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 €10,000 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 10,000, covering IT and data infrastructure (EUR 2,000), PhD research support (EUR 4,000), conference presentations (EUR 2,000), and journal submission fees (EUR 2,000).
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. (https://sites.google.com/view/lorenzo-schoenleber/menu)
Best Lorenzo