From DeFi To TradFi : Where Is On-Chain Capital Moving?
U.S. Treasuries
The supply of tokenized U.S. Treasuries has surged to $15.3 billion, driven by prominent assets such as USYC, BUIDL, and USDY. This growth reflects a strategic shift where investors prioritize on-chain liquidity and stable yields from government debt over idle stablecoin holdings. While traditional DeFi total value locked has declined by approximately 54% from recent peaks, the RWA market capitalization has expanded by over 550% since 2025. This divergence is largely attributed to falling crypto-native yields and the declining price of major assets like ETH, which has pushed capital toward lower-risk, yield-bearing alternatives. Tokenized Treasuries are increasingly functioning as a foundational collateral and liquidity layer for the broader on-chain ecosystem. As these instruments integrate deeper into lending and liquidity markets, they force DeFi protocols to compete directly with traditional financial yields. This transition marks a significant evolution in how on-chain capital is allocated, positioning tokenized assets as a primary driver of current market activity.
Key points
- ▸Tokenized U.S. Treasury supply reached $15.3 billion, led by USYC, BUIDL, and USDY.
- ▸RWA market capitalization has grown by over 550% since 2025.
- ▸DeFi TVL dropped approximately 54% from its recent peak due to lower yields.
- ▸Tokenized Treasuries are emerging as a core collateral layer for on-chain finance.
Background
Tokenized Treasuries are digital representations of short-term U.S. government debt issued on public or private blockchains. These assets allow investors to earn interest on sovereign debt while maintaining the ability to trade or use the tokens as collateral within decentralized finance applications. By bridging traditional financial yields with blockchain efficiency, they provide a stable alternative to volatile crypto-native assets.
Relevance
7.5/10