VanEck’s VBILL Now Accepted as Collateral on Aave Horizon
VanEck has integrated its tokenized U.S. Treasury fund, VBILL, into Aave’s Horizon Real-World Asset (RWA) Market on Ethereum. This move links a traditional fixed-income product with a decentralized lending platform designed for institutions.
Users can use VBILL as collateral to borrow RLUSD and increase yield through looping strategies. The process depends on VBILL returns staying above borrowing costs, but it carries liquidation risks.
Chainlink’s NAV oracle supplies pricing data, while Securitize’s infrastructure supports instant issuance. This combination aims to keep operations transparent and compliant with regulations.
VBILL Bridges Traditional Finance and DeFi
Launched in May 2025, VBILL represents shares in the VanEck Treasury Fund. The fund holds short-term U.S. Treasury bills and similar cash-like assets. Each token targets a $1 value and pays daily yield. VBILL runs on multiple blockchains including Ethereum, Solana, BNB Chain, and Avalanche.
According to Aave data, VBILL has a liquidity of $9.17 million and a 7-day yield of 3.93%. Borrowing RLUSD costs about 2.84%. This creates opportunities for yield enhancement by depositing VBILL as collateral, borrowing RLUSD, converting it to USDC, and buying more VBILL.
Repeating this cycle can increase returns from 4.84% for one round to about 5.5% after several iterations, depending on market factors.
Technology and Institutional Benefits
VanEck confirmed VBILL’s approval as qualified collateral on Aave Horizon. Chainlink’s NAVLink oracle provides real-time asset valuations, while the Securitize DS Protocol allows instant token issuance. This makes yield loops more efficient.
Securitize plans to add its Trusted Single Source Oracle for improved price accuracy. Horizon’s permissioned market restricts access to approved participants, ensuring institutional compliance and on-chain transparency.
Kyle DaCruz, VanEck’s Director of Digital Assets Product, said, “Institutional investors can now leverage the safety and transparency of tokenized Treasuries while accessing the efficiency and composability of DeFi.”
Risks and Outlook
Tokenized Treasuries like VBILL are poised to become key sources of on-chain liquidity. However, returns depend on VBILL yields exceeding RLUSD borrowing costs. Falling yields or rising costs may reduce profits.
Leveraged strategies carry risks such as liquidation in volatile markets or VBILL prices dropping below $1. Proper risk management and collateral monitoring are essential.
This integration marks progress in bringing regulated real-world assets into decentralized finance. It offers a transparent and compliant way for institutions to interact with on-chain markets using familiar assets.
