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BUIDL: Setting New Standards in Tokenization

BUIDL: Setting New Standards in Tokenization

TL;DR

  • Rapid Growth: BlackRock’s BUIDL has become the world’s largest tokenized treasury fund in under six weeks, with $375 million in deposits, capturing nearly 30% of the $1.3 billion market.
  • Tokenization Trend: The fund’s success highlights the growing interest in tokenizing real-world assets like U.S. Treasuries, which offer a low-risk option for earning stable yields within the blockchain ecosystem.
  • Market Dynamics: BUIDL’s rise is contrasted with Franklin Templeton’s BENJI, which saw minor outflows, indicating a shift in the tokenized treasury market’s landscape.

The cryptocurrency ecosystem is buzzing thanks to BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, which has emerged as the world’s largest tokenized treasury fund. This remarkable achievement was reached in less than six weeks, surpassing the year-old tokenized treasury fund by Franklin Templeton.

The BUIDL fund, which is represented by the BUIDL token on the Ethereum network, is backed by U.S. Treasury bills, repo agreements, and cash. It now boasts an impressive $375 million in deposits after a significant $70 million inflow last week. This rapid growth has allowed BlackRock to capture almost 30% of the $1.3 billion tokenized Treasury market since its debut on March 21.

The surge in BUIDL’s market share is largely attributed to the growth of Ondo Finance’s OUSG token, which leverages BlackRock’s token as a reserve asset and enjoyed $50 million of inflows in a single week. 

BUIDL vs. BENJI: The Tokenized Treasury Showdown

BUIDL: Setting New Standards in Tokenization

The BENJI token, representing Franklin Templeton’s offering, experienced minor outflows during the same period, sliding to $368 million in assets under management. BlackRock’s entry into the tokenized asset space is a significant move for the industry.

The process of tokenization involves converting traditional assets like bonds and credit into digital tokens on blockchain platforms. This innovation offers numerous benefits, including faster and around-the-clock settlements, increased operational efficiency, and greater transparency.

Tokenization of real-world assets (RWA) has gained traction among digital asset firms and traditional finance giants, with U.S. Treasuries becoming a popular choice for tokenization efforts. These instruments are seen as a low-risk, well-known option for investors to park their on-chain cash and earn a stable yield without leaving the blockchain ecosystem.

The tokenized treasury market has experienced exponential growth, swelling from nearly $100 million in early 2023 to nearly $1.3 billion, propelled in part by BlackRock’s entrance into the competition. This trend underscores the increasing integration of blockchain technology into mainstream finance, paving the way for a new era of digital asset management.

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