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The BlackRock USD Institutional Digital Liquidity Fund (BUIDL) has become the largest treasury fund tokenized on a blockchain, surpassing the similar product of Franklin Templeton’s this week.
The product has been ticked off as BUIDL topped all the similar products just six weeks after the launch. It has gained a market cap of $375 Million, exceeding the market cap of a year old Franklin OnChain U.S. Government Money Fund (BENJI), which had a market cap of $368 Million, as per the data reported by the Dune Analytics dashboard.
The Surprise Spike On BUIDL Chart Explained
The transfer of $50 Million from Ondo Finance, OUSG, real-world asset tokenization primarily made BUIDL the largest Treasury fund. Moreover, the product represents a significant leap forward in the financial industry’s development of digital assets.
.@BlackRock's first natively onchain fund, BUIDL, has crossed the $350M AUM mark!
— Ondo Finance (@OndoFinance) April 29, 2024
Last week saw inflows of $50M into the fund, largely driven by Ondo's $OUSG.
We continue to see strong demand for more capital efficient cash solutions across the board, and we are proud to have…
The above image presents the ten largest tokenized government securities with their AUM, market share and 1D, 1W and 1M change.
Some of the unique characteristics of BUIDL include its innovative approach to investment as it operates on the Ethereum blockchain, which provides secure and transparent platforms. It has a strategic partnership with a prominent leading exchange, Coinbase, which provides infrastructure for the fund.
It has an investment minimum of $5 Million, This high entry limit will only cater to entities or individuals with significant capital who are looking for stable and secure investment opportunities. It emphasizes compliance and security, as well as issuing shares under specific SEC rules to ensure investor protection.
Apart from offering immediate settlement and enhanced liquidity, BUIDL aims to maintain a stable token value and will also distribute tokens as dividends every month.
Comparing Growth Over A Month
The total AUM for tokenized government securities has seen significant growth in last one month of $50 Million to $1.25 Billion. A percentage growth of 4% in a month.
The above image compares the AUM on May 1, 2024, to April 1, 2024.
Looking at the growth of individual components, BUIDL grew by 34%, USTB grew by 11%, TBILL grew by 35%, and RCOIN grew by 2%. The second largest Treasury fund BENJI, grew by just 2%, sacrificing the largest position to the newer product of BlackRock. However, USYC declined by 5%, and MPLCash declined by 58%. And other products, more or less, remain constant.
BlackRock CEO Highlighting The Future
In 2012, Larry Fink, CEO of BlackRock, said, “ETFs are going to be the new engine for fixed income,” and it was not well accepted by industry observers. However, after twelve years, in the modern investment era, he said, “fixed income markets are totally imbued by ETFs.”
By highlighting this farsightedness, he supported the tremendous growth of ETFs of BlackRock, which reached a size of $3.5 Trillion.
Ahead in the future, Larry Fink said, “We believe the next going forward will be the tokenization of financial assets and that means every stock, every bond will have its own QIP.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
