Foreword
In 2025, the crypto industry continues to move toward the future that the market collectively hopes for. Standing in the hopeful present and looking back at the past, one can't help but sigh that 2024 was a year of profound transformation for crypto. This is not only reflected in the institutional breakthroughs brought about by the approval of Bitcoin spot ETFs but also in the fundamental shift in traditional financial institutions' attitudes toward crypto technology, which is directly reflected in market sentiment and prices. Coupled with the successful election of a crypto-friendly Trump at the end of the year, it injects a strong boost into the market.
In this wave of transformation, the most eye-catching is BlackRock, the world's largest asset management company, and its movements in the crypto field. Its main investment, the on-chain money market fund for US short-term treasuries, the BlackRock USD Institutional Digital Liquidity Fund (referred to as the BUIDL fund), has exceeded $530 million, and its business footprint has also expanded to multiple networks such as Aptos and Arbitrum. The integration of DeFi and RWA is gradually becoming an undeniable trend.
Recently, BlackRock has also been continuously pursuing new practices based on this trend: the BUIDL fund has formed a tripartite cooperation with the digital securities platform Securitize and the DeFi infrastructure layer Elixir to launch the deUSD RWA institutional program, building a bridge to the DeFi ecosystem for over $1 billion in institutional RWA assets.
As a connection between BlackRock and the DeFi world, Elixir is not just an 'asset tokenization platform'; it is a complete infrastructure layer. Its core product, deUSD, aims not only to solve the on-chain liquidity issues of institutional assets but also to explore a new path for the coexistence of TradFi and DeFi innovation while ensuring asset security. Perhaps this attempt will carve out a new viable path for DeFi.
This article will explore the new direction of DeFi under the current market trends by deeply analyzing BlackRock's new movements and the key role that Elixir plays as the infrastructure layer in this connection, showcasing the innovative path for traditional financial institutional assets entering the DeFi track.
How does the deUSD RWA operate with institutional involvement in DeFi?
Of course, BlackRock is not the only asset management giant entering this deUSD RWA institutional program; the entire framework also supports other assets such as Hamilton Lane's SCOPE fund. Major institutions have actively extended an olive branch, so how to fully realize on-chain liquidity while ensuring asset security is the top priority of this cooperation. Elixir and Securitize cleverly address these cooperation highlights through innovative technical architecture.
Dual-track parallelism: The perfect combination of yield and liquidity
Through the unique dual-layer architecture design of the deUSD RWA institutional program, it cleverly connects the permissioned environment of traditional finance with the permissionless ecosystem of DeFi.
Permissioned environment: The starting point for asset tokenization
In the first layer, the BUIDL and SCOPE funds undergo initial tokenization through Securitize's 'sToken' technology. This process is based on the ERC-4626 standard, converting traditional financial assets into $sBUIDL and $sSCOPE tokens. Securitize's permissioned environment ensures that the entire tokenization process complies with regulatory requirements, providing necessary compliance guarantees for institutional participants.
Permissionless environment: An extension of DeFi innovation
After tokenization, assets enter Elixir's permissionless environment, which is the second layer of the entire solution. Here, holders of $sBUIDL and $sSCOPE can simultaneously:
Using their tokens to mint deUSD, gaining liquidity in the DeFi ecosystem
Continuing to enjoy stable yields from the underlying assets (such as US short-term treasuries)
Participating in broader DeFi applications without affecting existing yield rights
The brilliance of this dual-layer architecture lies in achieving complete risk isolation:
Clearly, Elixir has incorporated risk isolation into the core considerations when designing deUSD RWA. The standardized interface of ERC-4626 vaults provides a unified standard paradigm for asset valuation and risk monitoring. Through a sophisticated mechanism for decoupling yield rights and liquidity, the original assets (such as treasury yields from BUIDL) are completely separated from the operations on the DeFi interaction layer. Smart contracts ensure the independence of yield rights, meaning that fluctuations on the DeFi side will not affect the security of the underlying assets.
Separation of yield rights and liquidity: The original flow of yield remains unchanged at the Securitize level.
Separation of environments: The permissioned environment ensures compliance, while the permissionless environment provides the space for DeFi development.
Separation of risks: Even if there are fluctuations on the DeFi side, it will not affect the security of the underlying RWA assets.
How does Elixir, favored by BlackRock, support the entire chain?
Elixir's favor from traditional financial giants like BlackRock is no coincidence.
