How onchain lending and the tokenized carry trade are driving demand for tokenized assets

The report argues the tokenized carry trade—pledging yield-bearing tokens as collateral, borrowing stablecoins, and reinvesting via looping—now drives tokenized asset demand. It traces four stages: incentive-subsidized borrowing, liquid staking carry, funding-rate carry, and tokenized yield carry. Tokenized Treasuries total $14.4 billion, tokenized credit $8.1 billion, and active strategies $4.3 billion. A worked example shows a 9%-yielding credit product levered 3x producing a 17% equity return, with liquidation at an 80% LTV threshold.

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