Dear Bankless Nation,

With the outlook for the global economy still on uncertain footing, more crypto investors are looking at onchain Treasury exposure to bring some security to their portfolio. Today, we dig into a few of the DeFi players tackling this flavor of RWA.

- Bankless team

DeFi Protocols Betting on US Treasuries

Bankless Writer: Jack Inabinet | Disclosures

Crypto Twitter has found itself divided on real world assets (RWAs) as of late; with unanswered questions surrounding the legality of RWA instruments and some investors turned off by their innate opacity compared to natively onchain assets, so it's no wonder that many hold doubts about the sector…

Regardless of your feelings towards RWAs, one thing remains true: the US national debt is spiraling out of control.

Source: US Debt Clock

America now finds itself partially bankrolling two separate geopolitical skirmishes as it adds billions of dollars in debt to the national deficit daily, meaning yields are once again under pressure. Ensuing higher-for-longer rate dynamics threaten to drag down the prices of risk assets, like crypto tokens and equities. 😨

Despite risks to broader markets, one crypto niche is positioned to outperform all others in such an environment! Protocols that tap into US Treasuries are the only ones that stand to benefit from these hikes, as the income they earn scales with increases in interest rates.

While there are no guarantees that capital sticks around in these protocols should interest rates further increase – especially seeing as it evaporated from the crypto industry during the first part of the Federal Reserve’s hiking cycle – the protocols utilizing US Treasuries are undoubtedly best positioned to succeed in such a situation.

Today, we’re discussing four crypto tokens you can invest in to expose yourself to the burgeoning onchain US Treasury narrative and protect your crypto portfolio from the next round of rate increases! The insights below are for paying subscribers only!👇

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