“`html
BlackRock, the leading asset management firm globally, is taking significant strides in the world of decentralized finance (DeFi) by expanding access to its tokenized real-world asset fund, known as the BlackRock USD Institutional Digital Liquidity Fund, or BUIDL. Originally available solely on the Ethereum blockchain, the BUIDL fund will now also be accessible on five additional blockchain networks: Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon. This expansion aims to broaden the reach of what has become the largest money-market token currently available.
Expanding Access to DeFi Ecosystems
In a recent announcement on November 13, BlackRock highlighted that this broader accessibility will facilitate greater integration with various DeFi ecosystems across multiple chains. The tokenization of real-world assets (RWAs) such as government bonds and private credit has gained traction as both crypto firms and traditional financial institutions seek to enhance their operations through blockchain technology, aiming for faster settlements and improved efficiency.
Tokenization Strategy and Market Demand
The BUIDL fund, which has been tokenized by Securitize, focuses on short-term, low-risk assets, primarily U.S. Treasury bills and similar interest-bearing securities. Securitize’s CEO, Carlos Domingo, underscored the fund’s mission to create a digital-native ecosystem that maximizes the benefits of tokenization. He shared, “With these new chains, we’ll start to see more investors looking to leverage the underlying technology to increase efficiencies on all the things that until now have been hard to do.”
The demand for tokenized RWAs, particularly stable assets like T-Bills, is surging as investors look for consistent yields. Since its inception in March 2024, the BUIDL fund has seen remarkable growth, currently boasting over $520 million in deposits and leading the market with a total of $2.3 billion in tokenized U.S. Treasury assets. The fund caters to institutional clients and protocol treasuries, offering a stable yielding option while also serving as collateral for DeFi trading activities.
Operational Benefits and Lower Fees
In terms of operational logistics, BUIDL’s management fees vary based on the blockchain used, with lower fees available on select networks. For instance, fees are set at 50 basis points on Ethereum, Arbitrum, and Optimism. However, for Aptos, Avalanche, and Polygon, these fees decrease to 20 basis points, supported by quarterly payments from the respective development foundations like Aptos Foundation and Avalanche (BVI), Inc.
The movement to deploy BUIDL across various blockchains is expected to enhance integration with DeFi platforms, allowing greater access to on-chain yield, peer-to-peer transfers, and real-time dividend accrual. BlackRock emphasized that this multi-chain strategy would enable the fund to support a wider array of blockchain financial products and infrastructure.
Future Trends in Tokenization and Financial Markets
According to insights from the U.S. Department of the Treasury, advancements in tokenization and distributed ledger technology (DLT) could yield improved transparency and liquidity in Treasury markets. By offering real-time insights into trading activities, these innovations align with BlackRock’s objectives to streamline operations, mitigate settlement delays, and enhance regulatory transparency.
The asset management giant’s recent initiatives highlight a broader trend within the financial sector towards tokenized investments. Other major players, such as Franklin Templeton, are also expanding their tokenized funds to additional networks like Base, which is based on Coinbase’s layer-2 blockchain. Colin Butler, Polygon’s global head of institutional capital, estimates the tokenization market—including assets from T-Bills to digital artworks—to represent a staggering $30 trillion global opportunity.
“`