Tokenized US Treasuries break $2 billion market cap barrier

Mila August 27, 2024

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Key Takeaways

BlackRock’s BUIDL fund on Ethereum leads the $2B tokenized US Treasuries market.
Aave and Sky explore integrating tokenized US Treasuries with stablecoin ecosystems.

Tokenized US Treasuries surpassed the $2 billion market cap threshold on Aug. 26, according to RWA.xyz’s data. The platform tracks the size of US treasuries, bonds, and cash equivalents.

This sector registered 164% growth in 2024, after starting the year sized at $769 million. Most of this boost can be linked to BlackRock’s efforts in the tokenization industry, as they launched the BUIDL fund on Mar. 20.

BUIDL allocates its assets to cash, US Treasury bills, and repurchase agreements, with its shares priced at $1. The fund was deployed on Ethereum and is the largest by market cap, inching closer to $510 million.

As a result of BUIDL being deployed on Ethereum, the network became the largest infrastructure on the tokenized US Treasuries market, with $1.46 billion in size.

This spot previously belonged to Stellar, as most of Franklin Templeton’s tokenized fund FOBXX shares were issued using its blockchain. FOBXX is the second largest tokenized fund in the US, with $428 million in market cap.

Notably, Ondo’s US Dollar Yield is the largest by holder count, as 4,240 investors are interacting with its USDY token. Additionally, the USDY size surpassed $347 million recently, granting it the spot as the third-largest tokenized fund.

Bridges to DeFi

Aave Labs proposed an update to the GHO Stability Module (GSM) on Aug. 26 to include the usage of BUIDL shares in its ecosystem.

The GSM is a feature implemented to the GHO stablecoin this year, which grants seamless swaps between Aave’s token and the stablecoins USD Coin (USDC) and Tether USD (USDT).

Sapphire

Thus, the new GSM would add the possibility to the smart contract of swapping users’ USDC for BUIDL shares, granting exposure to the fund’s daily rentability and diversifying GHO’s underlying assets.

The proposal is still in the “temperature check” phase, where governance members give their insights into the text’s content.

Moreover, the usage of real-world assets (RWA) such as tokenized US Treasuries in decentralized protocols is also being explored by MakerDAO, which rebranded to Sky today.

As a part of its Endgame, Sky aims at adding RWA to its asset basket to help maintain the stability of its stablecoin Sky Dollar (USDS).