What happened
Ondo Finance's USDY, a tokenized note backed by short-dated US Treasuries and bank deposits, overtook BlackRock's BUIDL on Tuesday to become the largest product in the tokenized Treasury category, according to a report from AMBCrypto citing on-chain data. Total value locked in USDY crossed $2.37 billion, edging past BUIDL for the first time since BlackRock launched the fund in March 2024 with Securitize as its tokenization partner.
USDY's climb isn't new. Ondo has been grinding higher through the back half of 2026, pushing distribution across Ethereum, Solana, Sui, Mantle, and Aptos. BUIDL, by contrast, has stayed concentrated in a narrower set of institutional wallets, with its growth tied to allocations from firms like Ondo itself, Ethena, and a handful of DAOs that use it as reserve collateral. The flip reads less like a one-day sprint and more like a trend line finally crossing.
Why it matters
BUIDL was the signal event for tokenized Treasuries. When BlackRock, the world's biggest asset manager, put a Treasury fund on-chain in 2024, it told every allocator with a compliance desk that this corner of crypto was investable. That BUIDL is now in second place, bumped by a crypto-native issuer most TradFi desks still can't name on a cold call, is the story.
The headline looks like a win for crypto-native product design. The flow picture backs it up. Ondo built USDY as a bearer-style token that moves across chains and tucks into DeFi primitives. BUIDL moves inside a smaller permissioned perimeter. Different products, different buyers, same yield curve underneath. USDY's lead suggests the market is paying up for composability and multi-chain reach, not brand.
One editorial read: this is the clearest datapoint yet that the tokenized Treasury market is bifurcating. BlackRock owns the institutional-only, compliance-heavy slice. Ondo owns the on-chain-native slice that plugs into lending markets, perp collateral, and DeFi vaults. Both can grow. Only one of them is scaling faster right now.