The four dollar structures, and why only one of them is boring
Every dollar token on-chain is one of four structures. Ticker-level diversification across a single structure is not diversification at all.
One dollar, four balance sheets
A dollar token is a claim. What differs is the balance sheet standing behind the claim and who is legally on the hook when it stops being worth a dollar.
Fiat-reserve tokens hold bank deposits and bills at a custodian. Tokenized Treasury funds hold securities in a fund wrapper. Overcollateralised tokens hold crypto in on-chain vaults. Delta-neutral synthetics hold spot crypto plus an offsetting short position on a centralised venue.
- Fiat reserves fail through banking and custody
- Tokenized treasuries fail through fund operations and gating
- Overcollateralised debt fails through liquidation mechanics in a crash
- Delta-neutral synthetics fail through negative funding and exchange counterparty risk
Correlation is the hidden position
The four largest fiat-backed tokens hold overlapping exposure to the same short-dated Treasury curve and, historically, an overlapping set of banking partners. In March 2023 that correlation was made explicit: a single regional bank failure moved USDC 12% and dragged DAI with it through the peg stability module.
The lesson institutions took from that was not 'avoid USDC'. It was that structure-level concentration, not issuer-level concentration, is what actually breaks portfolios.
The boring one
Tokenized Treasury funds are the only structure whose yield does not depend on somebody else's leverage. They are also the least convenient — KYC, whitelists, settlement windows. That inconvenience is the entire point: it is what keeps the claim clean.