[███░░░░]: Byzantine Vault Tolerance

Welcome to the TAC's Progress Bar, where we combed through 222 relevant tokenization news stories from the week, analyzed the key stories on our weekly podcast, then distilled what you need to know into a few hundred words in this newsletter. Delivered to your inbox in time for Friday happy hour in NYC (usually).

The regulators showed up this week. The SEC and CFTC dropped joint crypto classification guidance, NASDAQ got the green light to trade tokenized securities, and Moody's launched an official stablecoin ratings methodology. We had Brian Choe, Head of Research @ RWA.xyz, join us on The First Trillion this week to discuss his recent report on Vaults (full summary below and report available here).

Maddie's missed connections

We recently launched Maddie, our AI superconnector and we think there are a few people you all would want to meet. Reply to this email or have a chat with Maddie directly to connect with them.

• Former SEC & Skadden lawyer who just launched a tokenization marketplace with a FINRA-approved broker-dealer. Now hunting for 10–20 issuers across private credit, real estate, and IP.
• A patent & scientific IP tokenization outfit with assets in hand and a Delaware C-corp wrapper is looking to connect with IP aggregators and family offices writing $5–50M checks.

A gift for our loyal subscribers: discounted tickets to RWA Summit! We're headed to Cannes in a couple weeks for the industry's leading event, RWA Summit, and we'd love to see you. Apply to join here and use our discount code "TAC25 " to get 25% off.

📈 RWA market cap was up 2% WoW to $27.3 billion
🏆 Biggest RWA winner: JTRSY (Centrifuge) gained 30%, up to $800M
🏆 Biggest network winner: Ethereum added $200M, approaching $16B in RWA supply

📈 Stablecoin market added just under $1B, now at $301.7B and nipping at all-time highs
🏆 Biggest stablecoin winner: USDT added ~$750M
🏆 Biggest network winner: Polygon added ~$100M

📈 Onchain risk free rates:

• Short term treasuries (1m): down 2 bps
• On-chain rate: down 2 bps, still 70 bps below the off-chain risk-free rate

Stories we're tracking this week

• The SEC and CFTC issued joint crypto classification guidance creating a five-category taxonomy (digital commodities, collectibles, tools, stablecoins, and digital securities) that supersedes the universally despised 2019 framework. Bitcoin, Ethereum, Solana, and other blue-chip tokens now fall under digital commodities regulated by the CFTC, and the guidance creates a graduation path for tokens to evolve from securities to commodities through genuine decentralization.
• The SEC approved NASDAQ's plan to trade tokenized securities through the DTC. Initially limited to the most liquid stocks and indices, this is a stepping stone toward self-custody of tokenized securities and eventually bridging into DeFi once stablecoins flatten settlement times.
• Moody's became the first NRSRO (gated) with an official stablecoin rating methodology, going beyond reserve quality to account for operational and technology risk. Institutional adoption runs on ratings, and this determines who makes the approved list for 40 Act funds and trading desks.
• Hyperliquid officially licensed the S&P 500 index from S&P for 24/7 leveraged trading with up to 50x exposure, marking another step toward permissionless markets eating into traditional trading hours.

Shout outs:

• Congrats to our friends at Centrifuge on the Janus Treasury Fund being the biggest RWA winner this week, up 30% to $800M.
• Tempo (Stripe x Paradigm) hit mainnet and launched MPP, their AI agent payments protocol extending the x402 standard. Think: 10 cents for a single article instead of an annual subscription.
• BVNK's $1.8 billion acquisition by MasterCard has officially closed. Congrats to both teams.
• Injective added native USDC to their platform. Congrats to the team.

All about Vaults (feat. Brian Choe)

The SEC and CFTC dropped joint classification guidance that supersedes everything the industry hated about the old framework. NASDAQ got approved to trade tokenized securities. Commissioner Peirce publicly apologized for past treatment of the crypto industry. Moody's launched official stablecoin ratings. And Brian Choe from rwa.xyz joined the show to break down why every TradFi institution calling him right now is asking the same question: what are vaults and how do I use them (full summary below and report available here)?

The episode is available below and we've summarized it for you here.

The single most common inbound question from TradFi institutions hitting up rwa.xyz right now? Vaults. Not "what is tokenization" or "how do I issue on-chain." They have moved past that. The question is now: how do I plug into DeFi infrastructure to actually create demand for my tokenized assets?

Brian Choe, head of research at rwa.xyz, joined the show to walk through his team's new vaults primer, a document specifically designed for institutional asset managers, not crypto natives. The core concept: allocation vaults sit on top of lending and borrowing markets, accept deposits (typically stablecoins), and allocate capital across various on-chain markets based on predefined parameters. Think of it as the 401(k) problem solved with smart contracts. There are hundreds of products, most sound alike, and most people don't want to figure out the optimal allocation themselves. A vault curator handles that, similar to how a target-date fund manager would.

Brian laid out a three-phase arc of tokenized assets that frames where we are perfectly. Phase one (2022-2023) was about operational efficiency and cost savings. Firms like Franklin Templeton launched tokenized funds emphasizing blockchain's throughput and reconciliation benefits. Phase two kicked in when on-chain yields dropped during the bear market while the Fed was hiking, creating this inversion where risk-free treasury rates exceeded what you could earn in DeFi. That drove a gold rush of tokenized treasuries being minted on-chain, and institutions realized blockchain wasn't just a cost play but an entirely new distribution channel with real demand from crypto-native stablecoin holders.

Now we are in phase three: pairing tokenized assets with DeFi infrastructure to create a demand flywheel. Just tokenizing an asset, however good it may be, is not enough. You need to connect it to composable, programmable markets. And that is exactly what vaults do.

Charlie drew what might be the best analogy yet: vaults are the next ETF. ETFs started as a tax and operational efficiency play, then became the dominant distribution channel for retail access, and eventually got their own regulatory treatment. Vaults are following the same trajectory. They make access more efficient, they are becoming the primary way people interact with tokenized assets, and regulation will eventually catch up with specific frameworks.

One important nuance that came up: the lending protocols underneath these vaults (Morpho, Euler, Kamino, etc.) function as platforms, not brokers. There is no intermediary exercising discretion in the traditional prime brokerage sense. These are smart contracts with set parameters. That distinction matters enormously as regulators figure out how to classify these activities. The underlying assets may be securities, but the protocol layer is asset-agnostic infrastructure. How regulators view the intersection of asset classification and on-chain activity remains one of the biggest open questions in the space, however.

Brian's parting thought was perfect: we are at the end of the beginning. Not the middle. Not the endgame. The possibilities for customization and composability through stacking smart contract layers are genuinely endless, and institutions are just now starting to see it.

The full vaults report is available here.

Stay ahead of the curve

Be sure to follow us on X, LinkedIn, and Spotify for real-time updates, behind-the-scenes insights, and the occasional hot take that didn't make it into the Progress Bar or the TACo Time episode or summary.

Until next time,

The TAC Team