In deep collaboration with BlackRock and Securitize, Elixir has demonstrated mature institutional service capabilities. The project team consists of experienced professionals from top investment banks like Goldman Sachs and Morgan Stanley, who are well-versed in the business needs and compliance demands of traditional financial institutions.
With deep accumulation in the DeFi infrastructure domain, Elixir smoothly provides institutions with complete asset management lifecycle support. From 'DeFi liquidity aggregator' to 'one-stop RWA liquidity solution provider', this bridge connecting TradFi and DeFi can be considered quite solid.
Building institutional-level infrastructure
For institutional users entering DeFi, it is not only necessary to meet the strict requirements of traditional financial institutions regarding security and compliance but also to ensure the system has sufficient scalability and interoperability. Based on an in-depth understanding of institutional needs, Elixir has built a complete solution.
The three-layer security architecture of deUSD
The first layer is the asset isolation layer, where smart contracts achieve complete isolation of institutional assets. Each institution's asset pool has independent risk control parameters and liquidation triggering mechanisms, ensuring that a single institution's risk event does not affect the overall stability of the system.
The second layer is the cross-chain liquidity and pricing layer, where deUSD realizes a unified issuance and redemption mechanism across chains. Regardless of which chain the underlying assets are on, it can maintain unified pricing and liquidity management.
The third layer is the cross-chain liquidity optimization layer, which automatically adjusts the liquidity distribution of deUSD across different chains through a smart market maker (SMM) algorithm, ensuring minimal slippage during cross-chain transfers. This innovation has enabled deUSD to achieve over $800 million in stable trading volume in the past three months.
Cross-chain interoperability architecture
In order to support future broader institutional access, as an expert, Elixir uses its resource accumulation in cross-chain aspects. It has already gone live on mainstream networks such as ETH mainnet, Arbitrum, Avalanche, and Sei, and may integrate Movement, Optimism, Polygon, etc. in the future, achieving liquidity interoperability through a unified cross-chain bridge interface. This ensures that institutions have both cross-chain choices and fund interoperability efficiency.
Through deeply optimized technical implementations, Elixir has successfully established an institutional-level RWA infrastructure that is both secure and reliable, as well as efficient and flexible. However, the innovative value of the technical architecture ultimately has to be reflected through application scenarios. After a detailed analysis of the core asset deUSD in this cooperation, we can find that the design philosophy of this system aligns with the current situation faced by institutional users in the DeFi realm. From asset management to ecological collaboration, and from single-chain deployment to cross-chain integration, deUSD is using its unique technical advantages to redefine what 'institutional-level' DeFi infrastructure is.
Noteworthy synthetic asset deUSD
If Elixir's technical architecture is the skeleton of the entire project system, then deUSD is the heart pumping blood into the overall system. As the core asset of the entire system, the specific design of deUSD is inherently stable.
deUSD is a fully collateralized synthetic dollar with yield attributes supported by the Elixir Network. Its core innovation lies in establishing delta-neutral positions through stETH collateral and ETH perpetual short contracts while obtaining yield through MakerDAO's USDS treasury protocol.
Compared to traditional synthetic assets, deUSD has three significant advantages:
Fully decentralized
The robust validator network is at the core of the Elixir protocol. The Elixir validator network is composed of over 13,000 independent nodes distributed globally, with each node participating in transaction verification and consensus mechanisms. The decentralized validator network does not have a single point of control, ensuring the protocol is free from any centralized interference, thus guaranteeing transparency and security.
Innovative risk management
Anyone can mint deUSD by collateralizing stETH. Each stETH collateral will be used to short an equivalent amount of ETH in the market, and the short position can also capture market positive rates, bringing additional yield to deUSD.
When funding rates are negative, deUSD will dynamically adjust its asset composition ratio according to the balance of OCF (Over-Collateralized Fund, used to support the value of deUSD) to maintain price stability.
Ecosystem integration
deUSD combines Elixir's high-quality resource integration, abstracting products and exchanges from different public chains into a single yield asset, reducing the complexity of operations across different blockchains and exchanges for deUSD holders, making it easier to manage assets and converting more institutions and individuals into potential liquidity providers. deUSD acts like a ticket in Elixir's cooperative ecosystem, allowing participation in staking interactions across multiple platforms and even multiple chains through the use of deUSD, thus achieving multi-chain needs through Elixir.
