Tokenized treasuries: how US yield moved onto the blockchain

While the Fed rate was zero, DeFi beat banks with any yield at all. When US treasuries started paying 4-5%, on-chain capital got an alternative - and the market responded by tokenizing the treasuries themselves. It became the largest RWA segment: billions of dollars, issuers of the BlackRock and Franklin Templeton caliber.

Mechanics

A fund buys short-term US government bonds and issues a token representing a share of the fund; the yield accrues into the token's price or via rebase. For the holder it is an on-chain analog of a money market fund: a near risk-free dollar rate, but with 24/7 transfers and no broker.

The caveats marketing stays quiet about

• KYC gate: most of these tokens are permissioned - buying and transferring only between verified addresses. This is not DeFi in the usual sense.
• Retail sidelined: minimum tickets and investor qualification often cut off the ordinary user - the product was built for funds and DAO treasuries.
• Wrapper risk: the rate is "risk-free", but the issuer, the custodian, and the jurisdiction are not.

The market impact runs deeper than the product itself: the risk-free on-chain rate became the benchmark every DeFi yield now competes with. Anything paying less than treasuries at higher risk has lost its point.