Tokenization platform, Securitize announced a new proposal aimed at introducing BUIDL—the BlackRock USD Institutional Digital Liquidity Fund—as an on-chain backing asset for Frax USD, providing exposure to US dollar yield.
BUIDL is a tokenized US Treasury product designed to offer decentralized organizations and institutional investors a blockchain-based investment solution that can serve as a reserve backing for stable assets, alongside other investments. Among its key benefits are yield generation, multiple transfer options, and minimized counterparty risk, thanks to the involvement of industry leaders such as Securitize, BlackRock, and Bank of New York Mellon.
Tokenized real-world assets (RWAs) serve as an effective bridge between traditional finance and decentralized organizations by bringing institutional-grade investments onto the blockchain. Over the past nine months, major players, including decentralized autonomous organizations (DAOs) and protocols, have issued public requests for proposals (RFPs) to explore how RWAs can bolster their treasuries or support stablecoins. These early efforts represent a shift in how decentralized entities manage financial resources and consider cross-industry asset strategies. Furthermore, they lay the foundation for exploring strategies like asset diversification, yield optimization, and portfolio risk management.
As a high-quality tokenized RWA, BUIDL is becoming an integral component of reserve assets across the stable-value token industry. In addition to enhancing Frax USD’s utility, safety, and convenience, Frax USD can reduce counterparty risk by partnering with BlackRock, the world’s largest asset manager, which oversees $849 billion in cash-related products as of September 2024.
The proposal outlines that BUIDL plans to allocate 100% of its total assets into cash, US Treasury bills, notes, and other obligations issued or guaranteed by the US Treasury for both principal and interest. It will also include repurchase agreements secured by such obligations or cash, providing investors exposure to one of the most liquid assets. The fund aims to maintain a stable value of $1 per token, with holders potentially earning yield through daily accrued dividends, which are issued as new tokens to investors’ wallets each month.
As an ERC-20 token, BUIDL can be held by any provider on the Ethereum public blockchain. It is also available natively on networks like Polygon, Avalanche, Optimism, Arbitrum, and Aptos.
Current assets under management (AUM) across all integrated chains can be viewed on platforms like Dune or RWA.xyz. As of December 2024, the total AUM across chains is $561,536,881. Additionally, BUIDL has processed 620 transactions with a total volume of $1.38 billion as of the same date.
What Is Securitize?
As a leader in the tokenization of RWAs, Securitize plays a key role in the ongoing evolution of the financial sector by bringing traditional assets on-chain. The platform collaborates with respected asset managers such as BlackRock, Hamilton Lane, KKR, and others to tokenize funds. Securitize is the exclusive tokenization platform for the fund and acts as BUIDL’s transfer agent and placement agent through its registered broker-dealer, Securitize Markets.
By July 2024, it had facilitated over $1 billion in investments in tokenized securities on its platform, overseeing more than 100 tokenized security issuances and managing over 500,000 investor accounts. Additionally, the company has raised more than $170 million from a combination of traditional financial institutions and blockchain industry leaders.
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