Chris Curl,
Editor
Nov. 14, 2024
In a major development in the world of decentralized finance (DeFi), BlackRock (NYSE: BLK), the world’s largest asset-management firm, has announced the expansion of its tokenized real-world asset fund, BUIDL, to five additional blockchain networks.
This move sees BlackRock extending the product beyond its initial Ethereum launch, offering improved accessibility and diversification. As of now, BUIDL is accessible on the Aptos, Arbitrum, Avalanche, Optimism's OP Mainnet, and Polygon networks.
Introduced in March, the BUIDL fund is securely backed by short-term U.S. Treasuries and has rapidly accumulated $520 million in assets.
It serves as the largest blockchain-based money market fund available.
The BUIDL token, priced at an anchor value of $1, is utilized by institutions and protocol treasuries to optimize their on-chain cash management, providing them with an opportunity to earn a yield or using it as collateral for trading.
Tokenizing Everything
Tokenization of real-world assets has emerged as a significant trend marrying traditional finance with cutting-edge digital technology. Through blockchains, financial institutions are exploring enhanced settlement efficiencies and operational cost reductions.
"We wanted to develop an ecosystem that was thoughtfully designed to be digital," said Carlos Domingo, CEO and co-founder of Securitize – a leading tokenization platform.
BlackRock's strategic expansion aligns with this drive, leveraging the underlying blockchain technology to bolster efficiency and broaden investor participation.
BUIDL's management fee strategy varies across networks.
On Ethereum, Arbitrum, and Optimism, fees are 50 basis points, whereas they drop to 20 basis points on Aptos, Avalanche, and Polygon. Several ecosystem development organizations, including Aptos Foundation and Avalanche (BVI), Inc., have agreed to contribute to BlackRock with quarterly fees.
This expansion not only fortifies BlackRock's position in the tokenized asset market but also underscores a broader industry move toward integrating real-world assets with blockchain.
As more assets get tokenized and integrated into blockchain networks, it is expected that the demand for digital custodial services will rise. This creates opportunities for companies like BlackRock to expand their business models and offer custody solutions specifically catered to tokenized assets.
Not only that, as the technology matures and becomes more widely adopted, we can expect to see increased regulatory clarity around tokenization, making it easier for traditional financial institutions to participate in this space.
This is a major step towards mainstream adoption and recognition of blockchain technology in traditional finance.
As I’ve been saying for years, “they want to tokenize everything.”
This is the future of finance.
And it’s why I am invested in cryptocurrencies as well as guiding my readers through my publication Crypto Cycle to do the same.
You don’t want to miss out on this trend particularly as Bitcoin hits new all-time highs.
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Keep coming back,
Chris Curl
Editor, Daily Profit Cycle