Decentralized finance is getting some help from the real world after the meltdown in crypto has led to months of stagnation.

More blockchain projects are attempting to sell hard assets including US Treasuries, currencies and even private equity.

Whereas crypto-focused DeFi could once offer triple-digit returns in an era of ultra-low interest rates, the tables have turned. More favorable yields can be found in the relative safety of traditional markets. And advocates of DeFi — in need of new capital — are considering their options after a string of setbacks, including this week’s regulatory pushback on a Binance-branded stablecoin.

“The overall higher interest-rate environment in traditional finance and the lack of comfortable yields available in crypto, in general, makes people more interested in taking advantage of favorable yields in Treasuries and bonds,” said Jake Dwyer, managing director and head of venture at GSR, a digital-asset trading firm.

Change is needed with investors’ declining appetite for risk ahead of a possible recession and after last year’s multiple crypto blowups including the algorithmic stablecoin TerraUSD. DeFi trading volume has more than halved from a high last year and the value of its related tokens — once the hottest sector of crypto — has been stagnant for months.

Chasing higher returns, DeFi protocol MakerDAO invested $500 million in Treasuries and corporate bonds late last year. Ondo Finance launched a fund in January allowing stablecoin holders to also invest in bonds and Treasuries. Meanwhile, advocates have been looking for opportunities in currencies and have praised efforts to “tokenize” investment funds by KKR & Co., Apollo Global Management Inc. and Hamilton Lane Inc.

“This is the year of tokenization and the year of institutionalization of DeFi,” said Colin Butler, global head of institutional capital at Polygon Labs, Hamilton Lane’s partner on its tokenized fund.

Tokens of real-world assets have the ability to capture efficiency gains and reduce reliance on third parties, according S&P Global Inc. But it’s not without its drawbacks, the firm wrote in a Feb. 7 report.

“The concept of DeFi securitizations raises some fundamental risks, in particular legal risks, operational risks, and the potential mismatch between fiat currency assets and digital currency liabilities,” S&P Global wrote.

The tokenization of real assets is nothing new, but it has mainly appealed to a narrow audience of investors with limited access to dollars. For them, it can be easier to buy dollar-pegged stablecoins like USDC than open a US-dollar account with a traditional bank. DeFi has about 1,498 private credit loans worth $4.2 billion, according to the data site RWA.XYZ.

Moreover, real-world asset loans require significant structuring and diligence, said Aaron Collett, a contributor at Goldfinch, a decentralized credit project. This includes verifications such as Know-Your-Customer and U.S. investor accreditation processes, which Goldfinch requires.

US regulators are also working on a proposal to make it harder for crypto firms to be considered “qualified custodians” in order to hold client assets for money managers.

The lack of a regulatory framework is big hurdle, said Andre Cronje, a core contributor at Fantom Foundation, the developer of Fantom blockchain.

Tokenizing hard assets almost always includes some components that are not conducted on blockchains, such as the custody of tokenized versions of an asset. Without clear legislation, custody firms are discouraged from supporting DeFi initiatives, Cronje said.

Read more: DeFi’s Inability to Declare Victory Exposes Its Many Problems

“That’s why I think [we] are probably at least another two or five years away” from DeFi taking off, Cronje said.

In the meantime, the industry will either need to get risk-free assets to blockchain or convince investors to embrace “a broken crypto ecosystem,” said Austin Campbell, an adjunct professor at Columbia Business School.

With interest rates as high as they are, crypto-focused DeFi is asking investors to take on all the risk, including hacks, for a return potentially lower than a US Treasury bill, he said.

This article was provided by BLoomberg News.