Pantera Capital's latest report, "The State of Tokenization Q1 2026," reveals that less than 3% of tokenized assets are genuinely on-chain. The report introduces the "Tokenization Progress Index" (TPI) to assess the maturity of 593 tokenized assets across 11 classes, highlighting that most assets remain digital representations of off-chain securities. The tokenized market has grown to $321.1 billion, yet the average TPI score is only 2.04 out of 5, indicating limited on-chain functionality. The report categorizes assets into three layers: Wrapper (77.6%), Hybrid (11.1%), and Native (2.7%). It emphasizes that the majority of tokenized assets function as traditional securities with blockchain receipts, lacking autonomous on-chain processes. Pantera outlines a four-stage roadmap for tokenization, urging institutions to move beyond superficial digital representations to leverage blockchain's full potential. The report concludes that true progress will come from redesigning financial products to utilize blockchain's unique capabilities, rather than merely replicating existing structures on-chain.