July 9, 2024 at 11:01 GMTModified date: July 9, 2024 at 11:01 GMT
July 9, 2024 at 11:01 GMT

BlackRock’s BUIDL fund breaks $500M, sets new standard in tokenisation

Launched less than four months ago, BUIDL now holds $502.8 million worth of tokenised Treasurys.

BlackRock’s BUIDL fund breaks $500M, sets new standard in tokenisation

BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has reached a significant milestone, surpassing $500 million in market value, according to data from Dune Analytics.

The accomplishment makes BUIDL the first tokenised fund to hit the $500 million mark. This growth reflects the overall expansion in the market for tokenised US Treasuries, which now stands at $1.8 billion. 

BlackRock’s BUIDL controls 27% of this market, bolstered by protocols like Ondo that use BUIDL to back their yield-bearing products.

Launched less than four months ago, BUIDL now holds $502.8 million worth of tokenised Treasurys, as confirmed by Ethereum block explorer Etherscan.

Key holders in the market 

Ondo’s OUSG is the largest holder of BUIDL, with $173.7 million, followed by Mountain Protocol, which uses BUIDL to back its USDM stablecoin

BUIDL surpassed the Franklin OnChain US Government Money Fund (BENJI) as the world’s largest tokenised treasury fund in late April. This was just six weeks after its launch on 15 March. Since then, BUIDL has managed to maintain its top position.

With its price pegged at 1:1 with the U.S. dollar, BUIDL pays daily accrued dividends directly to investors each month through its partnership with real-world asset tokenisation platform Securitize. 

Franklin Templeton’s Franklin OnChain US Government Money Fund, represented by the BENJI token, has captured around $402 million of deposits. Despite this, BlackRock’s BUIDL remains dominant in the tokenised government securities market.

The success of BUIDL highlights the growing interest and investment in tokenised assets. The tokenised fund market, particularly for US Treasuries, is seeing substantial growth, driven by the perceived stability and low-risk nature of these investments. 

Growth in tokenised assets

The market for tokenised treasury funds now stands at $1.67 billion, with Ethereum leading the space, according to Dune Analytics data

Ethereum holds more than a 75% share of treasury funds, followed by Stellar at 23.9%. 

Much of the RWA market resides on the Ethereum network, reflecting its dominance and reliability in the blockchain space. 

The ability to tokenise various assets on a trusted and widely used platform like Ethereum is a key factor in the market’s growth.

BlackRock CEO, Larry Fink, stated in January that blockchain tokenisation could make capital markets more efficient. Boston Consulting Group estimates this market could reach $16 trillion by 2030. 

Tokenisation of assets offers several advantages, including improved liquidity, lower transaction costs, and increased transparency. These benefits are driving more institutions to explore and adopt tokenised assets.

US Treasurys are only one aspect of this market, as stocks, real estate, and many other assets can be tokenised. 

The number of real-world asset transactions peaked in April 2024 but has since declined, as per Dune Analytics data. This fluctuation indicates a maturing market still in the early stages of widespread adoption.

Major players in the space include WisdomTree, Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm. Each of these firms is contributing to the growth and diversification of the tokenised asset market. 

Despite a recent slowdown, the real-world asset market remains on the rise, with tokens growing almost 28% on average during the second quarter, outperforming other crypto sectors.