Tokenized U.S. Treasury market grows 600 percent to reach $698 million

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According to data retrieved by CoinDesk, the tokenized U.S. Treasury market has surged almost 600 percent to reach $698 million.

RWA monitoring platform RWA.xyz co-founder Charlie You attributes the boom, an increase of sevenfold from around $100 million at the beginning of the year, to new entrants in the space and the growth of existing platforms.

“The trajectory of tokenized US Treasuries illustrates a growing market,” said You.

You pointed out that established protocols like Ondo Finance, Maple and Backed experienced significant growth in the past few months. Additionally, newly launched protocols in September, such as Tradeteq and TrueFi’s Adatp3r offering, attracted deposits of $4.5 million and $8.5 million, respectively.

You noted that Ethereum (ETH) had recently surpassed the Stellar (XLM) network in the value of on-chain Treasury tokens. Additionally, later entrants such as Polygon (MATIC) and Solana (SOL) had collectively attracted over $40 million in assets, demonstrating a diversifying blockchain landscape for tokenized assets.

CoinDesk highlighted that crypto investors are attracted to tokenized treasuries and other tokenized assets as they seek the potential for higher returns, particularly in the face of rising global interest rates and decreasing decentralized finance yields. Investment firm 21.co has predicted that the market for tokenized assets could reach $10 trillion by the end of the decade.

Ethereum remains top in DeFi

Ethereum has remained the top smart contracts network, as reported by blockchain analytics protocol DeFiLlama.

The Proof of Stake (PoS) mechanism on the Ethereum blockchain fueled substantial growth in crypto Total Locked Value (TVL), drawing in more than 75 percent of funds for Decentralized Finance (DeFi) activities. Ethereum, with its established ecosystem for dApps and smart contracts, pioneered the use of smart contracts.

DeFiLlama reported that Ethereum had over $22 billion locked in cryptocurrencies, surpassing the TVL of ten counterparts combined. However, Ethereum also experienced a significant increase in decentralized exchange (DEX) trading volumes.

In the past week, the network processed more than $9 billion in transactions, the highest weekly volume since mid-June. This increased activity was also reflected in the substantial rise in user numbers, with an average of 320,000 users accessing the network in the past week.

As more users joined, the number of transactions increased, leading to higher transaction fees. On October 25, the network collected over $6 million in fees, the highest in almost two months. Shortly after, they deposited 16,313 ETH, equivalent to nearly $29 million at current market prices, into leading lending protocols to earn interest.

DeFi TVL reaches three-month high

In the past two weeks, the total value locked in DeFi protocols went from $35.8 billion to a three-month peak of $42 billion. Just a fortnight ago, it had hit its lowest point since February 2021, according to DeFiLlama’s data.

This revival in the DeFi market has been attributed to a couple of key factors — the overall positive sentiment in the crypto market and the growing acceptance of DeFi protocols.

As the prices of major cryptocurrencies like Bitcoin and Ethereum increase, they lift the entire crypto market, including DeFi. Then, more investors are recognizing DeFi as a viable alternative to traditional financial systems, drawing increased capital into various protocols and boosting transaction volumes.