cp: 167
title: The Tokenization of Money Market Funds (TMMFs)
authors: lschoenl
contributors:
beneficiary:
wallet: 13zDsuyqze6fh2u7i1gsK3BsW1Ag3cGzvznY4eABmfU6DYQ8
uses-component:
technical-proposal: no
requires-onchain:
impacts/modifies:
status: rfc
date-proposed: [2025-08-21]
date-ended:
TL;DR:
We’re launching a research project on “Tokenization of Money Market Funds (TMMFs) in DeFi,” analyzing how tokenized MMFs enhance efficiency, liquidity, and transparency in financial markets. We compare TMMFs with traditional MMFs, also examining their role in DeFi (DEXs, lending protocols), and explore implications for regulation and market stability. The study aims to inform industry, academia, and policymakers with the first results by the end of 2025/mid-2026. We’re seeking €2,500 in funding to support data collection, research, and dissemination, and any amount helps.
Longer Version:
This proposal seeks funding to support a new research initiative entitled “The Tokenization of Money Market Funds (TMMFs) in Decentralized Finance.” This project investigates the rapidly growing field of tokenized RWAs, with a particular focus on money market funds (MMFs) being integrated into decentralized finance ecosystems.
TMMFs are poised to transform traditional financial infrastructure by combining the security and liquidity of MMFs with the programmability and efficiency of blockchain technology. TMMFs offer transparent, low-cost access to short-term yield-generating instruments and can serve as collateral on decentralized lending protocols or be traded on DEXs. These innovations not only increase efficiency and liquidity but also present new dynamics in risk, market structure, and financial stability.
As a pioneer in the issuance of TMMFs, your organization stands at the forefront of this transformation. Our study provides a comprehensive, data-driven analysis comparing TMMFs and traditional MMFs across key dimensions such as cost, liquidity, settlement speed, and transparency. We also explore how TMMFs challenge the dominance of stablecoins in crypto markets and how their integration into DEXs and lending protocols influences investor behavior and systemic stability.
Expected Contributions and Strategic Value:
- A clear articulation of how tokenization enhances efficiency, lowers operational costs, and improves market access and liquidity.
- Insights into regulatory and financial stability implications, offering issuers a framework to anticipate challenges and develop robust compliance and risk management strategies.
- Practical use cases demonstrating how TMMFs integrate into broader DeFi ecosystems, showcasing institutional readiness and appeal.
- Empirical findings with high potential for publication in a top-tier finance journal and impact within both policy and investor communities.
Our goal is to provide actionable insights for market participants (investors), regulators, and policymakers, while also contributing to academic discourse. Given the strong interest in digital finance from both public and private institutions, reinforced by the G20 and BIS initiatives on tokenization, this project is both timely and aligned with global financial priorities.
We would be delighted to explore opportunities for collaboration or to share further details if this aligns with your current initiatives.
The project will begin in July 2025. We expect the first initial paper draft to be completed by Dezember 2025.
The total budget for which we are asking is EUR 2,500 (approx. 8.000 CFG), covering **IT and data infrastructure **, and PhD research support.
About me: I am an Assistant Professor in Finance at the Collegio Carlo Alberto and the University of Turin. I obtained my Ph.D. at the Frankfurt School of Finance. I am is also associated with the Fintech & Digital Finance Chair at Paris Dauphine University. My specialization areas are empirical asset pricing (option-implied information) and DeFi. (Lorenzo Schönleber)
1. Research Objectives & Outcomes
Questions:
- How do Tokenized Money Market Funds (TMMFs) interact with existing stablecoins and traditional MMFs?
- Do TMMFs attract demand away from stablecoins, from traditional MMFs, or create new investor demand?
- What are the systemic risks of TMMFs (e.g., liquidity, contagion, collateral reuse)?
- What is the role of TMMFs as collateral in DeFi, and how might they challenge stablecoins in collateral markets?
Outputs: Working paper and policy brief
Impact:
- Contribute to the academic and policy debate on tokenization of RWAs.
- Provide actionable insights for builders and policymakers on risks, adoption paths, and design choices.
2. Methodology & Timeline
- Approach: On-chain data (Ethereum logs, rwa.xyz, CoinGecko) with fund filings to analyze inflows/outflows, wallet activity, and portfolio composition. Case studies include BUIDL, OUSG, and JTRSY. For the analysis of the MMFs, we use iMoneyNet and Crane Data, which are premier providers of MMF data widely used by financial professionals and researchers.
- Milestones: Dataset (Q3 2025), first paper/policy brief (Q4 2025), conference dissemination (Q1 2026), final outputs (Q2 2026).
3. Team & Capabilities
- Team: Lorenzo Schönleber (lead, Collegio Carlo Alberto & University of Turin), with Federico Ravenna (CCA/HEC), Alfred Lehar (UCalgary)
- Strength: Proven DeFi research track, technical capacity for on-chain analysis, strong academic and policy network.
- Budget Justification (€2,500) (approx. 8.000 CFG)
- €3k: Research Assistance and data collection and cloud/infra.
5. Value for CentrifugeDAO
- Direct value: JTRSY featured in comparative analysis with leading TMMFs; insights on adoption, collateral use, and risks.
- Strategic fit: Research can adapt to Centrifuge priorities (integration of MMFs into its infrastructure, regulatory implications for RWAs).
- Visibility: Independent, data-driven outputs highlighting Centrifuge as a leader in tokenized RWAs.
6. Synergies
- Data access: Granular metrics on JTRSY subscriptions, redemptions, portfolio holdings of the underlying funds, and wallet distribution would greatly enrich the analysis.
- Mutual value: The research could provide Centrifuge with visibility, strategic insights, and policy-aligned narratives, while allowing us to produce more precise and impactful outputs for academia and policymakers.
Best Lorenzo