Introduction 🧬 Money market funds invest in low-risk assets such as government bonds or short-term corporate bonds.
Tokenized Market Funds (TMFs) represent the shares of these funds issued on blockchains. These TMFs potentially offer several advantages:
Better accessibility (retail investors rarely have direct access in the traditional world) A response to the growing demand to integrate returns from traditional finance within decentralised finance (DeFi) Facilitating trading on primary and secondary markets with immediate transfers and 24/7 operation Improving capital efficiency through their use in on-chain lending and borrowing markets or as collateral on securities.chain or as collateral on trading platforms Reducing barriers to entry by splitting shares The characteristics of TMFs vary because they do not necessarily have the same objectives, in particular because of differences in jurisdiction, which impose more or less constraints. These characteristics can be analysed through the following questions:
Which users can obtain the TMF on the primary market and are authorised to hold it? What is the minimum investment? How often can it be traded? On which blockchain is it traded? What is the underlying composed of and which custodians hold it? What are the associated fees? How can you invest as an individual? Here is a non-exhaustive list of the most important current TMFs.
Blackrock USD Institutional Digital Liquid Fund (BUIDL) BUIDL is issued by BlackRock via a structure based in the British Virgin Islands, relying on tokenisation technology from US start-up Securitize.
It is the TMF with the largest capitalisation, amounting to $533 million. BUIDL is currently only available on the Ethereum blockchain (track its capitalisation in real time) .
BUIDL works with a whitelist of players who have passed a KYC, allowing them to trade on the primary and secondary markets (see in detail how it works).
The minimum investment is $5 million, which reserves BUIDL for large players. Fewer than 30 addresses currently hold it. Players already authorised include Ondo, Ethena and Mountain - all of whom are crypto-native players.
BUIDL is notably used in DAO treasuries or as collateral in other products, for example the OUSG issued by Ondo, whose underlying is almost entirely composed of BUIDL.
BUIDL can be obtained or returned on the primary market instantly, at any time, by exchanging USDC, the stablecoin issued by Circle.
The underlying of BUIDL consists of US Treasuries, held by US bank BNY Mellon.
The management fee is 0.5%.
The projects that allow you to invest in BUIDL: Ondo, Ethena, Mountain, etc.
Franklin OnChain U.S. Government Money Fund (FOBXX) FOBXX is issued by Franklin Templeton via a structure based in the United States, relying on its own tokenisation platform.
FOBXX has a capitalisation of $408 million: almost all of it ($384 million) is on the Stellar blockchain, the first TMF hosting chain. It is also present on Arbitrum and Polygon, layers 2 of Ethereum, as well as on Avalanche (probably on an experimental basis, with only $100).
FOBXX uses a whitelist for access to its product on the primary and secondary markets. It requires a minimum investment of $20 on Stellar, while other blockchains require at least $50,000.
The underlying of FOBXX consists of US Treasury bills, held by J.P. Morgan.
The management fee is 0.15%.
Projects that allow you to invest in FOBXX: not disclosed.
Hashnote Short Duration Yield Coin (USYC) USYC is issued by the US company Hashnote via a structure based in the Cayman Islands, using its own tokenisation platform.
USYC has a capitalisation of $380 million: almost all ($378 million) is on the Ethereum blockchain, with the remainder split between Canto and Near. Notably, USYC's capitalisation stagnated at around $40 million for a long time before growing strongly, thanks to its integration into Usual, the issuer of the USD0 stablecoin .
Obtaining or redeeming USYC on the primary market is done instantly, at any time, by exchanging PYUSD or USDC, the stablecoins issued by PayPal and Circle respectively.
Thanks to a partnership with Fireblocks, USYC can be used as collateral on certain centralised trading platforms, such as Deribit.
USYC uses a whitelist for access to its product on the primary and secondary markets. The minimum investment is set at $100,000.
USYC's underlying is made up of US Treasuries, held by BNY Mellon.
There are no management fees, but a 10% performance fee is applied.
Projects that allow you to invest in USYC: mainly Usual.
Superstate Short Duration US Govermnent Securities Fund (USTB) USTB is issued by Superstate via a US-based structure, leveraging its own tokenisation platform. Its CEO is Robert Leshner, known for having created Compound, one of the first decentralised borrowing protocols (read our survey on this sector) .
USTB has a capitalisation of $107 million and is only available on the Ethereum blockchain.
