership, lowers barriers to entry, and enhances liquidity. An earlier collaborative forecast by BCG and Ripple anticipates the total market value of tokenized real-world assets reaching $18.9 trillion by 2033. Kraken also partners with Backed, issuer of tokenized stocks, to soon offer tokenized versions of popular US listed stocks and ETFs to clients in select non-US markets on Solana. This increased accessibility will naturally drive greater participation from a wider pool of investors seeking exposure to diverse asset classes within the onchain environment.
• TradFi Giants Moving Onchain (Participation): The increasing involvement of institutional investors is a significant indicator of the onchain economy's growing maturity. BlackRock's tokenized asset fund (BUIDL) has seen significant growth, surpassing $2.9 billion in assets under management (AUM), and the potential for more crypto ETFs following Bitcoin and Ethereum, such as SOL and XRP, demonstrate a growing appetite from larger players. Their entry brings substantial capital and credibility, further legitimizing and fueling the growth of onchain markets.

2. Onchain Financial Infrastructure: The Rails 

A robust infrastructure is paramount for the smooth functioning of the onchain economy:

• Future Financial Marketplaces: Onchain platforms like GRVT are emerging as crucial future financial marketplaces. These venues are evolving beyond simple token swaps to offer sophisticated functionalities. They act as venues for trading a wide range of digital assets, including tokenized RWAs and potentially onchain stocks. Furthermore, these platforms can empower users to deploy and subscribe to various investment strategies directly onchain, bridging the gap between institutional-grade tools and everyday investors. To achieve that, sensible regulation and compliance set the clarity and framework for wider growth.
• Stablecoins and Payment Structures: As the lifeblood of transactions, stablecoins and payment structures are crucial for onchain commerce and value transfer. Their growing circulation, now exceeding $230 billion, underscores their utility. Recent milestones, such as traditional American banks joining forces to build their own stablecoin infrastructure, signal a broader acceptance and integration of these digital currencies into mainstream finance. 
• Lending and Borrowing Protocols: Decentralized lending and borrowing platforms could play a key role in optimizing capital utilization onchain. They allow users to earn yield on their digital assets and access liquidity without traditional intermediaries. 

3. The Enabling Layer: The Groundwork for Scalable Growth

Several foundational elements are crucial for the onchain economy to scale and thrive:

• Clear and Sensible Regulatory Frameworks: Essential for building trust and widening adoption. The SEC’s clearer stance and guidance on issuance, custody, and trading will help fuel growth and healthy competition among industry players to come up with better solutions. It will also provide a more stable and predictable environment for both institutions and retail users to participate in the onchain economy.
• Technological Enablers - Interoperability: The onchain world has to break silos and function seamlessly to be truly “usable”. To do so, different blockchains and protocols need to be able to “communicate” effectively. Interoperability solutions will play a critical role to connect all tissues for functional asset movements across chains.
• Technological Enablers - AI: AI could be the accelerator of everything onchain, security, scalability, intelligence, efficiency, automation and so on. 

The onchain economy is a long adventure actively being discovered. By closely monitoring these key trends, we can get a better grasp of major indicators that are shaping the future of finance.