Why crypto funds, trading firms, and DAO treasuries should allocate to tokenized RWAs — and how to do it.
Stablecoins have become the backbone of crypto — but most of this capital sits idle.
Fiat-backed stablecoins reached a record $300+ billion market capitalization in 2025, serving as the largest pool of tokenized "cash" on-chain. This represents more capital than the GDP of many countries — all sitting on public blockchains.
Over $46 billion in USDC sits idle on-chain, forgoing approximately $1 billion+ per year in potential yield.
The growth of stablecoins proves that crypto-native organizations need stable, dollar-denominated assets. But stablecoins alone don't generate yield — they're essentially digital cash under a mattress.
Total stablecoin market capitalization over time, broken down by USDT, USDC, DAI, and others
Tokenized treasuries transform idle stablecoins into yield-generating assets.
On-chain tokenized U.S. Treasury and money market fund assets have grown to roughly $10 billion AUM by late 2025, up from virtually zero in 2020. These products offer the same stability as stablecoins, but with the added benefit of U.S. government debt yields.
The mechanics are simple: instead of holding USDC that earns nothing, you hold a token like BUIDL or OUSG that represents a share in a fund holding short-term U.S. Treasury bills.
Tokenized treasuries combine stablecoin-like stability with traditional finance yields, all while remaining on-chain, composable, and accessible 24/7.
7-day annualized yield comparison across different asset types
BlackRock, Franklin Templeton, and crypto-native issuers are competing for the tokenized treasury market.
By objective metrics of AUM and usage, tokenized treasury funds have become the fastest-growing segment. These products offer "stablecoins with yield."
The entry of traditional asset managers like BlackRock signals a pivotal moment: institutional-grade products are now available on-chain with the same regulatory oversight.
Leading tokenized U.S. Treasury/Money Market instruments by assets under management
Early adoption spans crypto-native organizations and forward-leaning traditional institutions.
Different investor segments are approaching tokenized RWAs with distinct motivations. Crypto funds want yield and collateral utility. DAOs need treasury sustainability.
The relatively low adoption among DAOs (15%) represents a significant opportunity. Most DAO treasuries still hold stablecoins that earn nothing.
Percentage of institutions currently adopting or planning to adopt tokenized RWAs
RWA allocations reduce volatility and protect against crypto-specific drawdowns.
Historical analysis shows that portfolios with RWA allocations experienced significantly reduced drawdowns during crypto market crashes like Luna/Terra and FTX.
The mechanism is simple: when crypto assets crash, RWAs maintain their value because they're backed by real-world assets with independent price dynamics.
Products like BUIDL are now accepted as collateral on major exchanges, allowing funds to maintain leverage while earning yield on their margin.
Simulated portfolio returns under different drawdown scenarios based on RWA allocation percentage
Yield-bearing RWAs can cover operational costs without selling native tokens.
For DAOs, treasury management is existential. A treasury that depletes too quickly forces token sales that dilute community ownership. RWAs offer a path to sustainability.
A modest 10-20% allocation to yield-bearing RWAs can materially extend a DAO's operational runway, reducing the need to sell native tokens.
Estimated runway extension (months) based on RWA allocation percentage and yield
RWAs provide low correlation to crypto markets — genuine portfolio diversification.
One of the most compelling arguments for RWAs is their low correlation with crypto assets. While most cryptocurrencies move together (0.7+), tokenized treasuries have correlations of just 0.1-0.3 with crypto.
This low correlation is what makes RWAs valuable for portfolio construction. When crypto markets crash, your RWA holdings maintain their value.
Adding low-correlation assets improves the portfolio's Sharpe ratio — you get better returns per unit of risk.
Correlation coefficients between crypto assets, traditional assets, and RWAs
Experts project tokenized assets could reach 10% of global assets by 2030.
The growth trajectory for tokenized RWAs is steep. Industry experts project that asset tokenization will grow exponentially through 2030, potentially representing a multi-trillion dollar market.
Key adoption gates include regulatory clarity (progressing), institutional infrastructure (building), and on-chain liquidity (early but improving).
Projected tokenized asset market size under conservative, moderate, and optimistic scenarios
Concrete next steps for crypto funds and DAO treasuries.
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