There has been a changing of the guard in the rankings of the $3.4 billion tokenized Treasury bond market.
Asset manager Hashnote’s USYC token has surged more than $1.2 billion in market capitalization, quintupling in size over the past three months, data from rwa.xyz shows. It has toppled the $450 million BUIDL, issued by asset management giant BlackRock and tokenization firm Securitize, which was the largest product by size since April.
USYC is the symbolic representation of the Hashnote International Short Duration Yield Fund, which, according to the company’s website, invests in reverse repurchase agreements on U.S. government-backed securities and Treasury bills held in custody at the Bank of New York Mellon.
Hashnote’s rapid growth underscores the importance of interconnecting tokenized products with decentralized finance (DeFi) applications and presenting its available tokens as building blocks for other products (or composability, in crypto jargon) to scale and achieve broader 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 real-world asset-backed yield-generating stablecoin, USD0.
Usual is seeking market share from centralized stablecoins like Tether’s USDT and Circle’s USDC by redistributing a portion of the revenue from the backing assets of its stablecoins to holders. Currently, USD0 is 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 based on BUIDL.
“The bull market triggered a massive influx of stablecoins, but the core problem with the largest stablecoins remains: they lack rewards for end users and don’t give access to the yield they generate,” said David Shuttleworth, partner at Anagram. “In addition, users do not gain access to the protocol’s capital by holding USDT or USDC.”
“The appeal of Usual is that it redistributes performance along with ownership of the protocol among users,” he added.
The protocol, and therefore its $0 stablecoin, has raised $1.3 billion in recent months as cryptocurrency investors search for on-chain yield opportunities. Another major catalyst for growth was the airdrop and listing of the protocol’s governance token (USUAL) on Wednesday. USUAL began trading on Binance on Wednesday and has largely outperformed the broader shaky crypto market, appreciating around 50% since then, according to data from CoinGecko.
BlackRock’s BUIDL also enjoyed rapid growth earlier this year, fueled by DeFi platform Ondo Finance, which made the token the key reserve asset of its own yield-generating product, the Ondo Short-Term US Government Treasuries token. (OUSG).
