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

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

Charlie Lee, the founder of Litecoin (LTC), 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 media 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 these remarks came amidst the growth of the real-world asset markets on Ethereum and XRP Ledger. Ethereum has recorded over $203 billion in total value of tokenized assets. The XRP Ledger has seen over $3.6 billion in tokenized asset value and a net inflow 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 said, "The real source of truth is government ledgers." He then asked, "What's the point if the source of truth isn't the blockchain?"

Lee also stated that tokenization does not automatically create liquidity. He said, "Liquidity only arises when there is demand. Putting something on the blockchain does not automatically create liquidity."

Lee acknowledged that some tokenization projects could be useful. However, he believes that most projects have not yet proven the need for 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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