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Treasury Yield
Real-World Assets • Bullion • Physical Collateral
the global benchmark for risk-free returns
Treasury Yield is the return paid to holders of U.S. government debt securities such as Treasury bills (T-bills), notes, and bonds. It represents the annualized interest rate earned from these instruments and is widely regarded as the global benchmark for risk-free yield. Treasury yields are foundational to traditional financial markets and increasingly relevant within tokenized and decentralized ecosystems.
Use Case: A stablecoin like $RLUSD uses short-term Treasury yields as the source of backing and passive income, combining sovereign-grade safety with smart contract utility.
Key Concepts:
- Duration Spectrum — T-bills (1 month to 1 year), Notes (2–10 years), Bonds (10–30 years)
- Macro Signal — Rising yields may signal inflation or tightening policy; falling yields suggest risk-off sentiment
- Yield Curve — The slope between short- and long-term yields provides insight into economic expectations
- On-Chain Yield — Tokenized Treasuries allow protocols to tap into sovereign yield through smart contracts
- Tokenized Treasuries — Blockchain representations of government bonds enabling on-chain yield
- Yield-Bearing Stablecoin — Stablecoins that pass treasury yield through to holders
- Quantitative Easing — Fed policy that suppresses treasury yields by buying bonds
- Quantitative Tightening — Fed policy that raises yields by reducing bond holdings
Summary: Treasury yield is a core benchmark in global finance, shaping credit markets, loan rates, and investor sentiment. Its integration into blockchain ecosystems through tokenized Treasuries and stablecoins like $RLUSD creates a trusted on-chain yield source. As Web3 matures, Treasury yield represents the convergence of monetary policy with decentralized financial infrastructure.
Treasury Yield Spectrum
understanding duration and yield relationships
1M T-Bill
Shortest
2Y Note
Short
10Y Note
Medium
30Y Bond
Longest
Shortest
2Y Note
Short
10Y Note
Medium
30Y Bond
Longest
Short Duration (T-Bills)
1 month to 1 year maturity
Lowest interest rate risk
Most liquid, easiest to roll
Preferred for stablecoin backing
Yield: Currently ~4.5-5%
1 month to 1 year maturity
Lowest interest rate risk
Most liquid, easiest to roll
Preferred for stablecoin backing
Yield: Currently ~4.5-5%
Medium Duration (Notes)
2 to 10 year maturity
Moderate interest rate risk
Balance of yield and stability
Used for yield optimization
Yield: Currently ~4-4.5%
2 to 10 year maturity
Moderate interest rate risk
Balance of yield and stability
Used for yield optimization
Yield: Currently ~4-4.5%
Long Duration (Bonds)
10 to 30 year maturity
Highest interest rate risk
Price swings with rate changes
Used for long-term strategies
Yield: Currently ~4.5-5%
10 to 30 year maturity
Highest interest rate risk
Price swings with rate changes
Used for long-term strategies
Yield: Currently ~4.5-5%
Duration Risk Explained
Longer duration = more price volatility
If rates rise, bond prices fall
10Y note loses ~8% per 1% rate rise
30Y bond loses ~15%+ per 1% rate rise
Short-term = safer for backing
Longer duration = more price volatility
If rates rise, bond prices fall
10Y note loses ~8% per 1% rate rise
30Y bond loses ~15%+ per 1% rate rise
Short-term = safer for backing
Why T-Bills for Crypto: Most tokenized treasuries use short-term T-bills because they have minimal price volatility. The backing stays stable even if interest rates change, making them ideal for stablecoin reserves.
Yield Curve Explained
what the shape of the curve tells us about the economy
Normal Curve (Upward Sloping)
Short-term yields lower than long-term
Economy healthy, growth expected
Investors demand premium for time
Standard market conditions
Short-term yields lower than long-term
Economy healthy, growth expected
Investors demand premium for time
Standard market conditions
Flat Curve
Short and long-term yields similar
Uncertainty about future direction
Transition period in cycle
Watch for next move
Short and long-term yields similar
Uncertainty about future direction
Transition period in cycle
Watch for next move
Inverted Curve (Downward Sloping)
Short-term yields higher than long-term
Recession signal (historically accurate)
Market expects rate cuts ahead
Risk-off positioning begins
Short-term yields higher than long-term
Recession signal (historically accurate)
Market expects rate cuts ahead
Risk-off positioning begins
Steepening Curve
Gap between short and long widens
Often follows Fed rate cuts
Economy expected to recover
Risk-on signal for crypto
Gap between short and long widens
Often follows Fed rate cuts
Economy expected to recover
Risk-on signal for crypto
Crypto Correlation: Yield curve inversions have preceded every U.S. recession since 1970. When the curve inverts, risk assets (including crypto) often sell off. When it steepens again, liquidity returns—watch for this as a cycle timing signal.
Treasury Yields vs Crypto
how yield changes impact digital asset markets
Rising Yields = Headwind
Higher risk-free rate = more competition
Why hold volatile crypto for 10% when treasuries pay 5%?