Unlike many stablecoins, deUSD, as a synthetic dollar, does not maintain stability through 1:1 dollar reserves or centralized issuance but achieves price stability through innovative financial engineering and decentralized mechanisms. This design not only provides greater capital efficiency but also makes the integration of TradFi and DeFi more 'Crypto Native'.
DeFi collaboration to absorb liquidity
This move by BlackRock, characterized as 'old money entering the field', has significantly demonstrated the practicality of deUSD—achieving both safety and yield, bringing the beloved dual-pleasure experience of on-chain players to financial connoisseurs eager for new experiences.
In the DeFi ecosystem, where it is already proficient, deUSD has ample room for development.
Through in-depth integration with mainstream DeFi protocols, deUSD has created a comprehensive liquidity supply system for institutional users. With support from the liquidity optimization layer, institutions can participate in more complex DeFi strategies while ensuring asset security, achieving better yield performance.
Take Curve, as the liquidity center for deUSD, as an example:
Curve can deeply accommodate a large amount of institutional-level liquidity flowing to deUSD from RWA assets—Users can deploy deUSD/USDC, deUSD/USDT, deUSD/DAI, and deUSD/FRAX in the Curve deUSD Pool. LP users not only enjoy trading fee profits but also receive additional rewards from Curve & Elixir Apothecary: Elixir provides up to 5 times the Elixir Potions rewards for liquidity providers on Curve, and LP token staking can earn 10 times the points rewards. This offers additional benefits for liquidity in the RWA direction, maximizing DeFi's layered profits.
Elixir vs Ethena: Two paths for institutional-level DeFi
Coincidentally, as the track gradually heats up, Ethena has also collaborated with Securitize to launch a stablecoin USDtb, similarly supported by the BlackRock BUIDL fund. Will Ethena's solution collide with Elixir's in the institutional-grade DeFi space?
Although Elixir and Ethena are both oriented toward the direction of TradFi+DeFi, they start from two different paths, and there are still some differences:
Different track selections
Ethena: Focusing on the stablecoin track
Ethena has chosen a relatively focused development path. The project uses BlackRock's BUIDL as the core supporting asset to launch the stablecoin product USDtb. This model has the following characteristics:
Supported by a single asset
The operational model is relatively simple, and the risks are controllable.
Elixir: Building a complete ecosystem
In contrast, Elixir has adopted a more comprehensive and systematic approach:
Building a complete RWA-DeFi infrastructure
Supporting diversified financial product innovations
Creating an open ecosystem
Technical architecture
From a technical implementation perspective, the two projects adopt different architectural designs.
Ethena's technical route:
Adopting a direct asset-backed model
The minting and redemption mechanism is relatively simple
Focusing on the security and reliability of stablecoins
Elixir's technical solution:
Building a multi-level asset management system
Achieving cross-chain asset interoperability
Supporting the innovation and expansion of complex financial products
Market positioning
Ethena positions itself as an institutional-grade stablecoin issuer, focusing on:
The product is simple and intuitive
High security
Elixir positions itself as an RWA-DeFi infrastructure provider, emphasizing:
Integrity of the ecosystem
Scalability of products
Diversity of institutional services
The different development paths of the two projects provide new perspectives for thinking about the development of institutional-level DeFi. Whether to focus on specialization or platformization needs to be determined based on the project's own advantages and market demands. Balancing innovation and practicality while ensuring security is key.
Conclusion
This major move by BlackRock is not only a simple attempt at asset tokenization but also a starting point for the deep integration of TradFi and DeFi. Through Elixir's technological innovation and Securitize's compliance infrastructure, we see a mature institutional-grade infrastructure layer that reasonably balances asset security and compliance while unleashing the unique innovative vitality of crypto, proving that DeFi is not merely an insular domain for the crypto field.
From the BUIDL fund to the deUSD RWA institutional program and deep integration with DeFi projects like Curve, this innovative path clearly demonstrates the feasibility of combining institutional assets with crypto assets. The two different development paths of Elixir and Ethena also provide valuable reference examples for the entire industry.
Undoubtedly, as more traditional financial giants like BlackRock enter the field, the demand for and development of institutional-level DeFi will enter the fast lane, and the concept of RWA will no longer be a simple conceptual hype. Whether it can maintain crypto-native attributes while meeting the strict requirements of institutional users will become a new assessment criterion for projects in this cycle. Elixir's practices undoubtedly provide a promising development model for the market.
