The Tokenized U.S. Treasury market has experienced a remarkable surge, expanding almost sevenfold in 2023 to reach $698 million by Monday, compared to its starting point of around $100 million at the beginning of the year. The growth has been fueled by intensified competition among investment options and blockchain platforms. According to RWA.xyz, a real-world asset (RWA) monitoring platform, this significant expansion is attributed to both new entrants into the market and the substantial growth of existing platforms.
Critical data from RWA reveals substantial growth for established protocols like Ondo Finance, Maple, and Backed in recent months. Additionally, new protocols launched in September, such as Tradeteq and TrueFi’s Adatp3r, have attracted noteworthy deposits of $4.5 million and $8.5 million, respectively.
The Ethereum (ETH) network has surpassed Stellar (XLM) in the on-chain value of Treasury tokens, indicating Ethereum’s dominance in this space. Meanwhile, newer entrants Polygon (MATIC) and Solana (SOL) have collectively attracted over $40 million in assets, reflecting a diversified blockchain landscape for tokenized assets, as noted by Charlie You, co-founder of RWA.xyz.
The article highlights the emergence of permissionless yield-bearing stablecoin alternatives as a fresh avenue for tokenization. Notably, Ondo Finance introduced its USDY token, and Mountain Protocol unveiled USDM. These alternatives distinguish themselves from leading stablecoins like Tether’s USDT and Circle’s USDC by directly passing on the yield earned from the backing assets.
Tokenization of Treasuries initially led the effort to bring real-world assets onto blockchain platforms. Crypto investors are increasingly drawn to these offerings to capture higher returns, significantly as global interest rates rise while decentralized finance yields decline. Investment firm 21.co predicts that the market for tokenized assets could potentially reach $10 trillion by the end of the decade.