Litecoin (LTC) Founder: "Tokenization Craze, 99% is Hype"...Is the Bubble About to Burst?

▲ Real World Asset Tokenization (RWA)/AI Generated Image

Litecoin (LTC) founder Charlie Lee has publicly criticized the tokenization craze. Despite the growth of the Real World Asset (RWA) tokenization market on Ethereum (ETH) and XRP Ledger, concerns about market overheating are growing again.

According to crypto news outlet Coingape on June 20 (local time), Lee stated on Coingape's Voice of Web3 podcast that "99% of tokenization is hype and not useful." This statement raises questions about the trend of putting real estate, stocks, and bonds on the blockchain.

Coingape reported that Lee's remarks came amidst the growth of the real-world asset market on Ethereum and XRP Ledger. Ethereum has recorded over $203 billion in total asset value in the tokenized asset market. The XRP Ledger has seen over $3.6 billion in tokenized asset value, with net inflows of approximately $1.9 billion in the last 90 days.

Lee cited real estate tokenization as an example, pointing out that blockchain records are unlikely to be the ultimate proof of actual ownership. Lee stated, "The true source of truth is government ledgers." He then questioned, "If the source of truth is not the blockchain, what's the point?"

Lee also stated that tokenization does not automatically create liquidity. He said, "Liquidity arises from demand. Putting something on the blockchain does not automatically generate liquidity."

Lee acknowledged that some tokenization projects could be useful. However, he believes that most projects have not yet proven the necessity of decentralization. Coingape reported that this warning comes as exchanges and blockchain networks compete to bring stocks, bonds, government bonds, and real estate on-chain.

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