AlloyX’s Real Yield Token (RYT) is a tokenized money market fund on Polygon that represents custody-backed shares in a traditional MMF. RYT combines bank-custodied short-term assets with DeFi composability, letting holders trade onchain, post collateral and use looping strategies for yield enhancement.
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Bank-custodied MMF onchain
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Trad-fi assets (Treasurys, commercial paper) made tradable and composable in DeFi
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The tokenized Treasury market reached $8 billion with an average yield to maturity of 3.93% (Oct. 2)
Tokenized money market fund: AlloyX’s RYT launches on Polygon, backed by bank custody and DeFi composability — learn how to use RYT in DeFi now.
AlloyX debuts a tokenized money market fund on Polygon, merging bank-custodied assets with DeFi strategies amid growing demand for real-world assets.
Tokenization infrastructure company AlloyX has launched a tokenized money market fund on Polygon, designed to combine bank-custodied assets with DeFi-native strategies. The fund, called the Real Yield Token (RYT), represents shares in a traditional money market fund whose underlying assets are held in custody by Standard Chartered Bank in Hong Kong and subject to regulatory compliance and audits, the company announced.
What is a tokenized money market fund?
A tokenized money market fund is a digital representation of shares in a conventional MMF that holds short-duration, low-risk instruments like US Treasurys and commercial paper. Tokenization makes fund shares tradable onchain and enables use as collateral across DeFi protocols while preserving underlying custody and compliance frameworks.
How does AlloyX’s Real Yield Token (RYT) work?
RYT mirrors a traditional money market fund but issues blockchain tokens that represent fractional shares. Underlying assets remain in bank custody with Standard Chartered Bank in Hong Kong and are audited to meet regulatory standards. Deploying RYT on Polygon offers low fees and fast settlement, enabling holders to trade, borrow, and loop tokens inside DeFi to amplify yields.
Like a conventional MMF, RYT targets short-term, high-quality instruments to preserve capital and deliver cash-like yield. Tokenization preserves the fund’s familiar risk profile while adding onchain utility: holders can post RYT as collateral, borrow against positions, and reinvest proceeds across DeFi strategies — a practice commonly called looping.
AlloyX chose Polygon, an Ethereum scaling network, for its low transaction fees, quick confirmations, and a deep DeFi ecosystem that supports composability. This architecture is intended to bridge conservative cash management with decentralized finance functionality.
Why are institutions issuing tokenized MMFs now?
Demand for real-world assets (RWAs) onchain has increased as asset managers seek 24/7 settlement, programmability and broader market access. BlackRock’s USD Institutional Digital Liquidity Fund, Goldman Sachs and BNY Mellon announcements illustrate growing institutional interest in tokenized cash-management products. Unlike many institutional tokenized offerings, AlloyX emphasizes DeFi-native composability as a differentiator.
Industry data shows rapid growth: the tokenized Treasury market reached about $8 billion with an average yield to maturity near 3.93% as of Oct. 2. Moody’s, in a June report, called tokenized short-term liquidity funds “a small but rapidly growing product,” previously estimating the market at $5.7 billion. These figures reflect escalating institutional experiments with tokenized cash equivalents.
Regulatory developments and stablecoin adoption in the United States — alongside legislation such as the GENIUS Act discussions — have also increased interest in tokenized MMFs as a compliant, yield-bearing alternative to posting cash in onchain markets.
How can users interact with RYT in DeFi?
Users can buy RYT tokens to maintain exposure to money market yields while gaining onchain liquidity. Typical uses include:
- Posting RYT as collateral to borrow other assets.
- Looping borrowed funds to reinvest and compound returns.
- Trading RYT onchain for intraday settlement and liquidity management.
Looping increases potential yield but also raises leverage and liquidation risk; users should evaluate counterparty, custody, and protocol risk before leveraging tokenized fund shares.
Frequently Asked Questions
Can tokenized MMFs preserve regulatory safeguards?
Yes. Tokenized MMFs like RYT keep underlying assets in regulated bank custody and undergo audits to meet compliance standards. The token layer provides tradability without removing fund governance or custodial protections.
Is RYT safe to use as collateral in DeFi?
RYT is designed to reduce credit and duration risk via short-term instruments, but onchain use introduces smart-contract and protocol risks. Collateral use should consider these operational risks and platform-specific conditions before leveraging.
Key Takeaways
- Custody + Composability: RYT combines bank custody with DeFi composability to bridge trad-fi and crypto.
- Short-term, low-risk assets: Underlying holdings are Treasurys and commercial paper to preserve capital.
- DeFi utility: Tokenization enables collateral use, borrowing, and looping to enhance yield, with added protocol risk to manage.
Conclusion
AlloyX’s Real Yield Token (RYT) highlights the next phase of real-world asset tokenization: preserving regulatory custody while unlocking DeFi composability. As tokenized money market funds scale, investors and institutions will weigh the benefits of 24/7 liquidity and programmability against custody, audit, and smart-contract risks. Monitor fund disclosures and platform safeguards before deploying capital.
