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Which Stand to Benefit Most From the Tokenization Wave and What Are the Risks?
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Standard Chartered's framework points to well-established DeFi protocols with strong risk metrics, proven governance structures, and conservative operational frameworks as the primary beneficiaries of the tokenization wave Kendrick is forecasting. The reasoning is straightforward: institutional investors moving large amounts of capital on-chain will not deploy it through unaudited or newer protocols where the risk of smart contract failures, governance attacks, or liquidity crises is higher. They will gravitate toward platforms with track records, transparent risk management, and the professional governance infrastructure that gives treasurers and compliance teams the confidence to park significant capital. Protocols that have operated through multiple market cycles without major failures are positioned very differently from newer entrants in this context.
The risks are concentrated at the other end of the spectrum. Newer or less thoroughly audited protocols that attract institutional inflows based on yield incentives rather than proven infrastructure could face sharp drawdown events if those inflows stress their systems beyond what they were designed to handle. The CLARITY Act, which Polymarket traders currently price at around 64% odds of passing in 2026, is flagged by Kendrick as the next major regulatory catalyst that could accelerate institutional migration into on-chain lending rails by providing the legal clarity large institutions require before committing capital at scale. If the legislation passes and institutional treasurers begin parking tokenized funds inside open lending venues in meaningful volume, it would confirm Kendrick's framework and mark the moment DeFi transitions from primarily a speculative trading venue into genuine institutional infrastructure, a shift that would have profound implications for how the protocols enabling that transition are valued.
