Crypto News – DAO Funding to Catapult Tokenized US Treasury Market to $3 Billion by Year-End

Crypto News – DAO Investments Forecasted to Propel Tokenized US Treasury Market to $3 Billion

Crypto News – The tokenized US Treasury market is poised for substantial growth, with analyst Tom Wan from 21.co predicting that this sector could reach $3 billion by the end of 2024.

This upward trajectory is driven by a strategic shift towards real-world asset (RWA) tokenization within the decentralized finance (DeFi) ecosystem.

Arbitrum and MakerDAO Lead the Charge in Tokenized Treasury Allocations

According to Wan, decentralized autonomous organizations (DAOs) and DeFi projects are increasingly seeking diversification and stability in their treasuries. This strategic move is expected to fuel a significant surge in the tokenized US Treasury market. By integrating tokenized US Treasuries, these entities aim to access risk-free yields while remaining within the blockchain ecosystem.

Wan commented, “With the maturity of tokenized US Treasuries, over 15 products on Ethereum Virtual Machine (EVM) chains, and close to $2 billion assets under management (AUM), DAOs are starting to include yield-bearing products like BUIDL, USTB, USDY, and USDM in their treasuries. We expect this trend to continue in the long run.”

Recent developments underscore this trend. In June, the Arbitrum STEP Committee recommended diversifying 35 million ARB tokens ($27 million) from the Arbitrum DAO Treasury into six selected tokenized treasury products. These include Ondo Finance’s USDY, BlackRock’s BUIDL, Superstate’s USTB, Mountain USDM, OpenEden’s TBILL, and Backed Finance’s bIB01.

MakerDAO’s Initiative and Market Growth

Additionally, MakerDAO recently announced the Spark Tokenization Grand Prix competition, scheduled to commence on August 12, 2024. This initiative aims to onboard up to $1 billion of tokenized assets, focusing on short-term US Treasury Bills and similar products. The competition highlights the growing interest and investment in tokenized US Treasuries within the DeFi sector.

This year has witnessed unprecedented growth in the tokenized US Treasury market. Data from 21.co reveals a staggering increase from $592.63 million to $1.78 billion year-to-date, marking a 200% growth. This surge underscores the market’s potential as DeFi projects and DAOs increasingly integrate tokenized US Treasuries into their investment strategies.

The outlook remains optimistic as DAOs continue to allocate substantial funds towards tokenized treasuries, driving the market towards the projected $3 billion milestone by the end of 2024.

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