Funds lead year-to-date growth in tokenized market cap by $7B

Three tokenized funds from the biggest names in traditional finance have collectively added roughly $7.1 billion in market cap since the start of the year, making the fund category the single largest driver of growth across the entire tokenized asset landscape.

BlackRock’s BUIDL, Circle’s USYC, and Franklin Templeton’s iBENJI now sit at a combined active market cap of approximately $7.23 billion. That figure accounts for a staggering share of the total on-chain tokenized asset market, which currently ranges between $33.9 billion and $36.7 billion depending on the tracking platform.

The big three, by the numbers

Circle’s USYC leads the pack with an active market cap of around $3 billion. BlackRock’s BUIDL follows at roughly $2.7 billion. Franklin Templeton’s iBENJI rounds out the trio at approximately $1.5 billion.

Each of these products is essentially a blockchain-native wrapper around traditional money-market or treasury instruments.

Wall Street showed up, but DeFi didn’t get an invite

Despite sitting on billions in tokenized assets, these funds have almost zero interaction with decentralized finance protocols. DeFi utilization for the three major funds hovers between 0% and 1.05%, according to data tracked by DeFiLlama.

The vast majority of holdings remain in custody or direct wallets, functioning more like digital certificates of deposit than active DeFi building blocks.

Compare that to the credit-focused corner of the tokenized asset market. Smaller players like Maple and Janus Henderson’s tokenized credit offerings show DeFi utilization rates ranging from 50% to 97%. Those tokens are actively deployed as composable collateral across protocols.

The contrast creates a two-tier system within tokenized real-world assets. On one level, you have massive institutional funds that use blockchain rails for issuance and record-keeping but treat the DeFi ecosystem like a velvet rope they’d rather not cross. On another level, smaller credit-focused tokens are deeply embedded in on-chain lending and borrowing markets.

What this signals for tokenized assets

The low DeFi utilization rate reveals the current state of institutional tokenization. The promise of tokenized real-world assets has always been composability: the idea that a tokenized Treasury bill could serve as collateral in a lending protocol, which could then be rehypothecated into a structured product, all without leaving the blockchain. That vision remains almost entirely theoretical for the largest funds in the space.

If even a fraction of BUIDL or USYC’s market cap eventually becomes composable within DeFi, the liquidity implications for on-chain lending markets would be significant. A 5% utilization rate across $7 billion in tokenized fund assets would inject roughly $350 million in new collateral into DeFi protocols.

The concentration of growth in just three funds raises questions about market structure. When three products from three issuers account for the majority of a sector’s year-to-date expansion, any regulatory action targeting one of these issuers, or a significant redemption event, could ripple across the broader tokenized asset market in ways that a more distributed landscape would absorb more easily.