Crypto's 'yield gap' is closing fast as stablecoins and tokenized assets surge: RedStone

Crypto’s yield engine is still in low gear compared to traditional finance, but it’s revving.

A new report from modular blockchain oracle network RedStone finds that only 8%–11% of crypto assets are currently yield-generating, versus 55%–65% in traditional finance — a 5x–6x gap that is narrowing as yield-bearing stablecoins, blue-chip staking products, and real-world assets (RWAs) move onchain at speed.

Stablecoins are digital tokens designed to maintain a 1-to-1 peg to traditional currencies, most often the U.S. dollar. They serve as the cash leg of crypto, enabling instant settlement and hedging against volatility. Today’s stablecoin market exceeds $290 billion, led by Tether’s USDT and Circle’s USDC. But a new class of yield-bearing stablecoins is emerging, RedStone believes.

The project points to an “explosion” in these yield-bearing stablecoins — up roughly 300% year over year — and brisk growth in liquid staking for ETH and SOL. It also flags emerging BTC yield primitives as another emerging catalyst for investors seeking returns on inactive cash.

RWAs refer to tokenized versions of traditional financial instruments, including U.S. Treasuries and corporate debt, as well as real estate, gold, and private credit. Tokenization allows these instruments to trade, settle, and be used as collateral on public blockchains, bringing traditional yield streams into decentralized finance.

Zooming out, macro consultancies and banks have already floated multi-trillion-dollar tokenization forecasts this decade. For example, Deloitte projects that tokenized markets could reach over $4 trillion by 2035.

The view has been echoed by industry incumbents like Ripple, which sees a $19 trillion RWA ecosystem around the same time. RedStone analysts expect that yield-bearing stablecoins could capture a significant portion of this expansion as institutions flock to DeFi.

Where is the yield migrating?

Yield-bearing assets are tokens that generate ongoing returns rather than sitting idle, serving as productive capital in onchain finance. Assets like stETH, yield-bearing stablecoins such as Ethena’s sUSDe, and tokenized Treasuries like BlackRock’s BUIDL fund fall into this category.

RedStone’s thesis opines that these yield-bearing assets are shifting from a niche to the default format for holding value onchain. Data from the oracle network shows that liquid staking tokens on Ethereum have added $34 billion in notional value since early 2023. Similarly, total value locked in liquid restaking protocols like Eigenlayer has skyrocketed, rising from around $1 billion in early 2024 to over $22 billion as of Nov. 12.

At the same time, Solana’s liquid staked supply has roughly doubled over the past year, and early BTC yield designs are beginning to surface as institutions seek hurdle-rate returns without leaving their custody frameworks. That demand is increasingly institutional and infrastructure-led, according to the report, which cites data from RWA.xyz.

RWAs have reportedly expanded from low single digits in 2022 to over $36 billion by November 2025, aided by programmable settlement, 24/7 liquidity, and composability across lending and rate markets.

Notably, differences in methodology and data points have created discrepancies in total RWA figures. The Block’s data dashboard shows nearly $15 billion in RWA TVL by protocol, while DefiLlama reports about $19 billion instead.

RedStone also argues that the composition of crypto yield is evolving. Rather than purely incentive-driven APY, growth is gravitating toward curated collateral (liquid staking, rate-split tokens, tokenized Treasuries) embedded into isolated vaults and risk-tiered money markets. In that model, standardized risk ratings oracles serve as the gating function for scale, just as credit boxes and pricing feeds underpin fixed-income distribution in TradFi.

The GENIUS Act backdrop

Analysts tout the U.S. GENIUS Act as the industry’s biggest regulatory unlock since Bitcoin’s white paper, arguing the law is catalyzing a migration of cash-like instruments and fixed-income yields onto blockchain rails.

The framework’s introduction indicates that policy momentum is catching up, and regulatory clarity now appears to be a swing factor, RedStone analysts wrote. In recent coverage, The Block has tracked how industry stakeholders are trying to shape the GENIUS rulebook.

Silicon Valley giant Andreessen Horowitz, otherwise known as a16z, has urged the Treasury to exclude decentralized stablecoins from direct oversight. U.S. crypto exchange Coinbase also pressed for rules to remain aligned with congressional intent, and BlackRock is reportedly preparing a GENIUS-compliant money-market fund tailored to stablecoin issuers.

Meanwhile, Fed Vice Chair Michael Barr has cautioned about gaps in the statute, while the Treasury has formally opened public comment on implementation.