BlackRock’s BUIDL Expands to Aptos, Arbitrum, Avalanche, Optimism and Polygon

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Hassan Shittu

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Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in...

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November 13, 2024 18:20 EST

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BlackRock, the world’s largest asset manager, is expanding access to its tokenized real-world asset fund, the BlackRock USD Institutional Digital Liquidity Fund, or BUIDL, to five more blockchains.

The BUIDL fund, previously available only on Ethereum, now includes Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon, broadening the accessibility of what has become the largest money-market token of its kind.

BlackRock Expands BUILD to Five New Blockchain Networks: Is Institutional Adoption Just Starting?

According to a November 13 announcement, this will allow greater integration with decentralized finance (DeFi) ecosystems across multiple chains.

The tokenization of real-world assets (RWAs), including instruments like government bonds and private credit, has risen as crypto firms and established financial institutions push to leverage blockchain for operational efficiency and quicker settlements.

The BUIDL fund, tokenized by Securitize, focuses on short-term, low-risk assets, primarily U.S. Treasury bills (T-Bills) and similar interest-bearing securities.

Securitize’s CEO, Carlos Domingo, emphasized the fund’s goal of creating a digital-native ecosystem to maximize tokenization benefits.

“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,” Domingo stated.

As demand grows for tokenized real-world assets (RWAs) like T-Bills, the sector sees increased investor interest due to these assets’ stability and yield.

BUIDL was initially launched in March. Short-term U.S. government bonds back it with a price of $1.

Its growth reflects substantial demand, as it has amassed over $520 million in deposits, according to RWA.xyz. It is leading the $2.3 billion tokenized U.S. Treasury market.

The fund serves institutional clients and protocol treasuries, offering a stable yield option and functioning as collateral for decentralized finance (DeFi) trading. Other DeFi platforms, like Ondo Finance, also build products based on BUIDL.

BUIDL has emerged as the largest tokenized treasury fund by assets under management (AUM), outpacing the Franklin OnChain US Government Money Fund, which holds around $450 million in AUM.

On-Chain Accessibility and Operational Benefits: Interests Growing More than Before

BUIDL’s management fees vary depending on the blockchain, with lower fees offered on certain networks. The fee is 50 basis points on Ethereum, Arbitrum, and Optimism.

For Aptos, Avalanche, and Polygon, the fee drops to 20 basis points, supported by quarterly payments from their ecosystem development foundations: Aptos Foundation, Avalanche (BVI), Inc., and Polygon Labs BD Investments (Cayman) Ltd.

Expanding BUIDL across additional blockchains enables enhanced integration with DeFi platforms, allowing investors to access on-chain yield, peer-to-peer transfers, and real-time dividend accrual.

BlackRock highlighted that this multi-chain approach allows BUIDL to support broader blockchain financial products and infrastructure.

According to the U.S. Department of the Treasury, tokenization and distributed ledger technology (DLT) could improve transparency and liquidity in Treasury markets by providing real-time insight into trading activities.

This aligns with BlackRock’s initiative, as these tokenized funds could help streamline operations, reduce settlement delays, and enhance transparency for regulators and investors.

BlackRock’s move reflects a wider trend in the finance sector towards tokenized investments. Other financial giants, such as Franklin Templeton, are expanding their tokenized funds to networks like Base, Coinbase’s layer-2 blockchain.

According to Colin Butler, Polygon’s global head of institutional capital, the tokenization market, covering assets from T-Bills to digital artworks, is estimated to represent a $30 trillion global opportunity.