Table of Contents
What is the BUIDL Index?
Innovative Perpetual Market Mechanics
Technical Advancements and Strategic Partnerships
Injective, a leading platform in decentralized finance, launched the BUIDL Index. This index is reportedly the world’s first perpetual market designed to track the supply of BlackRock's $BUIDL Fund.
The introduction of this index offers unprecedented 24/7 exposure to tokenized assets, including U.S. treasuries, with options for leverage, according to the Injective team.
What is the BUIDL Index?
Unlike traditional asset tracking, which typically focuses on price, the BUIDL Index monitors the underlying supply of BlackRock's $BUIDL Fund itself. This approach allows users to gain insights and exposure based on the supply dynamics of the fund.
The BUIDL Fund, BlackRock’s inaugural tokenized fund, provides stable U.S. dollar yields to its holders. With a stable value of $1 per token, it delivers daily dividends, which are distributed monthly.
The fund’s assets include U.S. treasury bills, cash, and repurchase agreements, and it has amassed over $500 million in assets under management, making it the largest tokenized fund to date.
Innovative Perpetual Market Mechanics
The BUIDL Index operates on a perpetual market model, allowing users to take long or short positions based on their expectations of supply changes. If the supply of $BUIDL tokens increases, the index price rises, and if it decreases, the index price falls.
Traders can take advantage of this mechanism to speculate on supply fluctuations, thus offering new opportunities for investment and risk management.
The market is governed by the fund’s mark price, which adjusts intraday based on supply changes. To ensure stability and mitigate short-term volatility, Injective employed a 1-hour Time-Weighted Average Price (TWAP).
Technical Advancements and Strategic Partnerships
Injective's BUIDL Index was developed in collaboration with Stork, a decentralized price feed service that delivers high-speed data for both on- and off-chain applications.
The launch of the BUIDL Index follows Injective’s broader Altaris Mainnet upgrade, which included the introduction of a Real-World Asset (RWA) oracle. Through this oracle network, Injective reportedly can offer new tokenized asset offerings, ensuring accurate and secure data feeds.
Previously, the BUIDL Fund was exclusive to institutional investors with a minimum investment of $5 million. However, the new BUIDL Index democratizes access to this asset class, enabling individuals to trade with as little as $1.
Injective's ongoing efforts were supported by a $150 million ecosystem venture fund in January 2023 backed by Pantera Capital, Jump Crypto, and KuCoin Ventures.
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