BlackRock has announced a significant expansion of its BlackRock USD Institutional Digital Liquidity Fund (BUIDL), now accessible on five additional blockchain networks: Aptos, Arbitrum, Avalanche, Optimism, and Polygon. This move follows the fund’s successful launch on Ethereum in March 2024, where it quickly became the world’s largest tokenized fund by assets under management, reaching this milestone in under 40 days.

Key Takeaways

• BlackRock’s BUIDL fund is now available on Aptos, Arbitrum, Avalanche, Optimism, and Polygon.
• The fund has amassed over $520 million in assets, dominating the tokenized money market sector.
• BNY Mellon continues to serve as the fund’s administrator and custodian across all platforms.

The expansion of BUIDL allows for native interactions across multiple blockchain ecosystems, enhancing the fund’s accessibility and functionality. Investors can now benefit from on-chain yield, flexible custody options, and near real-time peer-to-peer transfers. This strategic move is aimed at tapping into the growing demand for tokenized real-world assets, which is becoming a hot trend at the intersection of traditional finance and cryptocurrency.

Carlos Domingo, CEO of Securitize, the tokenization partner for BUIDL, emphasized the importance of this expansion, stating, “We wanted to develop an ecosystem that was thoughtfully designed to be digital and take advantage of the advantages of tokenization.” He noted that the integration of these new blockchains opens up pathways for real-world assets to scale and reach a broader audience of digital-native investors.

The Role of BNY Mellon

BNY Mellon plays a crucial role in this expansion, acting as the fund administrator and custodian. This partnership ensures that BUIDL maintains a seamless operational framework across both digital and traditional financial systems. Each blockchain offers unique features that enhance the fund’s appeal:

• Aptos: Known for its advanced security features.
• Arbitrum: Offers low transaction costs and rapid processing times.
• Avalanche: Provides scalability for high transaction volumes.
• Optimism: Focuses on efficient transaction processing.
• Polygon: Boasts a large user base, driving adoption.

Market Impact and Future Prospects

Since its launch, BUIDL has quickly established itself as a leader in the tokenized government securities market, capturing approximately 22% of the market share with $517 million in assets under management. This rapid growth highlights the increasing interest in tokenized financial products, particularly among institutional investors.

The management fees for BUIDL vary across blockchains, with a standard fee of 50 basis points on Ethereum, Arbitrum, and Optimism, while offering a reduced fee of 20 basis points on Aptos, Avalanche, and Polygon. This pricing strategy is designed to attract a wider range of investors, including decentralized finance (DeFi) protocols and institutional treasuries looking for efficient ways to manage their on-chain cash.

Conclusion

BlackRock’s expansion of the BUIDL fund to multiple blockchains marks a significant milestone in the evolution of tokenized financial products. By leveraging the unique capabilities of each blockchain, BlackRock is not only enhancing the accessibility of its fund but also paving the way for a more integrated and efficient digital finance ecosystem. As the demand for tokenized assets continues to grow, BUIDL is well-positioned to lead the charge in this innovative space.