Tokenized Treasury Funds Yield Less Than Their Bills, Dune Data Shows
Tokenized money funds trail the Treasuries they hold
A researcher at analytics firm Dune said on Sept. 28 that the 12 largest tokenized money funds all paid investors less than the U.S. Treasury bills behind them. Tokenized funds are traditional investment funds whose shares exist on a blockchain. The finding extends Dune's ongoing look at how much income from U.S. government debt actually reaches onchain investors.
The market in question is large. Distributed tokenized U.S. Treasury products totaled $14.69 billion, according to tracking site RWA.xyz on Sept. 28.
Key numbers
- Dune's Arno said the 12 biggest tokenized money funds all yielded less than the Treasury bills they hold.
- WisdomTree's Treasury Money Market Digital Fund (WTGXX) returned 3.64% after expenses for the year ended Aug. 31, versus 3.79% for its ICE US 1-Month Treasury Bill Index benchmark — a 15 basis point gap.
- WTGXX held about $1.23 billion in assets as of Sept. 25 and charges a 0.25% annual expense ratio.
- Dune's earlier Aug. 28 analysis found nine issuers paid less than the bills behind their products, and three of the nine held other tokenized funds rather than bills directly.
What issuer disclosures show
WisdomTree's published results allow a same-period comparison of actual returns. WTGXX trailed its benchmark over both the three months and the year ended Aug. 31. For August alone, both reported a 0.29% return at the published precision.
The comparison shows a benchmark gap, not a gap against an identical basket of securities. The index rolls into a Treasury bill each month, while WTGXX's August holdings also included a floating-rate Treasury note and repurchase agreements. Its investment policy also changed in November 2025, within the one-year comparison period.
Fees can sit inside the portfolio
Issuer documents show several ways income shrinks before it reaches a token holder, though they do not break down exactly how much of each fund's gap comes from each cost.
- Superstate's USTB specifies a 0.15% management fee on the underlying Invesco fund, with a monthly rebate for investors holding above $25 million on average.
- Franklin's August prospectus lists a 0.15% management fee and total operating expenses of 0.20% after waivers, with the expense limit running through July 31, 2027.
- Ondo's OUSG waives its 0.15% management fee until Jan. 1, 2027, but fund expenses are capped at 0.15% annually, and underlying funds can deduct their own expenses too.
Faster access can carry a separate cost. USTB's protocol-redemption facility can advance USDC (a stablecoin pegged to the dollar) against redemptions, and those advances may accrue market-rate interest that reduces fund returns. This is a disclosed possibility, not proof that it explains a measured shortfall in any period.
What is confirmed
Confirmed facts include Dune's Sept. 28 statement about the 12 funds, WisdomTree's published WTGXX returns versus its benchmark, the fund's asset size and expense ratio, and the fee structures listed in Superstate, Franklin and Ondo disclosures. Dune's Aug. 28 findings about nine issuers are also confirmed as reported.
What is still unclear
It is not known exactly how much of each fund's shortfall comes from management fees, underlying fund costs, liquidity allocations or redemption financing. The WTGXX comparison is against a benchmark index, not an identical portfolio, and portfolio contents differ across funds that share the "Treasury" label. Whether USTB's redemption advances actually reduced returns in a given period is not established.
Why this matters
Tokenized Treasury products have grown into a nearly $15 billion market. For cash managers, the reported gap reflects a trade-off between returns and features such as stablecoin subscriptions, redemptions and onchain access. Tokenization also offers uses beyond collecting interest: as The Defiant previously reported, BlackRock's BUIDL fund became eligible as trading collateral on Binance in November 2025. A yield-only comparison does not measure that extra access.
What happens next
Dune plans to release a forthcoming real-world asset report, which Arno's Sept. 28 posts previewed.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.