BlackRock’s BlackRock USD Institutional Digital Liquidity Fund (BUIDL) is expanding from Ethereum to five new blockchain networks: Aptos, Arbitrum, Avalanche, Optimism, and Polygon.
BlackRock recently reported that this strategic move seeks to expand access to BUIDL, while also redefining the landscape of asset tokenization in the financial sector.
With this expansion to several of the most important blockchains in the digital ecosystem, BlackRock wants to create new avenues that allow both the application ecosystem and users to interact natively with BUIDL, considered one of the most important tokenized funds in the world.
BUIDL was launched in March of this year on the Ethereum network, making it the first tokenized fund to be deployed on a public and open blockchain. Since its launch, BUIDL has quickly positioned itself as the largest tokenized fund globally, reaching an asset under management (AUM) value of over $500 million. According to BlackRock, this milestone was achieved in less than 40 days.
Aptos, Arbitrum, Avalanche, Optimism and Polygon: Keys to BUIDL's expansion
The integration of BlackRock’s tokenized fund with new blockchain networks will allow users to interact natively with it, unlocking a range of advanced functionalities ranging from on-chain returns, flexible custody and real-time peer-to-peer transfers.
Carlos Domingo, CEO and co-founder of Securitize, a firm focused on the tokenization of real-world assets and one of BlackRock’s partners in bringing the world to the blockchain through tokenized funds, highlighted that BUIDL’s expansion to new blockchains is a testament to the continued growth of tokenization.
Domingo said that “real-world asset tokenization is scaling” and that these new integrations will allow more investors to leverage the underlying technology to improve areas that have been difficult until now. With these statements, Domingo referred to the need to optimize efficiency in the management and administration of funds.
Unlocking new types of participation in the financial market
Each of the new blockchains that BlackRock’s tokenized fund is expanding into offers unique features that may appeal to different types of investors.
In his recent releaseBlackRock emphasized the potential of each of these networks, highlighting that Aptos, with its Move technology, can improve performance and safety; Arbitum, one of Ethereum's major Layer 2s, offers fast and cheap transactions by using Optimistic Rollup; Avalanche, a decentralized and open-source blockchain, stands out for its high scalability and transaction finality; Optimism, also an L2 of Ethereum, offers a high level of scalability and interoperability in the blockchain ecosystem and; lastly, Polygon PoS, which maintains a developer- and user-friendly approach, combining the security of the Ethereum infrastructure with the scalability of the Proof of Stake protocol to provide a high-performance, low-cost decentralized application development environment.
According to BlackRock, this diversity not only provides choice for investors, but also fosters a more robust ecosystem where decentralized autonomous organizations (DAOs) and other digitally native companies can build on top of the fund on their preferred platforms.
BUIDL's impact on the tokenization market
The expansion of BUIDL has profound implications for the tokenization market. First, by allowing BUIDL to be used across multiple blockchain ecosystems, BlackRock is laying the groundwork for greater adoption of tokenized assets. This may mean that traditional financial products will become more accessible and efficient when integrated with blockchain technology.
Furthermore, the ability to make fast and secure transfers across multiple networks can transform the way digital assets are managed. Furthermore, by facilitating on-chain dividend distribution and real-time returns, the investor experience is improved and transaction transparency is increased.
Opening BUIDL to new blockchain networks is therefore not only a benefit for institutional investors, but also offers significant opportunities for individual investors and startups. By unlocking access to these emerging platforms, developers can innovate and build financial applications that leverage the unique advantages of each network, leading to an increase in the creation of decentralized financial (DeFi) products that are more efficient and accessible.
That said, the expansion of this fund into new blockchains also reinforces BlackRock’s position as a leader in asset tokenization and fosters an ecosystem where traditional and digital finance can clearly converge.
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