Key takeaways
- BlackRock’s BUIDL fund on Ethereum leads the $2 billion tokenized US Treasury market.
- Aave and Sky explore integrating tokenized US Treasuries into stablecoin ecosystems.
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Tokenized U.S. Treasuries surpassed $2 billion market cap threshold on Aug. 26, according to RWA.xyz dataThe platform tracks the size of U.S. Treasuries, bonds and cash equivalents.
This sector has seen growth of 164% in 2024, after starting the year with a value of $769 million. Most of this increase can be attributed to BlackRock’s efforts in the tokenization sector, as they launched the BUIDL fund on March 20.
BUIDL allocates its assets across cash, US Treasuries and repurchase agreements, with its shares trading at $1. The fund was deployed on Ethereum and is the largest by market cap, approaching $510 million.
With the deployment of BUIDL on Ethereum, the network has become the largest infrastructure in the tokenized US Treasury bond market, with a size of $1.46 billion.
This slot was previously held by Stellar, as most of the shares of Franklin Templeton’s FOBXX tokenized fund were issued using its blockchain. FOBXX is the second-largest tokenized fund in the United States, with a market cap of $428 million.
It is worth noting that Ondo’s USD yield is the highest in terms of number of holders, as 4,240 investors are interacting with its USDY token. Additionally, the size of USDY recently surpassed $347 million, giving it the spot as the third-largest tokenized fund.
Bridges to DeFi
Aave Laboratories propose an update to the GHO Stability Module (GSM) on August 26 to include the use of BUIDL actions in its ecosystem.
GSM is a feature implemented on the GHO stablecoin this year, which allows seamless exchanges between Aave’s token and the USD Coin (USDC) and Tether USD (USDT) stablecoins.
Thus, the new GSM would add the ability to the smart contract to exchange users’ USDC for BUIDL shares, thereby granting exposure to the fund’s daily profitability and diversifying GHO’s underlying assets.
The proposal is still in the “temperature-taking” phase, where members of the governance give their opinion on the content of the text.
Additionally, the use of real-world assets (RWA) such as tokenized US Treasuries in decentralized protocols is also being explored by MakerDAO, which rebranded as Sky today.
As part of its Endgame, Sky aims to add RWA to its basket of assets to help maintain the stability of its Sky Dollar (USDS) stablecoin.
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