Dollar strengthens, crypto weakens
Capital flows from risk to safety
DeFi yields less attractive comparatively
Higher risk-free rate = more competition
Why hold volatile crypto for 10% when treasuries pay 5%?
Dollar strengthens, crypto weakens
Capital flows from risk to safety
DeFi yields less attractive comparatively
Falling Yields = Tailwind
Lower risk-free rate = less competition
Investors seek yield in riskier assets
Dollar weakens, crypto strengthens
Capital flows from safety to risk
DeFi yields become more attractive
Lower risk-free rate = less competition
Investors seek yield in riskier assets
Dollar weakens, crypto strengthens
Capital flows from safety to risk
DeFi yields become more attractive
Current Environment (2024-2025)
Yields elevated at 4-5%
Creating opportunity cost for crypto
Tokenized treasuries bridging the gap
Yield-bearing stables capture this rate
Watch Fed policy for direction
Yields elevated at 4-5%
Creating opportunity cost for crypto
Tokenized treasuries bridging the gap
Yield-bearing stables capture this rate
Watch Fed policy for direction
Strategic Response
Use yield-bearing stables in bear markets
Capture treasury yield while waiting
Rotate to crypto when yields fall
Tokenized treasuries = productive patience
Don’t fight the Fed
Use yield-bearing stables in bear markets
Capture treasury yield while waiting
Rotate to crypto when yields fall
Tokenized treasuries = productive patience
Don’t fight the Fed
The Bridge: Tokenized treasuries eliminate the opportunity cost problem. Instead of choosing between 5% treasuries and 0% stables, you get both—stable value plus sovereign yield on-chain.
Fed Policy Impact on Treasury Yields
how monetary policy drives yield changes
Rate Hikes (Tightening)
Fed raises benchmark rate
Short-term yields rise quickly
Long-term yields may rise slower
Curve often flattens or inverts
Risk assets sell off
Dollar strengthens
Fed raises benchmark rate
Short-term yields rise quickly
Long-term yields may rise slower
Curve often flattens or inverts
Risk assets sell off
Dollar strengthens
Rate Cuts (Easing)
Fed lowers benchmark rate
Short-term yields fall quickly
Long-term yields may fall slower
Curve often steepens
Risk assets rally
Dollar weakens
Fed lowers benchmark rate
Short-term yields fall quickly
Long-term yields may fall slower
Curve often steepens
Risk assets rally
Dollar weakens
Quantitative Easing (QE)
Fed buys treasuries
Suppresses yields artificially
Injects liquidity into system
Asset prices inflate
Bullish for crypto
Creates TINA (no alternative)
Fed buys treasuries
Suppresses yields artificially
Injects liquidity into system
Asset prices inflate
Bullish for crypto
Creates TINA (no alternative)
Quantitative Tightening (QT)
Fed sells/lets treasuries mature
Yields rise as supply increases
Drains liquidity from system
Asset prices pressured
Headwind for crypto
Creates opportunity cost
Fed sells/lets treasuries mature
Yields rise as supply increases
Drains liquidity from system
Asset prices pressured
Headwind for crypto
Creates opportunity cost
Cycle Timing: Fed policy drives liquidity cycles. Rate cuts and QE = crypto bull markets (2020-2021). Rate hikes and QT = crypto bear markets (2022). Watch the Fed for macro timing signals.
Where to Track Treasury Yields
resources for monitoring yield movements
Official Sources
U.S. Treasury Direct (treasury.gov)
Federal Reserve (federalreserve.gov)
FRED Economic Data (fred.stlouisfed.org)
Daily rates, historical data
U.S. Treasury Direct (treasury.gov)
Federal Reserve (federalreserve.gov)
FRED Economic Data (fred.stlouisfed.org)
Daily rates, historical data
Market Data
TradingView (10Y, 2Y charts)
Bloomberg Terminal (professional)
Yahoo Finance (free)
Real-time and intraday
TradingView (10Y, 2Y charts)
Bloomberg Terminal (professional)
Yahoo Finance (free)
Real-time and intraday
Key Rates to Watch
10-Year Treasury (benchmark)
2-Year Treasury (Fed policy proxy)
2Y/10Y Spread (curve shape)
Fed Funds Rate (overnight rate)
10-Year Treasury (benchmark)
2-Year Treasury (Fed policy proxy)
2Y/10Y Spread (curve shape)
Fed Funds Rate (overnight rate)
Crypto-Specific Tools
DefiLlama (tokenized treasury TVL)
Ondo Dashboard (USDY rates)
MakerDAO (DSR rate tracking)
On-chain yield comparisons
DefiLlama (tokenized treasury TVL)
Ondo Dashboard (USDY rates)
MakerDAO (DSR rate tracking)
On-chain yield comparisons
What to Monitor: Watch the 10Y as the benchmark rate. Watch the 2Y/10Y spread for curve shape. Watch Fed announcements for policy direction. These three signals give you 80% of what you need for macro positioning.