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RWA: Investigating the Growth of Treasury-Backed Stablecoin Adoption

Real World Assets (RWA) are currently some of the most discussed domains in crypto. RWAs are often thought of in two distinct categories: tokenized assets or collectibles, such as art or luxury watches, and tokenized financial instruments. Mountain Protocol is a newer RWA protocol that falls into the latter category. The native token of Mountain Protocol, USDM, is used to tokenize US treasuries. Reserves are composed exclusively of short-term US Treasuries. Short-term US government debt is considered the lowest-risk USD-denominated asset. Mountain Protocol has a vision “that stablecoin holders are the natural owners of the ‘risk-free rate’ through a secure, regulated, enterprise-grade product.”

 

Using Amberdata’s on-chain Ethereum data, we investigated Mountain Protocol’s activity to understand the growth of tokenized real-world assets. As of January 2024, Mountain has a market cap of over $143 million and had substantial growth towards the end of 2023.  

 

Below is the cumulative and daily USDM minted through the protocol. This is an indication of adoption, user growth, and interest in a natural interest-bearing stablecoin.

As of January 2024, the 30-day treasury rate was roughly ~5.5%. While analyzing the data from Mountain Protocol we can see they have an average 30-day rate of approximately 4.99%.  

  

Additionally, we used this data to monitor holders over a period to see if the treasury-backed stablecoin (USDM) was growing in holders or transfer volume. 

 

 

 

As we can see, Mountain Protocol users have increased their Mint/Issuance of USDM in December of 2023, indicating a clear interest in treasury-backed stablecoins. There has also been a steady adoption and usage of the protocol, which is a measure of stability and protocol health.

 

One key point is that Mountain Protocol follows Know Your Customer (KYC) requirements, meaning users of this protocol must go through their official onboarding process. Additionally, while the USDM Token can be used in the broader DeFi ecosystem, only valid customers can mint and redeem their USDM for any yield. This is common amongst many stablecoins. 

 

To understand the RWA tokenization ecosystem using Amberdata’s extensive offering, please use our code tutorial here.