RWA Backed Stablecoins

Range Protocol
5 min readJan 4, 2024

Stablecoins are crucial in decentralized finance for preserving on-chain value. Leading stablecoins like USDC and USDT, backed by the U.S. Dollar, dominate the market with ~85% share. They invest in yield-bearing assets like Treasuries but keep the yield for themselves.

However, newer models, especially yield-generating stablecoins, are gaining prominence. Among them, stablecoins backed by real-world assets (RWAs) like Treasuries and bonds are significant due to their appeal to institutional investors.

This article will delve into five models of RWA-backed stablecoins experiencing swift growth:

  1. Ondo Finance’s USDY
  2. Mountain Protocol’s USDM
  3. Angle Protocol’s stEUR
  4. MakerDAO’s sDAI
  5. Verified USD Foundation’s USDV

All of these assets in turn necessitate an efficient manner of handling secondary market liquidity, such as in optimizing liquidity provider yield. By the end of this article, the reader will understand the potential growth in this sector and why Range Protocol has introduced various RWA-focused DeFi vaults to handle such liquidity effectively.

Ondo Finance

Ondo Finance, a prominent player in the decentralized finance (DeFi) landscape, has introduced various on-chain assets, including OMMG (tokenized U.S. Money Markets) and OUSG (tokenized U.S. Treasuries). However, it’s their latest offering USDY that has been garnering significant attention.

USDY represents a tokenized Treasury note that is secured by short-term U.S. Treasuries and bank deposits, and yields 5%. A key safeguard is its “bankruptcy remote” feature that ensures the protection of funds even in the unlikely event of a critical service provider like Ondo facing bankruptcy.

The asset is over-collateralized by 3%, with Ondo contributing to a first-loss position. This mechanism acts as a reliable price buffer, mitigating the effects of potential short-term price fluctuations on U.S. Treasuries.

While both non-U.S. individuals and institutional investors have the opportunity to mint and redeem USDY directly, they are required to undergo Know Your Customer (KYC) procedures. Consequently, USDY is exclusively available to whitelisted participants. Nevertheless, it remains accessible for use within various decentralized applications in the DeFi ecosystem which opens up room for innovation.

Ankura Trust plays a pivotal role in this ecosystem, serving as the Verification Agency and Collateral Agent on behalf of USDY holders. This includes the provision of essential daily transparency reports, enhancing the trustworthiness of this innovative stablecoin offering.

Additional information on USDY can be found here.

Mountain Protocol

Mountain Protocol has issued their own stablecoin USDM that offers a 5% APY and is backed by short-term T-Bills. What sets it apart is that they have secured licensing from the Bermuda Monetary Authority, making USDM the world’s first nationally-regulated yield-bearing stablecoin.

They issue rewards through daily rebasing, which works by increasing supply rather than increasing the token’s value. For instance, if a user purchases 100 USDM tokens at $1, after one year, the value remains at $1, but the user now holds 105 tokens. This mechanism resembles the approach taken by Lido’s stETH, and a key reason for this is that it simplifies composability with other DeFi projects and ecosystems.

Like Ondo’s USDY, USDM is exclusively available to non-U.S. investors. They’ve also established bankruptcy-remote accounts as well, ensuring that asset redemption remains feasible even in the unlikely event of bankruptcy. Adding another layer of trust to the ecosystem, Nephos Group offers independent attestation reports, affirming the adequacy of reserves and the adherence to policies and regulations in all transactions involving USDM.

More information on USDM can be found here.

Angle Protocol

It’s first important to know that agEUR is a crypto-collateralized Euro stablecoin issued by Angle Protocol. In September 2023, Angle announced stEUR with the core idea being that they can automatically distribute protocol revenue to agEUR holders. This works by having users stake their agEUR in exchange for a share of protocol revenue. For example, Angle controls BC3M, Backed’s tokenized representation of Euro government bonds.

Anyone may hold agEUR or stEUR, with no deposit or withdrawal fees. Additionally, there is no lock-up period or minimum deposit required, providing flexibility for users. The expected yield is ~4% based on current estimates of their excess revenue, but this may vary depending on factors such as the proportion of agEUR holders that elect to stake for stEUR.

More information on stEUR may be found here.

It’s also worthwhile to note that they do not use an attestor, but provide all collateral data publicly here.


MakerDAO is the largest collateralized debt position (CDP) protocol in DeFi, enabling users to lock-up cryptocurrency assets as collateral in order to borrow the decentralized stablecoin DAI. They currently have over $8B in TVL, which they in turn invest elsewhere, such as by buying Treasury Bills for yield.

They are currently making ~$165M in annualized revenue, leading to the creation of sDAI, standing for savings DAI. Users may lock up their DAI into MakerDAO’s Daily Savings Rate (DSR) module which allows them to mint sDAI. This is done through Spark Finance, a MakerDAO project.

The DSR yields sDAI holders a 5% APY, and holds a total of $1.6B DAI making it the largest yield-generating stablecoin. Adjusting this APY also acts as a monetary policy lever for MakerDAO. For example, if DAI falls below $1, they can increase the DSR’s yield to incentivize more DAI buyers (and thus more sDAI).

MakerDAO does not have bankruptcy remoteness in itself, but instead relies upon the security of the tokenized Treasury issuers. Huntingdon Valley Bank (HVB) is a debt ceiling participant, receiving a loan in return for their collateralized assets.

It appears that Spark Finance does not have attestations, but all data is publically viewable on-chain and they provide various resources for viewing this data.

Verified USD Foundation

Verified USD Foundation has launched USDV, a yield-generating stablecoin backed by tokenized Treasuries and overnight repurchase agreements.

To begin, it is backed by STBT, representing MatrixPort’s tokenized short-term treasury bills. Moving forward, they will seek to diversify collateral to include other real-world assets that qualify as being fully transparent and verifiable on-chain.

To mint USDV, one must be whitelisted to become a “Minter”, at which point the USDV can be freely circulated throughout DeFi.

It is built using Layer Zero’s OFT Standard, meaning that it’s omnichain and can be deployed across many different networks including Polygon, Optimism, and more.

Proof-of-reserves are attested to by Chainlink.


In this article, we explored five different RWA-backed stablecoins that are arriving on-chain. Their high yields represent an attractive alternative to fiat-backed stablecoins and will attract capital, but require liquidity to be efficiently managed.

This is why Range Protocol has developed systematically managed DeFi vaults for every risk appetite. These include our USDV/USDT vault, USDY/USDC vault, USDM/SDAI vault, and a few of our stEUR vaults. We have plans launch many more focused on other RWA-backed assets in the future!

In turn, Range is becoming the go-to on-chain platform for all DeFi yield, connecting DeFi users with professionals who deploy systematic yield strategies for all cutting-edge assets.

Those interested in exploring our vaults can test them out on our platform here.

In the meantime, we post frequent updates on our Twitter — don’t miss out!



Range Protocol

Permissionless Infrastructure for Smart Money Management