DeFi killed tokenization, but ProFi is bringing it back | Opinion

In the 1840s, thousands of investors funded unproven rail lines during the Great British Railway Mania because they believed the steam engine was an overnight breakthrough. And it was. But what followed was an enormous market crash based on the fact that the tracks were still disconnected, built in isolation from each other, and lacked the standardization needed for interoperability. It wasn’t until the government stepped in and managed the railways at a national level that this was resolved. This is exactly what happened in decentralized finance, or DeFi.

Investors and developers built DeFi protocols in isolation from one another, leading to fragmented liquidity and assets that cannot be moved easily from one chain to another. They built exceptional tracks, but these do not work well together. What we are now witnessing, as a result, is the start of a new era of government involvement in the sector, synthesising law, code, assets, and capital into sovereign-grade blockchain rails capable of unlocking trillions in value. We call this programmable finance, or ProFi. 

The institutional disconnect 

Leaders in the web3 space have consistently argued that institutions were simply too slow or legacy-driven to adopt digital assets. However, in reality, governments and large companies are not famous for building on rocky foundations. The structural limitations of early blockchains were their lack of sovereign alignment — a permissionless ledger could be a powerful tool for quickly transferring value across the globe, but it does not work for regulating the ownership of national assets. 

No government will ever concede control of its essential assets, such as homes, commodities, or bonds, to a market it does not control. As such, companies wanting to work within the confines of the law have had to be naturally conservative about bringing their assets on-chain. 

A token without legal alignment is just a digital shadow. To a serious investor, holding a tokenized asset on an unregulated chain is comparable to holding a blank deed. They do not seek a workaround to the law, but rather the protection of it.

Tokenization pilots

For years, the tokenization of real-world assets was where good ideas got derailed by un-compliant execution. A graveyard of high-profile tokenization projects backed by the world’s largest institutions failed. 

The Australian Securities Exchange’s $250 million tokenization project failed because it couldn’t adhere to the market’s non-functional requirements and existed in a regulatory vacuum. IBM and Maersk’s platform TradeLens failed because it operated as a private venture without government involvement, where competitors were reluctant to cede control of their valuable data. Private real estate tokenization wasn’t integrated with National Land Registries and was illegally invisible to courts. When disputes arose or platforms failed, investors found themselves holding “digital shadows.”

The list goes on. These projects, typically built on permissionless blockchains, operated in a regulatory vacuum. They were platforms attempting to bring entire industries onto a single, privately-controlled ledger without Sovereign oversight. 

With Standard Chartered forecasting a $30 trillion market for tokenized assets by 2034, the industry is moving aggressively away from speculative projects. Compliance is no longer a retrospective task but the very infrastructure that tokenization runs on. This is what BlackRock CEO Larry Fink describes as the repotting of TradFi assets into a digital ecosystem, a transition that only ProFi can facilitate by providing the necessary order of operations for global finance.

Enter ProFi 

The past two decades have defined digital transformation as the migration of paper records to static databases. While this made processes faster, it failed to make them smarter. We are now entering the programmable economy where the asset itself holds intelligence. The true evolution is not moving records to a ledger, but authoring the technical standards that govern how assets are created, transferred, and settled at the protocol level. 

This is where sovereigns can translate their rulebooks into executable code. They can ensure their national assets, ranging from energy infrastructure to real estate, stay protected under local jurisdiction while still attracting global capital through a unified, regulator-native stack. This is programmable finance. 

ProFi solves what DeFi could not. It replaces fragmented liquidity with unified settlement rails. It substitutes regulatory ambiguity with enforceable compliance at the protocol level. It trades speculative hype cycles for institutional-grade infrastructure that can withstand market stress. Where DeFi is built in isolation and collapses under pressure, ProFi builds with sovereign alignment and compounds trust.

The current leader of the ProFi race

Wall Street is replete with tokenized ETFs, but a more profound revolution is unfolding in developing economies, particularly across the Middle East. Nations are finally unlocking the ability to monetize their entire balance sheets through the construction of sovereign real-world asset rails, effectively upgrading the operating system of their entire national economy into programmable finance. 

Saudi Arabia has just started approving tokenization at the government level, leading to an explosion of multi-billion-dollar projects. Major real estate projects are already being tokenized, including a 10 million square meter industrial zone, numerous premium Riyadh skyscrapers, and master-planned communities. Energy giant EDF is also looking to tokenize the Kingdom’s massive energy infrastructure, from utility-scale solar and wind farms to thermal power plants.

At the government level, Saudi Arabia is transforming its real estate into a liquid and programmable asset class for global institutions, all while ensuring the national registry remains under absolute sovereign authority. This sovereign moat creates trust where doubt lingers, and turns blockchain from a tool of disruption into a tool of national alignment. Now, Saudi Arabia sets its sights on achieving Vision 2030 and tapping into the tokenization of numerous asset classes across its economy.

Whilst other jurisdictions are making progress, none have approached tokenization at the sovereign level quite like how Saudi Arabia has. And this approach has led to an explosion of RWA tokenization in the nation, proving that programmable finance is the catalyst needed to make tokenization truly work.

With ProFi, tokenization is set to explode at record levels. The infrastructure makes the entire pipeline compliant, liquid, and programmable from day one. When an institution can tokenize an asset with the knowledge that that token will carry the same legal weight as its TradFi alternative, and a government can tokenize its assets without ceding its sovereignty, everyone’s needs are met. Whilst Saudi Arabia is leading the charge, other jurisdictions will quickly follow.