The tokenized U.S. Treasury market has grown to roughly $16.19 billion in total distributed value, but only 0.7% of those assets are being used in decentralized finance (DeFi) lending and borrowing protocols. Aave V3 holds 64.1% of that utilized market. Circle’s USYC leads the broader market at approximately $3.0 billion, followed by BlackRock’s BUIDL at $2.7 billion and Ondo’s USDY at $2.1 billion. The wider tokenized real-world asset market is estimated at between $33 billion and $60 billion, depending on measurement. Analysts say attractive Treasury yields, smart-contract risk, regulatory uncertainty, fragmented liquidity and compliance challenges are limiting DeFi adoption. Aave’s Horizon market, launched in August 2025 for compliant real-world asset collateral, has attracted between $440 million and $510 million in deposits. The 0.7% utilization rate is more significant than Aave’s 64.1% share because it shows how little of the overall Treasury-token market is active in DeFi; each basis-point increase in utilization would represent tens of millions of dollars in newly active capital.