There has been a changing of the guard in the ranking of the $3.4 billion tokenized Treasury market.
The market capitalization of asset manager Hashnote’s USYC token has surpassed $1.2 billion, a five-fold increase over the past three months, according to data from rwa.xyz. It toppled the $450 million BUIDL, issued by asset management giant BlackRock and tokenization firm Securitize, which had been the largest product by size since April.
USYC is the token representation of the Hashnote International Short Duration Yield Fund, which, according to the company’s website, invests in reverse repurchase agreements of U.S. government-guaranteed securities and Treasury bonds held at the Bank of New York Mellon.
Hashnote’s rapid growth highlights the importance of interconnecting tokenized products with decentralized finance (DeFi) applications and presenting their available tokens as building blocks for other products – or composability, in crypto lingo – to scale and achieve wider adoption. It also shows crypto investors’ appetite for yield-generating stablecoins, which are increasingly backed by tokenized products.
USYC, for example, has benefited greatly from the rapid rise of nascent decentralized finance (DeFi) protocol Usual and its yield-generating stablecoin backed by real assets, $0.
Usual is chasing the market share of centralized stablecoins like Tether’s USDT and Circle’s USDC by redistributing a portion of the revenue from its stablecoin’s backing assets to holders. USD0 is currently primarily backed by USYC, but the protocol aims to add more RWA to reserves in the future. It recently announced the addition of Ethena’s USDtb stablecoin, which is built on BUIDL.
“The bull market has triggered a massive influx of stablecoins, but the main problem with the largest stablecoins remains: they lack rewards for end users and do not provide access to the yield they generate,” said David Shuttleworth, partner at Anagram. “Additionally, users do not have access to protocol equity by holding USDT or USDC.”
“The usual appeal is that it redistributes yield as well as ownership of the protocol to users,” he added.
The protocol, and thus its $0 stablecoin, has raised $1.3 billion in recent months as crypto investors searched for on-chain yield opportunities. Another significant catalyst for growth was the airdrop and exchange listing of the protocol’s governance token (USUAL) on Wednesday. USUAL began trading on Binance on Wednesday and has significantly outperformed the broader crypto market, appreciating around 50% since then, according to CoinGecko data.
BlackRock’s BUIDL also saw rapid growth earlier this year, driven by DeFi platform Ondo Finance, making the token the key reserve asset of its own yield-generating product, the Ondo Short-Term US Government Treasuries Token ( OUSG).
