Blackrock has announced a significant expansion of its Blackrock USD Institutional Digital Liquidity Fund (BUIDL), initially launched on the Ethereum network in March 2024.
The fund primarily invests in short-term US Treasury bills and other low-risk securities. It will introduce new share classes on several additional blockchains, including Aptos, Arbitrum, Avalanche, Optimism, and Polygon. This expansion allows BUIDL to integrate into the financial products and infrastructure of various top blockchain ecosystems, heralding a new phase in the evolution of the tokenization market.
The move enables easier access for users and the ecosystem of applications to interact with BUIDL natively, enhancing its utility across diverse digital environments. In less than 40 days from its inception, BUIDL became the world's largest tokenized fund regarding assets under management, highlighting its rapid acceptance and potential within the digital asset space.
Tokenization of real-world assets is a growing trend at the crypto-traditional finance intersection, with global financial giants and digital asset firms racing to tokenize assets like government bonds and private credit. Blackrock's expansion of BUIDL across multiple blockchains aims to tap into this trend, offering faster settlements and increased operational efficiencies.
Carlos Domingo, CEO and co-founder of Securitize, emphasizes the strategic move to enhance the digital ecosystem and leverage the advantages of tokenization to streamline previously complex processes.
BUIDL's presence on additional blockchains is expected to attract more investors, decentralized autonomous organizations (DAOs), and digital asset-native businesses seeking diverse investment opportunities and access. This broadened access is set to transform how investors engage with traditional financial instruments, bringing liquidity and flexibility to their blockchain-based transactions.
The management fee structure for BUIDL varies across blockchains, encouraging adoption by offering lower fees on newer platforms such as Aptos, Avalanche, and Polygon. This pricing strategy makes the fund more attractive in terms of cost-efficiency and supports the growth of these blockchain ecosystems through strategic partnerships and investments.
Ecosystem development organizations like Aptos Foundation, Avalanche (BVI), Inc., and Polygon Labs BD Investments (Cayman) Ltd. have agreed to support this initiative by paying Blackrock a quarterly fee, which underscores the collaborative effort to foster innovation and expansion in the tokenized fund market.