- AlloyX unveils tokenized money market fund RYT on Polygon for DeFi trading and yield looping.
- RYT holds bank-custodied assets via Standard Chartered, regulated and audit-compliant.
- Tokenized MMFs gain traction as institutions and retail bridge traditional finance with DeFi.
Tokenization infrastructure firm AlloyX has introduced a new tokenized money market fund on Polygon, reflecting the growing trend of bringing real-world assets (RWAs) to blockchain ecosystems.
The fund, dubbed the Real Yield Token (RYT), aims to merge traditional bank-custodied assets with decentralized finance (DeFi) strategies, offering investors both familiarity and blockchain-native utility.
RYT combines traditional MMF security with DeFi flexibility
RYT represents shares in a conventional money market fund, with the underlying assets held in custody by Standard Chartered Bank in Hong Kong.
The fund is fully regulated and subject to regular audits, giving investors confidence in its compliance and security.
Like other money market funds, RYT invests in short-term, low-risk instruments, including US Treasurys and commercial paper, ensuring capital preservation while generating modest yields.
The tokenized format, however, introduces new functionality.
RYT shares can be traded onchain and integrated into DeFi protocols, enabling users to employ their holdings as collateral.
Through a DeFi technique known as looping, investors can borrow against their RYT tokens and reinvest the proceeds to enhance yields — a feature not typically available in traditional money market products.
AlloyX chose Polygon for deployment, citing the network’s low fees, fast transaction speeds, and vibrant DeFi ecosystem.
Institutional interest in tokenized money market funds grows
AlloyX is entering a rapidly expanding market.
Large financial institutions have increasingly explored tokenized money market funds to combine the stability of cash-like assets with the efficiency and composability of blockchain.
Notable examples include BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which offers tokenized exposure to US dollar yields through Treasury bills and repurchase agreements.
Goldman Sachs and BNY Mellon have also announced plans for similar tokenized MMFs, although these generally do not include DeFi-native functionalities like looping or composability, which set AlloyX’s RYT apart.
According to a June report by Moody’s, tokenized short-term liquidity funds remain a “small but rapidly growing product,” with the market reaching an estimated $5.7 billion since 2021.
The trend underscores growing institutional interest in bridging traditional finance with digital markets while providing investors with onchain access to familiar, low-risk instruments.
Tokenized MMFs address cash management needs in DeFi
The rising adoption of tokenized money market funds is also linked to broader developments in the crypto ecosystem, such as the passage of the GENIUS Act in the United States and increased stablecoin usage.
These factors have heightened demand for onchain products that retain the liquidity and security of cash-like assets.
JPMorgan strategist Teresa Ho told Bloomberg that tokenized MMFs offer a practical alternative to posting cash or Treasurys in DeFi protocols.
“Instead of posting cash, or posting Treasurys, you can post money-market shares and not lose interest along the way. It speaks to the versatility of money funds,” she said, emphasizing the appeal of products like RYT for investors seeking both yield and utility.
AlloyX’s launch represents a notable milestone for tokenized finance, showcasing the potential for traditional instruments to coexist with decentralized protocols while offering innovative ways to generate yield.
As demand for real-world assets on blockchain grows, products like RYT may become a key bridge between conventional finance and DeFi, appealing to both institutional and retail investors seeking secure, liquid, and composable onchain assets.
