As a seasoned analyst with over two decades of experience in the financial industry, I have witnessed the evolution of finance from analog to digital. The rapid growth and dominance of the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) within the tokenized U.S. Treasury market is nothing short of impressive.
The BlackRock USD Institutional Digital Liquidity Fund (BUIDL), introduced on Ethereum in March 2024, has swiftly taken over as the leading force in the $2.3 billion tokenized U.S. Treasury market. Managing assets worth $520 million, BUIDL claimed the title of largest tokenized fund less than a month after its debut. Out of this total, $192 million is channeled through Ondo Finance, a platform that provides a user-friendly version of the fund for retail investors.
As stated by the company, the expansion encompasses integration with Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon. One key feature of this launch is a tiered fee system: users on Ethereum, Arbitrum, and Optimism will be charged a management fee of 0.5%, while investors on Aptos, Avalanche, and Polygon can expect to pay a lower rate of 0.2%, thanks to grants from blockchain-related foundations.
This fund requires at least $5 million for direct investments from institutional investors. However, retail investors can invest through Ondo Finance’s product with a minimum investment of $5,000. BUIDL mainly invests in U.S. Treasuries and other easily tradable assets, striving to keep its value constant at around $1.
Carlos Domingo, CEO of Securitize and partner with BlackRock, stated that the process of turning real-world assets into digital tokens is growing,” he said. “This growth is aimed at streamlining traditionally complex financial operations using blockchain technology.
It seems that the multi-chain approach is coming at a good moment, as the market for tokenized real-world assets is showing strong growth prospects. Experts at McKinsey predict this sector could be worth $2 trillion by 2030, implying that BUIDL’s current valuation of half a billion dollars reflects an early adoption stance in a budding industry.
This investment fund provides institutional benefits such as earning yields through on-chain transactions, instant peer-to-peer transfers, and the distribution of dividends directly on the blockchain. In October, it partnered with Zero Hash, allowing digital asset companies to purchase BUIDL using USDC stablecoin and keep their investments on the blockchain. Additionally, Circle is prepared to help investors make withdrawals in USDC when needed.
This progression aligns with BlackRock’s wider strategic move towards digital assets, a movement marked by the introduction of their iShares Bitcoin Trust earlier this year.
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2024-11-14 18:16