A new contender has quickly climbed the real-world assets ranks.<\/p>\n
Just four months after its September launch, Mountain Protocol<\/a>\u2019s stablecoin has become the second-largest asset in the U.S. Treasury-backed sector, and the largest Treasury-backed stablecoin, according to rwa.xyz.<\/p>\n Upstart USDM\u2019s market capitalization of $153 million trails only Franklin Templeton\u2019s OnChain U.S. Government Bond Fund, which has a market cap of $331 million. Franklin Templeton is a U.S.-based asset manager with over $1 trillion in holdings.<\/p>\n <\/p>\n <\/a><\/p>\n Mountain Protocol also jumped in terms of Total-Value Locked. In a couple of months it leapfrogged five protocols to become the third-largest RWA platform by TVL after MakerDAO and Ondo Finance, according to IntoTheBlock.<\/p>\n <\/p>\n <\/a><\/p>\n USDM\u2019s key feature is that it currently returns 5% APY to its holders. This yield is generated through short-term U.S. Treasuries, which back the stablecoin.<\/p>\n The quick rise of Mountain Protocol is a sign that DeFi traders continue to look for ways to squeeze the most yield out of their assets. Tokenized versions of U.S. Treasuries are offering a way to do that – at least for now.<\/p>\n Martin Carrica<\/a>, Mountain Protocol\u2019s co-founder, says USDM provides a new take on the stablecoin, which is better suited towards the current economic environment.<\/p>\n \u201cIn every economy with an interest rate, you have a high-yield checking account product and it is a no-brainer to switch into that,\u201d he told The Defiant in an interview. \u201cWe started Mountain Protocol to allow for that opportunity in crypto.\u201d<\/p>\n \u201cReal-world assets\u201d are tokenized versions of assets not native to blockchains. A subset of RWAs, assets representing<\/a> U.S. Treasuries, has done particularly well with a market cap of $859 million, according to rwa.xyz. The subsector grew by a factor of over seven in 2023.<\/p>\n <\/p>\n Start for free<\/a><\/div>\n <\/p>\n The largest stablecoins in crypto, USDT, USDC, and DAI, all launched when U.S. interest rates were close to 1%. Together, the three dollar-pegged assets make up 93.5% of stablecoins, according to CoinGecko<\/a>.<\/p>\n Aside from contending with incumbents like USDT, USDM is also competing with institutions offering non-blockchain-enabled ways to take advantage of higher rates.<\/p>\n Higher interest rates can serve as a magnet<\/a> pulling people away from crypto, as investors trade their stablecoins to get Treasury-fueled yields from traditional finance.<\/p>\n Mountain Protocol\u2019s USDM aims to reduce that flight by passing on that Treasury yield to users.<\/p>\n Meanwhile, other stablecoin issuers, which also back their tokens with U.S. government notes, keep the return on those bonds to themselves.USDT\u2019s issuer Tether generates hundreds of millions of dollars per quarter in part thanks to its U.S. Treasury holdings.<\/p>\n There are also other stablecoins like USDY from Ondo Finance<\/a>, which pass on U.S. Treasury yields to holders. With a market capitalization of $4.1M, USDY trails USDM by a significant margin.<\/p>\n The startup raised an undisclosed amount of venture capital in a seed round led by Nic Carter of Castle Island Ventures, with participation from Coinbase Ventures, New Form Capital and others.<\/p>\n Mountain Protocol has registered with the Bermuda Monetary Authority as a Digital Asset Business, a legal designation the country released<\/a> in 2018.<\/p>\n![\"the-defiant\"](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F6oftkxoa%2Fproduction%2F9b753daa850a471cd35d96f1deac07deba4cc660-1350x756.png&w=828&q=100\")
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Large Incumbents<\/h2>\n
Nuts and Bolts<\/h2>\n