Former senior officials at digital-asset exchange Gemini are rolling out a token backed by US Treasury Bills with around 5% yield in response to a gulf in returns between traditional finance and decentralized crypto lending.
(Bloomberg) — Former senior officials at digital-asset exchange Gemini are rolling out a token backed by US Treasury Bills with around 5% yield in response to a gulf in returns between traditional finance and decentralized crypto lending.
OpenEden, a decentralized finance platform, is offering the token known as TBILL against stablecoins, which will in turn be invested in short-term US Treasury Bills, according to a statement by the company.
The move underscores how crypto investors are now seeking higher returns in traditional finance, according to Jeremy Ng, who co-founded OpenEden along with former Gemini colleague Eugene Ng.
Read more: DeFi’s Inability to Declare Victory Exposes Its Many Problems
“Couple of years back investors were flocking to Defi for yields,” said Jeremy, who started Gemini’s Asia Pacific operations in June 2020 and stepped down after 18 months. “The tables have turned,” he said.
Returns from decentralized finance have fallen following a series of crypto blow ups last year that hit trading volumes and risk appetite in digital assets.
In contrast, the US Federal Reserve’s sharp rate hikes have pushed up US Treasury yields. Defi liquidity has slumped with total value locked sinking to $50 billion from $165 billion a year ago, according to data tracker DeFi Llama. Defi annual yield on USDC is just under 2% on Aave and Compound in comparison to about 4.7% on three-month US Treasury bills.
The TBILL tokens will be issued by a fund regulated in British Virgin Islands and OpenEden which is a registered fund management company in Singapore will manage the token smart contract vault, said Jeremy Ng.
While there are no fees initially, at a later stage as much as 40 basis points will be charged per annum, he said.
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