You could create seizable assets if you find a way to create a legal framework that allows you to hold and transfer physical or intellectual property via NFTs. If you could own the copyright to an ape picture, instead of an NFT with the URL to an ape picture, it could be actually worth something.

Trading physical property as NFTs would create a lot of possible applications. I always thought that trading-property-as-NFTs and the insurance market would be the most interesting applications for DeFi.

If stocks and bonds were allowed to be traded as digital NFT-like contracts than true settlement could be completed in ~minutes rather than ~days.

Swaps aren't very large? It's very easily a trillion-dollar market even without the misleading quoting of notional as market size.

Where does this number come from?

Here's one source: https://www.bis.org/publ/otc_hy2111.htm

Reports notional as in the hundreds of trillions and market value over ten trillion.

Unless I'm misreading you and you're talking about defi swaps? Though surely the analagous tradfi market shows the potential there.

These are credit default swaps. I don't know if they are implementable as smart contracts (I don't think so, but I could be wrong). I was thinking about overcolateralised DeFi loans which can be seen as a kind of swap where two parties exchange the returns of two different assets.