USTB uses a whitelist for access to its product on the primary and secondary markets. The minimum investment is set at $100,000.
Obtaining and redeeming USTB on the primary market is done once a day via payments in USDC stablecoins.
The underlying USTB consists of US Treasury Bills, held by UMB Bank.
The management fee is 0.15%.
Projects that allow you to invest in USTB: not disclosed.
OpenEden TBILL Vault (TBILL) TBILL is issued by OpenEden via a structure based in the British Virgin Islands, using its own tokenisation platform.
TBILL has a capitalisation of $107 million, split between Ethereum ($95 million) and Arbitrum ($12 million).
TBILL uses a whitelist for access to its product on the primary and secondary markets. The minimum investment is $100,000.
The underlying of TBILL consists of US Treasury Bills, held by BNP Paribas.
The management fee is 0.3%, plus a redemption fee of 0.05%.
Projects to invest in TBILL: undisclosed.
Spiko US T-Bills Money Market Fund (USTBL) USTBL is issued by Spiko via a structure based in France, using its own tokenisation platform. It has announced a €4 million fundraising round in the first half of 2024.
USTBL's capitalisation has reached $40.5 million, including $39.5 million on Ethereum and $1 million on Polygon.
USTBL uses a whitelist for access to its product on the primary and secondary markets. The minimum investment is set at $1,000.
Obtaining and redeeming USTBL on the primary market is done once a day via dollar payments. Support for stablecoins is not yet available.
USTBL's underlying consists of US Treasuries, held in custody by CACEIS (Crédit Agricole).
The management fee is 0.3%, plus an administration fee of 0.10%.
To invest in USTBL, you can do so directly on Spiko.
Spiko EU T-Bills Money Market Fund (EUTBL) EUTBL is issued by Spiko via a structure based in France, using its own tokenisation platform.
EUTBL has a capitalisation of $73.8 million, including $69.5 million on Polygon and $4.3 million on Ethereum. EUTBL represents around three-quarters of the tokenised European debt market.
EUTBL uses a whitelist for access to its product on the primary and secondary markets. The minimum investment is set at €1,000.
EUTBL is obtained and redeemed on the primary market once a day via euro payments. Stablecoin support is not yet available.
The underlying of EUTBL consists of treasury bills issued by eurozone governments, held by CACEIS (Crédit Agricole).
The management fee is 0.3%, plus an administrative fee of 0.10%. Note that management fees are zero up to €100 million in assets under management.
To invest in EUTBL, you can do so directly on Spiko.
Special cases The USDM and USDY, issued by Mountain Protocol and Ondo respectively, are very similar products to TMFs, as they are also tokens whose underlying is made up of US Treasuries. However, they offer more flexibility than traditional TMFs.
Let's take Ondo's USDY as an example: although only white-listed players can obtain it on the primary market, it can then be freely acquired on the secondary market. Note that Americans do not have access (read our analysis of the Ondo project).
The USDY has a capitalisation of $451 million and is held by 7100 different addresses. In comparison, none of the TMFs mentioned above are held by more than 500 addresses, with most even below 100.
Mountain USDM, meanwhile, requires KYC to acquire on the primary market, but can then be traded freely on the secondary market. It is considered a stablecoin with a built-in return.
Also worth mentioning is mTBILL, issued by start-up Midas from a structure based in Germany, via its own tokenisation platform.
mTBILL uses a whitelist for access to its product on the primary market, imposes no minimum investment and can be traded freely on the secondary market.
Launched very recently, mTBILL has a capitalisation of $5.8 million and is only available on Ethereum.
Its underlying is made up of US Treasury bills, held by Maerki Baumann & Co. AG.
The Big Whale's view 🐳 Almost all TMFs are deployed on the Ethereum blockchain, as it is the blockchain with the most financial activity and, therefore, the highest demand for sources of return. This demand is mainly fuelled by stablecoin reserves and DAO treasuries.
One example is the competitions organised by Sky (formerly MakerDAO) and Ethena, where TMF issuers compete to be included in the treasuries of these protocols.
Ethereum's layer 2s are also hosting growing TMF activity, thanks to their financial dynamism and low transaction costs. For example, Spiko's EUTBL has a strong presence on Polygon, as it targets broad accessibility, as evidenced by its low minimum investment threshold.
MFTs remain largely constrained by various regulations, particularly with regard to their trading on the secondary market. The products mentioned in the "special cases" therefore raise compliance issues.
