Zinger Key Points
- Non-USD denominated RWAs are expected to scale soon, following U.S. Treasury tokenization success.
- Legal and operational barriers, like ownership clarity, limit real estate and private credit tokenization.
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The recent surge in yields from tokenized treasury protocols isn't a temporary arbitrage, but a more sustainable trend driven by macroeconomic fundamentals and one that could reshape on-chain yield generation, according to RWA.io's Co-founder and COO, Marko Vidrih.
Vidrih emphasized that these yields, driven by macroeconomic factors like rising interest rates, provide a stable alternative to volatile DeFi protocols, positioning tokenized treasuries as a reliable investment in the digital asset landscape.
"From our perspective at RWA.io, the higher yields offered by tokenized treasury protocols compared to on-chain stablecoin lending are a reflection of several factors, and we see this as a sustainable trend, not merely a short-term spread," he said.
He attributed the sustainability to the direct link between tokenized treasuries and U.S. Treasuries, which are backed by the U.S. government's credit and driven by interest rate dynamics rather than crypto-native risks like smart contract vulnerabilities or leveraged positions.
He noted, "The yield generated from these tokenized products comes directly from the interest payments of the underlying Treasuries, which are then passed on to the token holders."
Unlike DeFi protocols reliant on inflationary token emissions, tokenized treasuries benefit from the predictability of traditional financial markets.
Vidrih highlighted that as the real-world asset (RWA) sector matures, institutional adoption will further solidify their reliability.
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Addressing user experience, Vidrih acknowledged that while tokenized treasuries are gaining traction, challenges remain.
He pointed to ongoing developments in scalability and compliance, stating, "Scalability is being addressed with Layer 2 solutions and more critical issue of compliance is being solved through permissioned layers, on-chain identity tools and collaboration between regulators and financial firms."
However, he noted that fragmented standards across blockchains and regulatory uncertainties continue to hinder seamless adoption by traditional finance.
Vidrih also discussed the broader RWA landscape, predicting the rise of non-USD denominated assets as global interest in tokenization grows.
He cited the concentration of DeFi in U.S. Treasuries as a natural early phase, with diversification into assets like real estate and private credit expected as legal frameworks evolve.
On regulatory challenges, he said, "The resolution of the regulatory overhang will not be a single event but a gradual process of clarification, adaptation and collaboration."
Regarding creditworthiness, Vidrih expressed concerns about current on-chain risk frameworks, stating, "Current on-chain risk frameworks are improving but are not yet as robust as those in traditional finance."
He highlighted issues with legal enforceability and oracle reliability.
Additionally, he foresaw crypto-native DAOs evolving into capital allocators and underwriters, leveraging community governance to expand RWA opportunities.
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